Section 23 of The Securities and Exchange Board of India Act, 1992
No suit, prosecution or other legal proceedings shall
lie against the Central Government 1[or Board] or any officer of the Central Government or any member, officer or other employee of the Board for anything which is in good faith done or intended to be done under this Act or the rules or regulations made thereunder.
Summary
- Employees of the Board and the Central Government are protected from lawsuits if they make an honest mistake while doing their jobs under this Act.
- This legal shield only applies if their actions were done, or intended to be done, in good faith.
- No one can launch a prosecution or legal proceeding against the Board itself for actions genuinely intended to follow the law.
Practical examples
FAQ
1. Can I sue a Board officer if they make a mistake that costs me money?
No, as long as the officer was acting in good faith to carry out their duties under the Act, they are protected from lawsuits.
2. What does "good faith" mean here?
It generally means acting honestly and with good intentions based on the information available, rather than acting with malice or corruption.
3. Does this protection cover actions that break the rules on purpose?
No, deliberate misconduct or acts done in bad faith are not protected by this section.
Test yourself
Q1.Under Section 23 of The Securities and Exchange Board of India Act, 1992, what is the core requirement for an officer of the Board to be protected from legal proceedings?
Q2.Under Section 23 of The Securities and Exchange Board of India Act, 1992, which entities and individuals are explicitly granted protection from prosecution?
Q3.Under Section 23 of The Securities and Exchange Board of India Act, 1992, what types of actions against protected parties are barred?
Q4.Under Section 23 of The Securities and Exchange Board of India Act, 1992, does the protection apply to actions taken under the rules and regulations made under the Act, or just the Act itself?