Section 10 of The Securities and Exchange Board of India Act, 1992
- (1)On and from the date of establishment of the Board,—
- (a)any reference to the existing Securities and Exchange Board in any law other than this Act or in any contract or other instrument shall be deemed as a reference to the Board;
- (b)all properties and assets, movable and immovable, of, or belonging to, the existing Securities and Exchange Board, shall vest in the Board;
- (c)all rights and liabilities of the existing Securities and Exchange Board shall be transferred to, and be the rights and liabilities of, the Board;
- (d)without prejudice to the provisions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all matters and things engaged to be done by, with or for the existing Securities and Exchange Board immediately before that date, for or in connection with the purpose of the said existing Board shall be deemed to have been incurred, entered into or engaged to be done by, with or for, the Board;
- (e)all sums of money due to the existing Securities and Exchange Board immediately before that date shall be deemed to be due to the Board;
- (f)all suits and other legal proceedings instituted or which could have been instituted by or against the existing Securities and Exchange Board immediately before that date may be continued or may be instituted by or against the Board; and
- (g)every employee holding any office under the existing Securities and Exchange Board immediately before that date shall hold his office in the Board by the same tenure and upon the same terms and conditions of service as respects remuneration, leave, provident fund, retirement and other terminal benefits as he would have held such office if the Board had not been established and shall continue to do so as an employee of the Board or until the expiry of the period of six months from that date if such employee opts not to be the employee of the Board within such period.
- (2)Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in any other law for the time being in force, absorption of any employee by the Board in its regular service under this section shall not entitle such employee to any compensation under that Act or other law and no such claim shall be entertained by any court, tribunal or other authority.
Summary
- When the new Board is established, all properties, assets, debts, and liabilities of the existing Securities and Exchange Board automatically transfer to it.
- Any legal lawsuits or contracts involving the old board continue with the new Board.
- Employees of the old board keep their jobs with the new Board under the exact same pay, leave, and retirement benefits.
- Employees have a window of six months from the establishment date to opt out of becoming an employee of the new Board.
- Employees absorbed into the new Board cannot claim compensation for the transfer under the Industrial Disputes Act, 1947, or any other law.
Practical examples
FAQ
1. What happens to the money owed to the old board?
All sums of money due to the existing board are deemed to be due to the new Board.
2. Do employees of the old board lose their jobs?
No, they hold their office in the new Board with the same terms and conditions, unless they opt out within six months.
3. Can a transferred employee demand a payout for being moved to a new corporate body?
No, absorption into the new Board does not entitle the employee to any compensation under the Industrial Disputes Act, 1947, or any other law.
Test yourself
Q1.Under Section 10 of The Securities and Exchange Board of India Act, 1992, how much time does an employee of the existing board have to opt out of becoming an employee of the new Board?
Q2.Under Section 10 of The Securities and Exchange Board of India Act, 1992, if an employee is absorbed into the new Board, can they claim compensation under the Industrial Disputes Act, 1947?
Q3.Under Section 10 of The Securities and Exchange Board of India Act, 1992, what happens to lawsuits that were instituted by the existing Securities and Exchange Board before the new Board was established?
Q4.Under Section 10 of The Securities and Exchange Board of India Act, 1992, what happens to the retirement benefits of an employee transferring from the existing board to the new Board?