Rules, Regulations, and the Tail of the Act

Section 22: laying, and the modification power

Every notification under section 8(2)(b), that is the notification specifying the level of public sector officers within the Commission's inquiry jurisdiction, and every rule and every regulation, shall be laid before each House of Parliament while it is in session, for a total period of thirty days, comprised in one session or in two or more successive sessions; and if, before the expiry of the session immediately following, both Houses agree in making any modification or agree that it should not be made, it shall have effect only in the modified form or be of no effect, without prejudice to the validity of anything previously done under it.

This is the standard "subject to modification" laying formula, and it belongs to Module III. Chapter 870 works legislative control over delegated legislation in general; section 22 is this Act's instance of it, and it is the stronger of the two common forms, because the House may modify and not merely annul.

Note what section 22 does not cover: the annual report under section 14. That is laid under section 14(3) and Parliament has no power to modify it, which is right, because a report is not legislation. Do not confuse the two layings in an answer.

Sections 23 and 24: the transitional sections

Section 23: removal of difficulties. The Central Government may, by order not inconsistent with the Act, remove a difficulty arising in giving effect to it, but no such order after two years from commencement; and every order shall be laid before each House.

The two-year limit is the whole safeguard. A removal of difficulties clause lets the executive alter the working of a statute by order, which is why the courts read it narrowly and why Parliament times it out. This one expired in 2005.

Section 24: the existing Vigilance Commission. With effect from the constitution of the Commission under section 3(1), the Central Vigilance Commission set up by the Resolution of the Government of India in the Ministry of Home Affairs No. 24/7/64-AVD dated 11 February 1964 continues to discharge its functions so far as they are not inconsistent with the Act, and: (a) its actions and decisions are deemed to have been taken by the Commission; (b) its pending proceedings are deemed transferred; (c) its employees become employees of the Commission on the same terms; (d) its assets and liabilities are transferred.

Section 24 is the statute's own acknowledgement of chapter 570. The Commission of 1964 was not abolished and re-created; it was continued. The institution is one institution from the Santhanam Committee's recommendation to today, and the 2003 Act gave it a statute rather than a birth. Quote section 24 when an examiner asks whether the Central Vigilance Commission was created in 2003. It was not.

Section 25: the Director of Enforcement, and the 2021 amendment

Notwithstanding anything in the Foreign Exchange Management Act 1999 or any other law, the Central Government shall appoint a Director of Enforcement in the Directorate of Enforcement in the Ministry of Finance on the recommendation of a Committee consisting of:

the Central Vigilance Commissioner, Chairperson; the Vigilance Commissioners, Members; the Secretary in charge of the Ministry of Home Affairs; the Secretary in charge of the Ministry of Personnel; and the Secretary in charge of the Department of Revenue, Ministry of Finance.

Clause (b): the Committee shall take into consideration the integrity and experience of the officers eligible.

Clause (c): no person below the rank of Additional Secretary to the Government of India is eligible.

Clause (d): the Director shall continue to hold office for a period of not less than two years from the date he assumes office.

The 2021 amendment, and this is a currency point. Two provisos were inserted by Act 46 of 2021, section 2, with effect from 14 November 2021:

• the period for which the Director holds office on his initial appointment may, in public interest, on the recommendation of the Committee and for reasons to be recorded in writing, be extended up to one year at a time;
• no such extension shall be granted after the completion of a period of five years in total, including the initial appointment.

Clause (e): the Director shall not be transferred except with the previous consent of the Committee.

Clauses (f) and (g): the Committee, in consultation with the Director, recommends officers for posts above the level of Deputy Director and recommends extension or curtailment of their tenure, and the Central Government passes such orders as it thinks fit to give effect to the recommendation.

Why section 25 surprises students, and why it is worth a paragraph. The Directorate of Enforcement is a Finance Ministry body enforcing the foreign exchange and money laundering laws. Its Director is nevertheless appointed on the recommendation of a Committee chaired by the Central Vigilance Commissioner, under this Act. The reason is Vineet Narain, which chapter 580 works: the Supreme Court gave directions on the Enforcement Directorate as well as on the Central Bureau of Investigation, and Parliament in 2003 put both sets of directions into statute, one in section 25 and the other in section 26.

And note the exact shape of the 2021 change, because it is easy to state loosely. The minimum tenure of two years is untouched. What 2021 added is a ceiling of five years reached one year at a time, each extension needing the Committee's recommendation, the public interest and reasons recorded in writing. The same amendment was made for the Director of the Delhi Special Police Establishment, and chapter 800 works it there.

Section 26: the section that rebuilt the CBI's statute

Section 26 amended the Delhi Special Police Establishment Act 1946, and everything chapters 780 to 800 read in that Act was put there by this one.

(a) inserted section 1A, an interpretation section: words used in that Act and not defined there but defined in this Act have the meanings assigned in this Act.

(b) substituted section 4 and inserted sections 4A, 4B and 4C:

• section 4(1): the superintendence of the Delhi Special Police Establishment so far as it relates to investigation of offences under the Prevention of Corruption Act 1988 shall vest in the Commission;
• section 4(2): in all other matters the superintendence vests in the Central Government;
• section 4(3): the administration vests in the Director, appointed by the Central Government, with such of an Inspector-General's powers as that Government specifies;
• section 4A: the Committee that recommends the Director, which shall take into consideration the views of the outgoing Director and shall recommend a panel of officers on the basis of seniority, integrity and experience in the investigation of anti-corruption cases, chosen from the Indian Police Service;
• section 4B: the Director shall hold office for not less than two years notwithstanding anything to the contrary in the rules, and shall not be transferred except with the previous consent of the Committee;
• section 4C: appointments of Superintendent of Police and above, and extension or curtailment of their tenure, on the Committee's recommendation after consulting the Director.

(c) inserted section 6A: the Delhi Special Police Establishment shall not conduct any inquiry or investigation into a Prevention of Corruption Act offence except with the previous approval of the Central Government where the allegation relates to (a) employees of the Central Government of the level of Joint Secretary and above and (b) such officers as are appointed by the Central Government in the public sector bodies; with sub-section (2) dispensing with approval for cases involving arrest of a person on the spot on the charge of accepting or attempting to accept any gratification other than legal remuneration.

Subramanian Swamy: a Constitution Bench strikes down part of this Act

Facts. Subramanian Swamy v. Director, Central Bureau of Investigation, (2014) 8 SCC 682, AIR 2014 SC 2140, Writ Petition (Civil) No. 38 of 1997, decided on 6 May 2014 by a Constitution Bench of five judges: R.M. Lodha CJ, who wrote the judgment, A.K. Patnaik, Sudhansu Jyoti Mukhopadhaya, Dipak Misra and Fakkir Mohamed Ibrahim Kalifulla JJ. The challenge was to section 6A of the 1946 Act, inserted by section 26(c) of this Act, which required the Central Government's previous approval before the agency could even inquire into a corruption allegation against an officer of the level of Joint Secretary and above.

Held. The Court held that section 6A(1), which requires the approval of the Central Government to conduct any inquiry or investigation into an offence under the Prevention of Corruption Act 1988 where the allegation relates to employees of the Central Government of the level of Joint Secretary and above and to such officers as are appointed by the Central Government in corporations, Government companies, societies and local authorities owned or controlled by the Government, is invalid and violative of article 14 of the Constitution; and, as a necessary corollary, the provision contained in section 26(c) of Act 45 of 2003 to that extent is also declared invalid. The writ petitions were allowed.

Read that second sentence again, because it is the fact this chapter exists to deliver. The Supreme Court did not merely strike down a section of the 1946 Act. It declared section 26(c) of the Central Vigilance Commission Act 2003 itself invalid to that extent. A student who can say that a Constitution Bench struck down a provision of the very Act that created the statutory Commission has said something no summary in the market says.

Why it matters, and the link back to chapter 580. Section 6A was the Single Directive in statutory clothing. The Single Directive was the executive instruction, struck down in Vineet Narain in 1998, that the agency could not investigate senior officers without prior sanction. Parliament re-enacted it in 2003 as a section of an Act; and in 2014 the Court struck it down again, this time on article 14: a classification that shields officers of and above a particular rank from even a preliminary inquiry has no rational relation to the object of detecting and punishing corruption, since the status of the accused is irrelevant to whether the offence was committed.

And the sequel, which belongs to chapter 740 but should be flagged here. Section 17A of the Prevention of Corruption Act 1988, inserted by the amendment of 2018, requires previous approval before a police officer conducts any enquiry, inquiry or investigation into an offence alleged to have been committed by a public servant where the alleged offence relates to a recommendation made or decision taken in the discharge of official functions. That is a differently drawn requirement, resting on the nature of the act rather than on the rank of the officer, which is precisely the distinction Subramanian Swamy turned on.

Section 27, and the Schedule

Section 27(1): repeal. The Resolution of the Ministry of Personnel, Public Grievances and Pensions No. 371/20/99-AVD.III dated 4 April 1999, as amended on 13 August 2002, is repealed.

Section 27(2): saving. Notwithstanding that repeal and the cesser of operation of the Central Vigilance Commission Ordinance 1999, anything done or action taken under the Resolution and the Ordinance, including appointments and actions under the Delhi Special Police Establishment Act 1946 and the Foreign Exchange Regulation Act 1973 as amended by that Ordinance, is deemed to have been done under this Act as if the amendments had been in force at all material times.

Section 27 completes the story chapter 580 told. Vineet Narain was decided in December 1997. The Government gave effect to it first by Ordinance in 1999, then by Resolution, and finally by this Act in 2003; and section 27 stitches the three together so that nothing done in the interval fell through.

The Schedule carries the form of oath under section 5(3), set out in chapter 620.

A worked example

The Central Government proposes to notify, under section 8(2)(b), the level of officers of Central public sector undertakings who will fall within the Commission's inquiry jurisdiction.

Is a notification needed at all? Yes, if the Government wishes to confine the jurisdiction, because the proviso to section 8(2)(b) provides that until such a notification issues, all officers of those bodies are deemed to be within clause (d). Doing nothing leaves the jurisdiction at its widest.

What Parliament may then do. Section 22 requires the notification to be laid before each House while in session for a total of thirty days, and both Houses may, before the expiry of the session immediately following, agree in modifying it or in resolving that it should not be made. If they modify it, it has effect only as modified; if they resolve against it, it is of no effect; and in either case anything previously done under it stands.

The Commission then wishes to settle its own procedure for transacting business. Section 9(2) requires a unanimous decision of the Commissioners, and section 21(2)(b) requires the procedure to be made by regulation, which by section 21(1) needs the previous approval of the Central Government and must not be inconsistent with the Act or with the rules made under section 20. Unanimity inside the Commission and approval outside it.

A difficulty arises in giving effect to some provision of the Act. Section 23 would have allowed the Central Government to remove it by order, but only within two years of commencement, so the power expired in 2005 and the only route now is an amendment.

A question arises about the validity of something the pre-2003 Commission decided. Section 24 answers it: the Commission set up by the Resolution of 11 February 1964 was continued, its actions and decisions are deemed to have been taken by the statutory Commission, its pending proceedings deemed transferred, and its employees, assets and liabilities carried over.

And a party contends that the requirement of the Central Government's approval before an inquiry against a Joint Secretary still applies. It does not. Section 6A was declared invalid in 2014 and section 26(c) of this Act with it, and in 2023 the declaration was held to operate from 11 September 2003, so the requirement never validly existed.

What beginners get wrong

That sections 20 to 27 are formal. Section 25 appoints the Director of Enforcement, section 26 rewrote the law of the Central Bureau of Investigation, and part of section 26 has been struck down.

That the Commission makes its own rules. The Central Government makes the rules under section 20. The Commission makes regulations under section 21, with that Government's previous approval, and they must not be inconsistent with the rules.

That section 6A is still in force. It was declared invalid on 6 May 2014, and section 26(c) of this Act with it.

That the 2021 amendment extended the Director of Enforcement's term to five years. It allows extension up to one year at a time, in public interest, on the Committee's recommendation and for reasons recorded in writing, subject to a total of five years including the initial appointment.

That the Commission was created in 2003. Section 24 continues the Commission set up by the Resolution of 11 February 1964.

Quick revision

s.20 rules by the Central Government. s.21 regulations by the Commission with the previous approval of that Government, not inconsistent with the Act or the rules.

s.22 the s.8(2)(b) notification, the rules and the regulations are laid before each House for thirty days, and both Houses may modify or annul, without prejudice to anything previously done.

s.23 removal of difficulties by order, barred after two years from commencement, every order laid before each House.

s.24 the Commission set up by the Resolution of 11 February 1964 is continued: its decisions deemed the Commission's, proceedings transferred, employees and assets and liabilities carried over.

s.25 the Director of Enforcement is appointed on the recommendation of a Committee chaired by the Central Vigilance Commissioner with the Vigilance Commissioners and the Secretaries of Home, Personnel and Revenue; not below Additional Secretary; not less than two years; no transfer without the Committee's consent. Act 46 of 2021, w.e.f. 14 November 2021: extension one year at a time, maximum five years in total, in public interest, reasons in writing.

s.26 amended the Delhi Special Police Establishment Act 1946: inserted s.1A; substituted s.4 (superintendence in corruption matters in the Commission, all else in the Central Government, administration in the Director) and inserted ss.4A, 4B, 4C; and inserted s.6A, prior approval for Joint Secretary and above.

Subramanian Swamy v. Director, Central Bureau of Investigation, (2014) 8 SCC 682, five judges, 6 May 2014: s.6A(1) is invalid and violative of article 14, and as a necessary corollary s.26(c) of Act 45 of 2003 to that extent is also declared invalid.

s.27 repeals the Resolution of 4 April 1999 and saves everything done under it and under the Ordinance of 1999.

Test yourself

1. Distinguish the rule-making power under section 20 from the regulation-making power under section 21. Section 20 vests the rule-making power in the Central Government, exercisable by notification in the Official Gazette for carrying out the purposes of the Act, and in particular for the number and conditions of service of the staff under section 7 and any further civil court power to be prescribed under section 11(f). Section 21 vests the regulation-making power in the Commission, but only with the previous approval of the Central Government, and the regulations must not be inconsistent with the Act or with the rules; in particular they may provide for the duties and powers of the Secretary and for the Commission's own procedure under section 9(2). The Commission's power is therefore subordinate in two ways, requiring prior approval and yielding to the rules.

2. What does section 22 require, and how does it differ from the laying of the annual report? Section 22 requires the notification under section 8(2)(b) and every rule and regulation to be laid before each House while in session for a total of thirty days, and empowers both Houses, before the expiry of the session immediately following, to agree in modifying the instrument or in resolving that it should not be made, whereupon it takes effect only as modified or is of no effect, without prejudice to anything previously done under it. The annual report is laid under section 14(3), and Parliament has no power to modify or annul it. The distinction is that section 22 is legislative control over delegated legislation, while section 14(3) is accountability for the exercise of executive functions.

3. Explain section 25 and the amendment of 2021. Section 25 provides, notwithstanding the Foreign Exchange Management Act 1999 or any other law, that the Central Government shall appoint the Director of Enforcement on the recommendation of a Committee chaired by the Central Vigilance Commissioner and consisting also of the Vigilance Commissioners and the Secretaries in charge of Home Affairs, Personnel and Revenue; the Committee is to consider integrity and experience; no one below the rank of Additional Secretary is eligible; the Director holds office for not less than two years; and he may not be transferred without the Committee's previous consent, while appointments above the level of Deputy Director are made on the Committee's recommendation in consultation with him. By Act 46 of 2021, with effect from 14 November 2021, two provisos were inserted allowing the initial period to be extended in public interest, on the Committee's recommendation and for reasons to be recorded in writing, up to one year at a time, subject to a total of five years including the initial appointment.

4. What did section 26 do, and what remains of it? It amended the Delhi Special Police Establishment Act 1946 by inserting section 1A, substituting section 4 and inserting sections 4A, 4B and 4C, and by inserting section 6A. The substituted section 4 vested superintendence over the Establishment's Prevention of Corruption Act investigations in the Commission, superintendence in all other matters in the Central Government and administration in the Director; sections 4A to 4C created the selection Committee for the Director, his minimum two-year tenure and the protection against transfer, and the machinery for appointments of Superintendent of Police and above. Section 6A, requiring the Central Government's previous approval before an inquiry or investigation against officers of the level of Joint Secretary and above, was held invalid and violative of article 14 in Subramanian Swamy in 2014, and section 26(c) of this Act was declared invalid to that extent. Everything else in section 26 stands, and it is the statutory foundation of the Central Bureau of Investigation as it exists today.

5. Was the Central Vigilance Commission created by the Act of 2003? No. It was set up by the Resolution of the Government of India in the Ministry of Home Affairs dated 11 February 1964, on the recommendation of the Santhanam Committee, and section 24 of the Act expressly continues it: its actions and decisions are deemed to be those of the statutory Commission, its pending proceedings are deemed transferred, its employees become employees of the Commission on the same terms and its assets and liabilities are transferred. What the Act of 2003 did, following the directions in Vineet Narain and after the Ordinance of 1999 and the Resolution of 4 April 1999 repealed by section 27, was to give an existing executive body a statutory foundation, a fixed tenure, a charged budget and a defined jurisdiction.