Rules, made in any law, are actually ‘delegated Legislation’. It means the power to make changes or to give effect to the Law are delegated by the Legislature to the Executive.
Usually, this delegation is done by using the words ‘ as prescribed’ or ‘ as notified’ .
Example: The earlier definition of private limited Company had minimum capital of Rs. 1 Lakhs prescribed in the Act itself, Now it mentions ‘ as prescribed’,
It means earlier legislature i.e. parliament had itself given the minimum capital . But now it has delegated to the Executive i.e. Ministry. The Ministry can decide the minimum capital by framing Rules.
Now, question is why delegation is required at all? Means Why are Rules required at all? Why can’t the Act itself contain everything?
Answer is that any amendment to the Act has to happen in Parliament session. Its true that Ordinances can be passed between sessions but Ordinances are not supposed to be passed for routine amendments but nor necessary ones. So for each small amendment, its not feasible or possible to go to Parliament each time to amend the Act.
Hence Executive i.e. the Ministry can frame/amend the Rules anytime it requires. Its easier and much more convenient. Please note , all Rules framed between two sessions do have to be laid before Parliament for approval but still its a lot more convenient since all Rules can be placed in one go.
I hope this clarifies.
—— Corporate Compliance Team
Entrecap Business Services
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