SEBI was established as India’s principal capital markets regulator with the aim to pro tect the interest of investors in securities and promote the development and regulation of the securities market in India. SEBI is empowered to regulate the securities market in India by the SEBI Act 1992, the SCRA and the Depositories Act 1996. SEBI’s powers to regulate the securities market are wide and include delegated legislative, administrative, and adjudicatory powers to enforce SEBI’s regulations. SEBI exercises its delegated legislative power by inter alia framing regulations and appropriately amending them to keep up with the dynamic nature of the securities’ market. SEBI has issued a number of regulations on various areas of security regulation which form the backbone of the framework governing the securities market in India. Section 11 of the SEBI Act lays down the functions of SEBI and expressly states that it ”shall be the duty of the Board to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit”. Fur ther, Section 30 of the SEBI Act empowers SEBI to make regulations consistent with the Act. Significantly, while framing these regulations, SEBI consults its advisory committees consisting of domain experts, including market experts, leading market players, legal experts, technol ogy experts, retired Judges of this Court or the High Courts, academicians, representatives of industry associations and investor associations. During the consultative process, SEBI also in vites and duly considers comments from the public on their proposed regulations. SEBI follows similar consultative processes while reviewing and amending its regulations.
(Extracted, with edits and revision, from the judgement in Vishal Tiwari v. Union Of India, [2024] 1 S.C.R. 171)
What is meant by SCRA in the above passage.
Show Hint
- Securities Contracts (Regulation) Act
- Securities and Corporate (Registration) Act
- Securities Compliance (Regulation) Act
- SEBI and Companies (Regulation) Act
The Correct Option is A
Solution and Explanation
The question asks for the full form of the acronym SCRA as mentioned in the provided passage about SEBI.
Step 2: Detailed Explanation
The passage states that "SEBI is empowered to regulate the securities market in India by the SEBI Act 1992, the SCRA and the Depositories Act 1996." This indicates that SCRA is a key piece of legislation governing the Indian securities market, alongside the SEBI Act. The acronym SCRA stands for the Securities Contracts (Regulation) Act, 1956. This act was enacted to prevent undesirable transactions in securities and to regulate the business of dealing in them.
Step 3: Final Answer
Based on the explanation, the correct full form of SCRA is the Securities Contracts (Regulation) Act. Therefore, option (A) is the correct answer.
Which of the following is not a committee setup by SEBI?
Show Hint
- Technical Advisory Committee
- Competition Advisory committee
- Intermediary Advisory Committee
- Market Data Advisory Committee
The Correct Option is B
Solution and Explanation
The question asks to identify which of the given committees is not established by the Securities and Exchange Board of India (SEBI).
Step 2: Detailed Explanation
The passage mentions that SEBI consults with its advisory committees. To answer this question, one needs to know about the committees constituted by SEBI. SEBI has several advisory committees to assist it in its functions. These include:
- The Technical Advisory Committee.
- The Intermediary Advisory Committee.
- The Market Data Advisory Committee (MDAC).
The Competition Advisory Committee, however, is typically associated with the Competition Commission of India (CCI), which is the principal body for enforcing competition law in the country, not SEBI. SEBI's mandate is to regulate the securities market.
Step 3: Final Answer
Since the Technical, Intermediary, and Market Data Advisory Committees are all set up by SEBI, the Competition Advisory committee is the one that is not. Thus, option (B) is the correct answer.
Which among the following is not a function of SEBI?
Show Hint
- regulating substantial acquisition of shares and take over of companies
- prohibiting and regulating self-regulatory organisations
- prohibiting insider trading in securities
- promoting investors' education and training of intermediaries of securities markets.
The Correct Option is B
Solution and Explanation
The question asks to identify which of the listed activities is not a function of SEBI.
Step 2: Detailed Explanation
Let's analyze the functions of SEBI based on the SEBI Act, 1992 and the provided passage. The primary functions of SEBI are to protect investors' interests and to promote and regulate the securities market.
- (A) Regulating substantial acquisition of shares and takeovers is a key function of SEBI, governed by the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations.
- (C) Prohibiting insider trading is a critical protective function of SEBI to ensure a fair market.
- (D) Promoting investors' education and training of intermediaries is a developmental function of SEBI.
- (B) The function related to self-regulatory organisations (SROs) is to promote and regulate them, not to prohibit them. The aim is to encourage self-regulation within the industry under SEBI's oversight. Prohibiting SROs would be counterproductive to this goal.
Step 3: Final Answer
The statement "prohibiting and regulating self-regulatory organisations" is incorrect because SEBI's role is to promote and regulate them. Therefore, this is not a function of SEBI. Option (B) is the correct answer.
The process by which an organisation thinks about and evolves its relationships with stakeholders for the common good, and demonstrates its commitment in this regard by adoption of appropriate business processes and strategies is called?
Show Hint
- Annual general meeting
- Corporate social responsibility
- Issuing Shelf prospectus
- Incorporation of a company
The Correct Option is B
Solution and Explanation
The question provides a definition and asks for the corresponding business concept. The definition describes a process where a company considers its impact on stakeholders and the common good and integrates this into its strategies.
Step 2: Detailed Explanation
Let's evaluate the options:
- (A) An Annual General Meeting (AGM) is a formal meeting of shareholders of a company. It is a specific event, not the overall process described.
- (B) Corporate Social Responsibility (CSR) is a business model where companies make a concerted effort to operate in ways that enhance society and the environment. This aligns perfectly with the definition of evolving relationships with stakeholders for the common good.
- (C) Issuing a Shelf Prospectus is a legal process for a company to make multiple public offerings of securities under a single registration statement. It is a financing activity.
- (D) Incorporation of a company is the legal process of forming a corporate entity. It is the beginning of a company's life, not the ongoing process described.
Step 3: Final Answer
The definition given in the question is the standard definition of Corporate Social Responsibility (CSR). Therefore, option (B) is the correct answer.
In which of the following cases did the court struck down the attempt of the government to nationalise banks and pay minimal compensation to the shareholders?
Show Hint
- Shri Sunil Siddharthbhai Etc v. Union of India
- R.C. Cooper v. Union of India
- United Bank Of India v. SatyawatiTondon \ & Ors
- Punjab National Bank v. Union of India
The Correct Option is B
Solution and Explanation
The question asks to identify the landmark Supreme Court case that invalidated the government's nationalization of banks on the grounds of inadequate compensation.
Step 2: Detailed Explanation
The case in question is the famous Rustom Cavasjee Cooper v. Union of India (1970), also known as the Bank Nationalisation Case. In this case, the Supreme Court of India struck down the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969. The court ruled that the Act violated the constitutional guarantee of compensation under Article 31(2) because the compensation provided was not just or fair. The petitioner, R.C. Cooper, was a shareholder in one of the nationalized banks and successfully challenged the legislation. This judgment was a significant moment in Indian constitutional law regarding the right to property and the scope of the government's power of acquisition.
Step 3: Final Answer
The correct case is R.C. Cooper v. Union of India. Therefore, option (B) is the correct answer.
Top Questions on Constitutional Laws
- “The law is well settled that a constitutional court can award monetary compen sation against the State and its officials for its failure to safeguard fundamental rights of citizens but there is no system or method to measure the damages caused in such situations. Quite often the courts have a difficult task in determining dam ages in various fact situations. The yardsticks normally adopted for determining the compensation payable in private tort claims are not as such applicable when a constitutional court determines the compensation in cases where there is a viola tion of fundamental rights guaranteed to its citizens.
... In D.K. Basu v. State of W.B. [(1997) SCC 1 416], a Constitution Bench of this Court held that there is no straitjacket formula for computation of damages and we find that there is no uniformity or yardstick followed in awarding damages for violation of fundamental rights. In Rudul Sah case [Rudul Sah v. State of Bihar, (1983) 4 SCC 141] this Court used the terminology ’palliative’ for measuring the damages and the formula of ’adhoc’ was applied. In Sebastian Hongray case [Se bastian M. Hongray v. Union of India, (1984) 3 SCC 82] the expression used by this Court for determining the monetary compensation was ’exemplary’ costs and the formula adopted was ’punitive’. In Bhim Singh case [Bhim Singh v. State of J & K, (1985) 4 SCC 677], the expression used by the Court was ’compensation’ and the method adopted was ’tortious formula’. In D.K. Basu v. State of W.B. [(1997) SCC 1 416] the expression used by this Court for determining the compensation was ’monetary compensation’. The formula adopted was ’cost to cost’ method. Courts have not, therefore, adopted a uniform criterion since no statutory formula has been laid down.”
tracted from: Municipal Corporation of Delhi, Delhi v Uphaar Tragedy Victims Association (2011) 14 SCC 481- CLAT PG - 2026
- Legal Studies
- Constitutional Laws
“The power to pardon is a part of the constitutional scheme, and we have no doubt, in our mind, that it should be so treated also in the Indian Republic. It has been reposed by the people through the Constitution in the Head of the State, and enjoys high status. It is a constitutional responsibility of great significance, to be exercised when occasion arises in accordance with the discretion contemplated by the context. It is not denied, and indeed it has been repeatedly affirmed in the course of argument by learned counsels appearing for the Petitioner that the power to pardon rests on the advice tendered by the Executive to the President, who subject to the provisions of Article 74(1) of the Constitution, must act in accordance with such advice......”
We are of the view that it is open to the President in the exercise of the power vested in him by Article 72 of the Constitution to scrutinise the evidence on the record of the criminal case and come to a different conclusion from that recorded by the court in regard to the guilt of, and sentence imposed on the accused. In doing so, the President does not amend or modify or supersede the judicial record. The judicial record remains intact, and undisturbed. The President acts in a wholly different plane from that in which the Court acted. He acts under a constitutional power, the nature of which is entirely different from the judicial power and cannot be regarded as an extension of it. This is so, notwithstanding that the practical effect of the Presidential act is to remove the stigma of guilt from the accused or to remit the sentence imposed on him.
It is apparent that the power under Article 72 entitles the President to examine the record of evidence of the criminal case and to determine for himself whether the case is one deserving the grant of the relief falling within that power. We are of opinion that the President is entitled to go into the merits of the case notwithstanding that it has been judicially concluded by the consideration given to it by this Court. In Kehar Singh v. Union of India, 1989 SC, this court stated that the same obviously means that the affected party need not be given the reasons. The question whether reasons can or cannot be disclosed to the Court when the same is challenged was not the subject-matter of consideration. In any event, the absence of any obligation to convey the reasons does not mean that there should not be legitimate or relevant reasons for passing the order.
Extract from the judgment of Shatrughan Chauhan v. Union of India 2014 (3) SCC 1- CLAT PG - 2026
- Legal Studies
- Constitutional Laws
To recall, the petitioners while challenging the 1951 and 1965 amendments to the AMU Act in Azeez Basha argued that the amendments were violative of the right to administration guaran teed by Article 30(1). The Union of India responded to the argument with the submission that the Muslim minority cannot claim the right to administration since it did not ’establish’ the institution. Opposing this argument, the petitioners in Azeez Basha, submitted that Article 30(1) guarantees the ’right to administer’ an educational institution to minorities even if it was not established by them, if by ”some process, it had been administering the same before the Constitution came into force.” The argument of the petitioners was rejected. This Court held that the words ”establish” and ”administer” must be read conjunctively, that is, the guarantee of the right to administration is contingent on the establishment of the institution by religious or linguistic minorities...
The issue before this Bench is the indicia for an educational institution to be a minority educa tional institution. Should it be proved that the institution was established by the minority, or it was administered by the minority, or both? The petitioners and the respondents agree that the words ’establish’ and ’administer’ must be read conjunctively. They argue that administration is a sequitur to establishment. However, they disagree on the test to be applied to identify a minority education institution. The petitioners argue that the only indicia for a minority ed ucational institution is that it must be established by a minority, while the respondents argue that the dual test of establishment and administration must be satisfied.
(Extracted with edits and revisions from Aligarh Muslim University v. Naresh Agarwal & Ors, 2024 SC 8)- CLAT PG - 2026
- Legal Studies
- Constitutional Laws
- If the State Waqf Board composition requires non-Muslim members exceeding the limit set by the Amendment, can it be challenged under Articles 25, 26, and 14?
- CLAT PG - 2026
- Legal Studies
- Constitutional Laws
- Which Article permits reasonable restrictions for decency/obscenity?
- CLAT PG - 2026
- Legal Studies
- Constitutional Laws
Questions Asked in CLAT PG exam
The document presents a critique of the United Nations (UN) organization, arguing that it has failed to carry out its charter-mandated tasks, specifically to ”maintain international peace and security” and ”to achieve international cooperation” in solving global problems. The author notes growing public frustration with catastrophic humanitarian situations and the failure of peace-keeping operations, leading to widespread scepticism about the possibility of ”revitalization”.
UN Reform Approaches
Discussions on UN reform are divided into two main categories: the conservative approach and the radical approach.
1. Conservative Approach:
The conservative view considers the existing Charter ”practically untouchable” and believes in improving ”collective security” as defined in Chapter VII. Key positions include:
- US Position: Prioritizes its own interests, supports better management and the creation of an Inspector General, favours enlarging the Security Council (to include Germany and Japan, mainly for financing peace-keeping), and associates the UN with regional organizations like NATO for peace enforcement. The US remains reluctant to allow full application of Chapter VII and views collective security restrictively.
- Secretary-General’s Position (Boutros Ghali): Advocated for the full implementation of ’collective security’ as envisaged in 1945, including the use of the Military Staff Committee (Article 47) and the conclusion of special agreements (Article 43) for providing armed forces. He also proposed ’peace enforcement units’ under the command of the Secretary-General and wider use of ’preventive diplomacy’. The report candidly recognized the Security Council’s incapacity to deal with threats from a major power.
2. Radical Approach:
The radical approach criticizes the principles of the present system and proposes an overhaul. It reflects increasing doubts about the value of the Charter’s collective security system, especially in intra-State conflicts. Radical proposals include:
- Establishing an Economic Security Council.
- Modifying the Charter with less reluctance.
- Reforming the IMF and World Bank.
- Developing a new global security system .
- The creation of a consultative parliamentary assembly at the world level.
Future Outlook:
The author asserts that no major or minor reform has any chance of being implemented now, primarily because the Charter’s amendment procedures (requiring a two-thirds majority including all five permanent Security Council members) preclude agreement. However, he concludes that the continuing deterioration of the global situation, driven by economic integration, rising inequality, and intra-State conflicts, will inevitably lead the political establishment to define a new global institutional structure. This future debate will become highly political.
- CLAT PG - 2026
- International Law
“Section 55 of the Indian Contract Act says that when a party to a contract promises to do a certain thing within a specified time but fails to do so, the contract or so much of it as has not been performed, becomes voidable at the option of the promisee if the intention of the parties was, that time should be of the essence of the contract. If time is not the essence of the contract, the contract does not become voidable by the failure to do such thing on or before the specified time but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. Further, if in case of a contract voidable on account of the promisor’s failure to perform his promise within the time agreed and the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of such acceptance he gives notice to the promisor of his intention to do so.
Sections 73 and 74 deal with consequences of breach of contract. Heading of Sec tion 73 is compensation for loss or damage caused by breach of contract. When a contract is broken, the party who suffers by such breach is entitled to receive from the party who has broken the contract compensation for any loss or damage caused to him thereby which naturally arose in the usual course of things from such breach or which the parties knew when they made the contract to be likely to result from the breach of it. On the other hand, Section 74 deals with compen sation for breach of contract where penalty is stipulated for. When a contract is broken, if a sum is mentioned in the contract as the amount to be paid in case of such breach or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled whether or not actually damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or the penalty stipulated for.”
tracted from: Consolidated Construction Consortium Limited v Software Technol ogy Parks of India 2025 INSC 574- CLAT PG - 2026
- Contract Law
“Law treats all contracts with equal respect and unless a contract is proved to suffer from any of the vitiating factors, the terms and conditions have to be enforced regardless of the relative strengths and weakness of the parties.
Section 28 of the Contract Act does not bar exclusive jurisdiction clauses. What has been barred is the absolute restriction of any party from approaching a legal forum. The right to legal adjudication cannot be taken away from any party through contract but can be relegated to a set of Courts for the ease of the parties. In the present dispute, the clause does not take away the right of the employee to pursue a legal claim but only restricts the employee to pursue those claims before the courts in Mumbai alone.
... the Court must already have jurisdiction to entertain such a legal claim. This limb pertains to the fact that a contract cannot confer jurisdiction on a court that did not have such a jurisdiction in the first place.”
Extracted from: Rakesh Kumar Verma v HDFC Bank Ltd 2025 INSC 473- CLAT PG - 2026
- Contract Law
- It is well recognized that actionable negligence in context of medical profession involves three constituents (i) duty to exercise due care; (ii) breach of duty and (iii) consequential damage. However, a simple lack of care, an error of judgment or an accident is not sufficient proof of negligence on part of the medical professional so long as the doctor follows the acceptable practice of the medical profession in discharge of his duties. He cannot be held liable for negligence merely because a better alternative treatment or course of treatment was available or that more skilled doctors were there who could have administered better treatment.
A medical professional may be held liable for negligence only when he is not pos sessed with the requisite qualification or skill or when he fails to exercise reasonable skill which he possesses in giving the treatment. None of the above two essential conditions for establishing negligence stand satisfied in the case at hand as no ev idence was brought on record to prove that Dr. Neeraj Sud had not exercised due diligence, care or skill which he possessed in operating the patient and giving treatment to him. When reasonable care, expected of the medical professional, is extended or rendered to the patient unless contrary is proved, it would not be a case for actionable negligence.
tracted with edits and revisions from Neeraj Sud v Jaswinder Singh 2024 INSC 825- CLAT PG - 2026
- Law of Torts
Today, in the year 2025, we have been experiencing the drastic consequences of large scale destruction of environment on human lives in the capital city of our country and in many other cities. At least for a span of two months every year, the residents of Delhi suffocate due to air pollution. The AQI level is either dangerous or very dangerous. They suffer in their health. The other leading cities are not far behind. The air and water pollution in the cities is ever increasing. Therefore, coming out with measures such as the 2021 Official Memorandum is violative of fundamental rights of all persons guaranteed under Article 21 to live in a pollution free environment. It also infringes the right to health guaranteed under Article 21 of the Constitution.
The 2021 OM talks about the concept of development. Can there be development at the cost of environment? Conservation of environment and its improvement is an essential part of the concept of development. Therefore, going out of the way by issuing such OMs to protect those who have caused harm to the environment has to be deprecated by the Courts which are under a constitutional and statutory mandate to uphold the fundamental right under Article 21 and to protect the environment. In fact, the Courts should comedown heavily on such attempts. As stated earlier, the 2021 OM deals with project proponents who were fully aware of the EIA notification and who have taken conscious risk to flout the EIA notification and go ahead with the construction/continuation/expansion of projects. They have shown scant respect to the law and their duty to protect the environment. Apart from violation of Article 21, such action is completely arbitrary which is violative article 14 of the Constitution of India, besides being violative of the 1986 Act and the EIA notification.
(Extracted with edits from Vanashakti v. Union of India, 2025 INSC 718)- CLAT PG - 2026
- Environmental Law