Delegation, Exemptions and Rule-making

In one line

Chapter XXIX is how the Act is actually run: officials who act in good faith are protected and need not name their informants, the Central Government may delegate everything except rule-making, may attach conditions to any approval and withdraw it for breach, may condone delay, may exempt whole classes of companies subject to a parliamentary check, and must report annually to Parliament on how the Act is working.

In exam wording: under section 462(1) the Central Government may, in the public interest, by notification, direct that any of the provisions of this Act shall not apply to such class or classes of companies, or shall apply to them with such exceptions, modifications and adaptations as may be specified in the notification.

Why the law has this at all

A statute of four hundred and seventy sections applied to millions of entities of every size cannot be run out of the text alone. Three problems arise and this group of sections answers each.

The first is officials. People who administer a regulatory statute make decisions that harm somebody, and act on information given in confidence. If every decision exposed them to suit and every informant could be named in court, administration would stop. Hence s.456, protecting good faith action, and s.457, protecting the source of information behind an investigation.

The second is rigidity. The Act's obligations were written with the large public company in mind, and applying all of them to a one person company, a Government company, a section 8 company or a Nidhi would be absurd. Hence s.462, the class exemption power, and hence the many sections whose operation is qualified by "as may be prescribed".

The third is capacity. The Central Government cannot itself decide every application under the Act. Hence s.458, delegation of powers other than rule-making; hence s.459, which lets an approval be given on conditions and withdrawn for breach; and hence s.460, which lets delay be condoned without a court.

The counterweight to all of that is parliamentary supervision, and it appears three times: delegation notifications are laid before each House, s.458(2); exemption notifications are laid in draft and can be blocked or modified, s.462(2); and the working of the Act itself is reported annually to Parliament, s.461. An answer that pairs each power with its check is doing what this topic asks.

Sections 456 and 457: protecting the administration

456: good faith. No suit, prosecution or other legal proceeding shall lie against the Government, or any officer of the Government, or any other person, in respect of anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or orders made under it, or in respect of the publication by or under the authority of the Government or such officer of any report, paper or proceedings.