The Static `Act' that changes - Through the Rules

The Act , meaning the Companies Act, 2013 is fixed . Though it is awaiting a third amendment through the Parliament. Meantime the Central Government has announced 48 rules under 29 Chapters since the Act came into force since 23th September, 2013. The Act gradually replaced the Companies Act, 1956.

The rules state the procedure But through the rules framed from time to time, the approach to the law has changed. The Companies Act, 2013 when brought into effect did not differentiate the application to the private and public companies. Gradually to overcome operational issues, the law has undergone change. To-day the Companies Act is not the Act which the Parliament approved. Though it has remained the same except for the amendments of the Act. The Act is procedure based. This is again implemented through the Rules framed over a period of time.

Section 469 of the Act permits the Central Government to make rules. The rules are thus announced through the MCA. Like each day which is different, the Act means differently each day with a new rule. The rule is then amended many times. Any rule announced by MCA is put up to Parliament for approval. Section 469 comes in here.

The constitution of the country segregated the authorities of the country into three. The legislative frames the laws for the executive or the administration to follow. If the people for whom the law is meant is aggrieved he goes to the judiciary for relief from the pain suffered due to the implementation.

Any rule framed and announced by MCA is ratified by the Parliament and the rule becomes enforceable. The rule framing approach to change the law to go with the approach of ease of doing business often does not give the result aimed at. That requires the law to be amended through the Parliament.

Unlike the passing of the law through the legislature, a rule is not notified for public comment. It is just announced through the Gazettee to be ratified by the Parliament subsequently. Since the opinion of the public is not taken by MCA before implementation the rule has to be amended several times. With the several rules announced followed by amendments to the rules has caused the Act to become an exhaustive piece of legislation . The number of sections is swelling so is the number of rules increasing.

The rules framed by MCA is the law being framed by the executive who implement it also. This approach is adopted to make things easy but it only goes to complicate matters instead of easing the law. The forms included in the rules meant to be filed with the Registrar of Companies are not always uniform and often makes it difficult to comprehend when a user is required to use when he sees it for the first time.

The forms in the rules need to be reviewed to bring about uniformity in the rules. If this is not done then there will be further lack of uniformity in the forms in new forms that are going to be added. A simple contradiction in two forms in the use of bracket at the end of the form will complicate the situation further. In one form the designation is in bracket while in another form the bracket is used in the name. The position demands review of the forms. The framers are experts in the subject but we must remember we use a foreign language which is still our official language so the domain expert may not be an expert in the language. Action in the direction is a sine qua non for the law to be enacted smoothly. The approach of easing things through the announcement of rules needs to be done by addressing the weak point. We cannot continue to be in this way. A rule is not announced to complicate matters but to ease things.

Announcing more rules is bound to complicate things. So the rules need to be reviewed.