The name of the program to be run, which the calling program provides to the EXEC function, must be an unambiguous file specification (no wildcard characters) and must include an explicit .COM or .EXE extension. If the path and disk drive are not supplied in the program name, MS-DOS uses the current directory and default disk drive. (The sequential search for .COM, .EXE, and .BAT files in all the locations listed in the PATH variable is not a function of EXEC, but rather of the internal logic of COMMAND.COM.)
You cannot EXEC a batch file directly; instead, you must EXEC a copy of COMMAND.COM and pass the name of the batch file in the command tail, along with the /C switch.