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CS Professional · Drafting, Pleadings and Appearances · Adjudications and Appeals under SEBI Laws

Vardhan Securities Ltd faces proceedings related to the holding and transfer of securities under the Depositories Act, 1996. It contends that only the Depositories Act can apply to the matter. What is the correct position under that Act's savings provision?

The Depositories Act, 1996 operates in addition to, and not in derogation of, other laws in force relating to the holding and transfer of securities. So the company cannot claim that only the Depositories Act governs the matter.

  1. AThe Depositories Act overrides all other laws on holding and transfer of securities
  2. BThe Depositories Act applies in addition to, and not in derogation of, any other law in force relating to holding and transfer of securitiesCorrect
  3. COther laws apply only if the depository consents
  4. DThe Depositories Act applies only to securities held in physical form

Explanation

Section 28 of the Depositories Act states that its provisions are in addition to, and not in derogation of, any other law for the time being in force relating to the holding and transfer of securities. Hence the exclusive-application argument fails. The overriding option contradicts this wording.

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