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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 of India had been constituted by a Government of India resolution. A land-purchase contract signed by that body is still pending. After the statutory Board is established, what is the legal position of this contract?

The contract is deemed to have been entered into by the statutory SEBI. The SEBI Act provides that contracts made by or for the existing Board before the establishment date are treated as the new Board's contracts, so they continue without lapse, re-execution or fresh consent.

  1. AIt lapses automatically because the earlier body ceases to exist
  2. BIt is deemed to have been entered into by the statutory BoardCorrect
  3. CIt continues only if the other party gives fresh written consent
  4. DIt must be re-executed in the name of the Central Government

Explanation

Under Section 10(1)(d), all contracts entered into by or for the existing Board immediately before the establishment date are deemed to have been entered into by the statutory Board. They do not lapse, need no fresh consent and do not pass to the Central Government.

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