The Rajya Sabha has admitted motions to amend Rules prescribed under three Acts of Parliament.  Mr. P Rajeeve has moved a motion that resolves to annul the Information Technology (Intermediary) Rules.  Mr. Yechuri and Mr. Balagopal have moved identical motions to amend Rules related to the Civil Liability for Nuclear Damage Act.  Mr. Balagopal has moved another motion to amend Rules on airport development fee issued under the Airports Authority of India Act.

Act and Rules

What are ‘Rules’?  Parliament and state legislatures pass Acts, which provide the broad framework for regulating any activity.  Some details may require frequent fine-tuning, and it may be impractical to amend the Act each time such changes need to be made.  For this purpose, the Act has provisions that may authorise the central and state governments (and regulators such as SEBI and TRAI) to prescribe certain details through Rules and Regulations.  These are called subordinate legislation.  Parliament has the authority to review these Rules and modify or repeal them.  Indeed, each House of Parliament has a committee to examine subordinate legislation.  However, these committees (like other Parliamentary committees) are under-resourced.  Actions to amend or annul any Rule are quite rare.

Information Technology (Intermediaries) Rules

The Information Technology Act was passed in 2000 in order to create a framework for e-commerce.  In 2008, this Act was amended.  Among other things, the Amendment Act exempted intermediaries (such as ISPs, website hosts, ecommerce portals, email providers etc.) from liability for any material that was hosted or transmitted using their resources if they did not exercise any control over the content.  They were also required to remove any illegal content if it was brought to their attention.

In April 2011, the government notified the Intermediary Guideline Rules which required all intermediaries to declare certain terms and conditions of use.  [Mr. Rajeeve’s annulment motion relate to the intermediary rules.]  Users are required to agree not to post or transmit content that violated certain norms.  The intermediaries are required to remove the content within 36 hours of being informed of any violation, failing which their exemption from liability may be revoked.  There are four related problems with these Rules.  First, the norms are ill-defined and include terms such as “grossly harmful”, “derogatory” and “blasphemous”.  The Rules may have exceeded the remit provided by the Act in its delegated powers.  Second, the Rules may violate the fundamental right to freedom and expression, as some of these terms may not fall within the scope of reasonable restrictions that may be imposed under Article 19(2) of the Constitution.  Third, the Rules distinguish between content based on the medium of dissemination, whether it is in physical form or in electronic form.  For example, some material that may be legally published in a newspaper may be prohibited from being published on the web version.  Fourth, and possibly, most important, the Rules apply not to the person posting the content but the intermediary.  If an intermediary after being informed by any person – not necessarily an official agency – that the Rules violate the terms, does not then remove the content, such intermediary may face a liability suit.  Risk averse intermediaries may tend to remove even harmless content, thus restricting flow of information and expression.  Indeed, the Centre for Internet and Society in Bangalore has sent fake notices and found that some intermediaries display this behaviour.

The Civil Liability for Nuclear Damage Rules

The principal Act was passed in 2010, and limited the liability of operators of nuclear power plants in case of an incident causing damage.  Operators also had the right to recourse under three conditions: if there was a contract providing such right; if there was a patent or latent defect in the material supplied; if the damage was intentional.  Among other things, the Rules prescribe the minimum norms for a contract that provides right to recourse.  In particular, the contract should specify that recourse is available for the lower of the operator’s liability and the “value of the contract”.  The latter term is not defined, and could, through a contract, restrict the right to recourse in case of a latent or patent defect.  Two identical motions have been moved by Mr. Yechury and Mr Balagopal.  The motion requires the recourse to cover the entire amount of the operator’s liability.  The Rules also require that the right should be available for the time period covered by the product warranty, or the initial licence period, whichever is shorter.  The motion amends this to cover at least 30 years.

The Airport Authority of India (Major Airports) Development Fees Rules

The Act permits AAI to levy development fees in order to upgrade or develop new airports.  In 2009, the central government had approved a development fee to be levied by the Delhi International Airport Limited to levy a development fee but this permission had been struck down by the Supreme Court.  The Court ruled that the Act permitted such a fee only if it was determined by the Regulatory Authority (and not by the government).  These Rules, issued in 2011, permit the AAI to authorise any person to collect such fees if they are approved by the Airports Economic Regulatory Authority.  The motion by Mr. Balagopal seeks to amend these Rules.  The proposed amendment removes the power of AAI to authorise any person to collect the fees.  The amendment also requires that all fees collected by operators before the introduction of these Rules should be assessed and deposited in a separate account.

The Role of Parliament

The Parliament, while delegating the power to make Rules, has the duty to examine them and ensure that they further the objectives of the Act.  Now that some MPs have moved motions on these three Rules, the Parliament should have detailed discussion and careful examination of their implications.  Indeed, it should equip its committees (including the committees on subordinate legislation) with the resources needed to undertake such examination of all Rules and Regulations.  For example, other Rules notified under the Information Technology Act have implications for the protection of data kept in a fiduciary capacity, as well as privacy of cybercafé users.  Standing committees which would have examined Bills before they were passed may be in a good position to review the Rules and Regulations related to each Act.  It is only by exercising these oversight functions that Parliament can ensure that the final law (including Rules) reflect its intent.