Regulating Act 1773 – UPSC GS2

Regulating Act, 1773 was the First Parliamentary Ratification, Codification, Confirmation, Justification or Authorization defining the Powers and Responsibilities of the Various Organs of the East India Company including its territorial control over Bengal.
By 1773 the East India Company was in dire financial constrains or crisis asking for assistance from the British Government. Faced with corruption and nepotism or partiality amongst the company officials in India, the British Government enacted the Regulating Act on 10 June in 1773 to control the activities of the East India Company.
Causes of Regulating Act of 1773
Regulating Act, of 1773 had some ultimate causes before reformatting the policies of the company and regulating the authoritative power of the Company over the territory of British Governmental Rule in India. The causes of regulating act are:
  • Deteriorating financial condition of the company and its heavy debts.
  • Corruption amongst the servants of the company,
  • Complicated Administrative problems of the dual Government,
  • Public opinion against the Company gathered Momentum in India,
  • Lack of proper Judicial Administration,
  • Lack of central authority to control and guide the affairs of the Company,
  • Company’s defeats in 1769 at the hands of Haider Ali of Mysore,
  • Terrible famine in Bangla which took heavy toll of its population,
  • The company applied for a loan of one Million Pounds in 1772.
Passing the Regulating Act of 1773
The Regulating act of 1773 had three main objects as;
  • To reform the constitution of the company.
  • To reform the Company’s Government in India.
  • To provide remedies against illegalities and oppressions committed by servants of the company in India.
Salient Features
  • Appointment of the Governor General and Council: A Governor General and four Councilors were appointed in the Presidency of Fort William in Calcutta.
  • Election for Directors: the directors of the company were elected for five years instead of being elected for one year. One- fourth of them retired every year and the retiring Directors were not entitled to be elected again.
  • Decision by Majority Present: the Regulating Act declared the names of the First Governor General and four Councillors. Warren Hastings, who was a Governor of Calcutta, was appointed the first Governor General. Their term of office was five years and the king was empowered to dethrone them even earlier after the recommendation of the Court of Directors.
  • Control over Correspondence: In order to assert parliament’s control over the company, the directors were required to place regularly all their correspondence, regarding civil military affairs within the Indian authorities, before the Secretary of the State. All correspondence regarding to revenues in India was required to be placed before the Treasury in England.
  • Extent of Governor General’s power: The governor general in council was given all the power to govern the company’s territorial acquisition in India, to administer the revenue of Bengal, Bihar, Orissa and to supervise and control the general civil and military government of the Presidency town.
  • Bombay and Madras under the control of Governor General: The presidencies of Bombay and Madras were placed under the control and superintendence of the Governor General in Council while exercising their power to make war and peace. The Governor General and the Council were to keep the Court of Directors fully informed of all their activities affecting the interests of the company and they were also to work in entire obedience to the orders and instructions of the court of directors.
  • Establishment of Supreme Court of Justice: Section 13 of the Regulating Act had empowered the Crown to establish a Supreme Court of Judicature at Fort William in Calcutta. The Supreme Court exercised civil, criminal, admiralty, equity and ecclesiastical jurisdiction over British Subjects and were not authorized to try matters pertaining to the Indian natives. However, as time passed the Supreme Court did not exercise its powers as enumerated under the Regulating Act 1773.
It is to be said the Regulating Act although passed for the benefit of natives residing in India proved to be fatal for the whole administration of justice in India as the conflicts between the executive and the judiciary was visible not only to the Indians but also to the British Parliament. Thus, the Regulating Act rather than bringing far reaching changes in Indian administration, brought about conflicts and disparities amongst the servants of the Company itself.

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