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

Before the SEBI Act, 1992 came into force, an administrative body called the 'existing Securities and Exchange Board' operated under a Government of India Resolution dated 12 April 1988. A commercial contract signed by that body refers to it by its old name. What is the effect of the Act on this reference from the date the statutory Board is established?

The reference to the existing Securities and Exchange Board in the contract is deemed to be a reference to the statutory SEBI from the date of its establishment. The contract stays valid and needs no re-execution, because the Act itself substitutes the new Board for the old body.

  1. AThe reference is deemed to be a reference to the statutory BoardCorrect
  2. BThe contract becomes void because the named party has ceased to exist
  3. CThe contract must be re-executed with the statutory Board within six months
  4. DThe reference continues to mean the old body, which is wound up separately

Explanation

Section 10(1)(a) provides that from the date of establishment of the Board, any reference to the existing Board in any law (other than this Act) or in any contract or other instrument is deemed to be a reference to the Board. The contract therefore continues without re-execution. Voidness or a six-month re-execution is not provided.

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