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CS Executive · Capital Market and Securities Laws · Secondary Market in India

An exchange official, acting under the exchange's bye-laws, orders inspection of a broker's records. The broker alleges the official was careless and files a prosecution. Which feature of Section 29 of the SCRA, 1956 is most relevant to whether the official is protected?

The key requirement is that the act was done, or intended to be done, in good faith in pursuance of the Act or its rules or bye-laws. Section 29 does not require prior SEBI approval, membership of the governing body, or any profit to the exchange.

  1. AThe act must have been done in good faith or intended to be done in good faith in pursuance of the Act, rules or bye-lawsCorrect
  2. BThe act must have been approved by SEBI in writing beforehand
  3. CThe official must be a member of the governing body, not a servant
  4. DThe act must have resulted in a profit to the exchange

Explanation

Section 29 turns on good faith and on the act being done or intended to be done in pursuance of the Act or its rules or bye-laws. It covers servants and office bearers too, so the third option is wrong. No prior SEBI approval or profit condition appears in the text.

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