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

Mr. Kapoor, a whole-time member appointed under Section 4(1)(d), wishes to leave before his prescribed term ends. Separately, the Central Government wishes to remove him early. Under Section 5(2), which statement is correct?

Both sides may end the term early. The Central Government must give at least three months' written notice or pay three months' salary and allowances instead, while the member must give the Central Government at least three months' written notice before relinquishing office.

  1. ANeither side may end the term early before it expires
  2. BOnly the Central Government may end the term early, with immediate effect
  3. CEither may end it early, the Central Government by at least three months' written notice or three months' salary and allowances in lieu, and the member by at least three months' written noticeCorrect
  4. DEither may end it early, each by giving one month's notice

Explanation

Section 5(2) lets the Central Government terminate a Chairman or clause (d) member before expiry by three months' written notice or three months' salary and allowances in lieu. The member may relinquish office by giving the Central Government at least three months' written notice. The one-month option misstates the period.

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