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    Question

    If any loss is caused to the beneficial owner due to

    the negligence of the depository or the participant.Ā 
    A the Board shall indemnify such beneficial owner Correct Answer Incorrect Answer
    B the participant shall indemnify such beneficial owner Correct Answer Incorrect Answer
    C the depository shall indemnify such beneficial owner Correct Answer Incorrect Answer
    D the Government shall indemnify such beneficial owner Correct Answer Incorrect Answer
    E Both the depository and the participant shall indemnify the beneficial owner Correct Answer Incorrect Answer

    Solution

    Section 16 of Depository Act - Depositories to indemnify loss in certain cases. Without prejudice to the provisions of any other law for the time being in force, any lossĀ  causedĀ  toĀ  theĀ  beneficialĀ  ownerĀ  dueĀ  toĀ  theĀ  negligenceĀ  ofĀ  theĀ  depositoryĀ  orĀ  the participant, the depository shall indemnify such beneficial owner. (2)Ā  WhereĀ  theĀ  lossĀ  dueĀ  toĀ  theĀ  negligenceĀ  ofĀ  theĀ  participantĀ  underĀ  sub-sectionĀ  (1)Ā  is indemnified by the depository, the depository shall have the right to recover the same from such participant.

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