Skip to content

CS Executive · Capital Market and Securities Laws · Securities and Exchange Board of India

A supplier had filed a recovery suit against the existing Securities and Exchange Board, and it was pending when the statutory Board was established. Another supplier had not yet sued but could have sued the existing Board for a pre-establishment liability. Which view is correct under the SEBI Act, 1992?

The pending suit continues against the Board, and the second supplier may also sue the Board. The Act covers proceedings already instituted and those that could have been instituted against the existing Board, so both are maintainable against the statutory Board.

  1. ANeither suit can proceed because the existing Board has ceased to exist
  2. BThe pending suit continues against the Board, and the other supplier may institute a suit against the BoardCorrect
  3. CThe pending suit continues, but no new suit can be instituted for earlier liabilities
  4. DBoth suits must be filed afresh against the Central Government

Explanation

Section 10(1)(f) says suits and legal proceedings instituted, or which could have been instituted, by or against the existing Board immediately before that date may be continued or instituted by or against the Board. The option barring new suits ignores the words 'could have been instituted'.

Did you get it right without looking?

One question tells you little. A timed set on Securities and Exchange Board of India shows your real accuracy, how long you take and where you lose marks.

Practise Securities and Exchange Board of IndiaFree diagnostic mock

More Securities and Exchange Board of India questions