04 July 2010
State and Central legislature and Parliament respectively passes legislation or laws. Before it's passed, it's usually referred to as a "bill." Once it's passed and signed by the President or Governor, it normally is called Act. Now, some Acts require regulations or rules to be issued in order to apply the general principles in the law to the real world- Thus the rules come into picture. Rules are always carved out of the Parent Act and Parent Act act as a guideline for the rules.
05 July 2010
i will like to add to Mr. Sanjay Gupta's reply that rules are made when the power is delegated within the act. This delegation is done as in some areas in a act there is a need to amend the laws time & time again.
also it can be said that "a no. of notifications issued when compiled makes Rules."