The Regulating Act 1773

The Regulating Act 1773

The East India Company was in dire financial straits by 1773. Because it was a monopoly trading company in India and the east, and many influential people were shareholders, the company was important to Britain. The company paid the government £400,000 a year to keep the monopoly, but it had been unable to meet its obligations due to the loss of tea sales to America since 1768, when the Dutch gained access to the American market. The Bank of England and the government owed the East India Company money, and it had 15 million pounds of tea rotting in British warehouses. The company was nearly bankrupt due to mismanaged finances, and it was forced to seek a loan from the British government. The East India Company was essentially a trading farm that operated across a large portion of India while also maintaining an army to protect its interests. Because the East India Company had no experience ruling, Prime Minister Lord North decided to establish government control. 
 
The Regulating Act 1773

Two committees were established by the British Parliament:

1.    The Secret Committee
2.    The Select Committee. 
 
•    With the Regulating Act 1773, and Lord North decided to overhaul the East India Company's management and provide some form of legal government for the East India Company's Indian possessions. This was the first step on the road to centralization of power in India. 
 
•    The Act established a system in which it supervised (regulated) the East India Company's work but did not assume power. 
 
•    The "Regulating Act" was named after the fact that the British government regulated the company rather than taking it over. Despite the Company's financial difficulties, the East India Company had a strong lobby in Parliament. The Shareholders, as well as this Parliamentary lobby, were against the act.
 

Provisions of the Act

The Regulating Act of 1773 allowed the Company to keep its former possessions and power in India, but the British government took control of the management.
UPSC Prelims 2024 dynamic test series
 
1.    Directors' Election: The Company’s directors were elected for a four-year term. Every year, one-fourth of them retire, and the retiring Directors are not eligible to be re-elected. 
 
2.    To maintain parliament's control over the company, the directors were required to submit all civil military correspondence with the Indian authorities to the secretary of state in England on a regular basis. All correspondence relating to India's revenues had to be filed with the Treasury in England. 
 
3.    To prevent corruption, it prohibited company servants from engaging in any private trade or accepting gifts or bribes from natives.
 
4.    The Act made Warren Hastings, the Governor of Bengal, the first Governor General of India, and subsumed the presidencies of Madras and Bombay under Bengal's control. No other presidency could now issue orders to begin hostilities, declare war, or negotiate a treaty with the Indian Princes. 
 
5.    The Governor General of India and his four-member council now have legal standing. Their term of office was five years, but the king had the power to dethrone them earlier if the court of directors recommended it. 
[We commonly refer to Warren Hastings as India's First Governor General. Warren Hastings' official title, however, was Governor of the Presidency of Fort William. From the time of Lord William Bentinck in 1833 until 1858, when India was taken over by England, this office became Governor General of India; it remained Viceroy and Governor-General of India until 1947]
 
6.    The Act named four additional men to serve on the Supreme Council of Bengal with the Governor-General: Lt-Gen John Clavering, George Monson, Richard Barwell, and Philip Francis. Barwell was the only one who had travelled to India before. The "Council of Four" was the name given to this group of councillors.
 
7.    The governor general in council was given complete authority over the company's Indian acquisitions, as well as the revenue of Bengal, Bihar, and Orissa, as well as the general civil and military administration of the Presidency. While exercising their power to make war and peace, the Governor General in Council placed the presidencies of Bombay and Madras under his control and supervision.
 
8.    The Governor General and the Council were required to keep the court of directors fully informed of all their activities affecting the company's interests, as well as to work in complete obedience to the court of directors' orders and instructions.
 

9.    India's First Supreme Court: 

•    In Calcutta's Fort William, a supreme court was established.
 
•    Judges from the United Kingdom were to be dispatched to India to administer the British legal system there. This Supreme Court was made up of a Chief Justice and three regular judges, or Puisne Judges, who had to be barristers with at least five years of experience and were appointed by His Majesty. The first Chief Justice was Sir Elijah Imphey. 
 
•    All British subjects, including the provinces of Bengal, Bihar, and Orissa, were subject to the Supreme Court. 
 
The Regulating Act 1773
•    Position of the Supreme Court of Calcutta: There was nothing in the act that made sense in terms of the Supreme Court's relationship with the Government of Bengal. The company was placed under the control of the British government by the Supreme Court.
 
•    Jurisdiction: The Supreme Court has a broad range of authority. Cases against Calcutta companies and corporations are also brought before the court. Civil jurisdiction applied to His Majesty's subjects, people employed directly or indirectly by the company, and people who voluntarily agreed in writing to have their disputes heard by the Supreme Court.
 
•    The Supreme Court was also granted the authority to hear cases brought against the Governor General and any of his Council members.
 
•    Criminal Jurisdiction: The court was not given jurisdiction over all native Indians in Calcutta and the Bengal, Bihar, and Orissa territories. It was only given jurisdiction over all British subjects (though it was unclear who constituted a British subject?). If Calcutta was under British rule, could all residents be British subjects? ), as well as their servants and company employees? 
 
•    The Supreme Court was given permission to hear the cases against the Governor General and his council members, but it did not have the authority to arrest or imprison any of them. The Supreme Court was also ordered to take into account and respect Indian religious and social customs. 
 
•    Appeals from provincial courts could be made to the Governor-General-in-Council, who was the final court of appeal. 
 
•    The Governor General-in-rules Council's and regulations were not to be registered with the Supreme Court. Later, an amendment to this act (the amending act of 1881) was passed, exempting the actions of public servants in the company acting in their official capacity from the Supreme Court's jurisdiction.
 

Assessment of the Act 

 
•    Nothing in the act addressed the people of India who were paying taxes to the company but were now starving to death in Bengal, Bihar, and Orissa. 
 
•    The Regulating Act of 1773 is referred to as India's First Step of Government Control. By parliamentary act, the executive and judicial administrations of the country were put on a regular, if imperfect, footing from 1773 onwards. 
 
•    The Act's provisions were also aimed at combating corruption, but they were ineffective. The first Governor General, Warren Hastings, faced the most serious charges, and he was impeached for corruption during the trial. In fact, due to the corruption, the entire council was split into two factions: the Hastings Group and the Francis Group. 
 
•    They battled it out over allegations of corruption levelled against them. As a result, Pitt's India Act of 1784 was passed to prevent corruption, and Lord Cornwallis, an uncorrupted individual, was appointed to bring a corruption-free environment to the company. Because council decisions had to be made by a majority, many decisions could not be made according to Hastings' wishes, as the Governor General in Council was first among equals and had no veto. 
 
•    This problem was solved in Pitt's India Act 1784, which reduced the number of Council members in Council other than the Governor General to three and gave the Governor General the right of casting vote in the event that the members present in a meeting of the council were evenly divided in opinion at any time. 
 
•    In the Act of 1784, he was also given veto power over major decisions. 
 
•    Another issue involved the Supreme Court's jurisdiction. There were numerous misunderstandings about its jurisdictions as well as who it applied to. The Declaratory Act of 1781, the Pitt's India Act of 1784, and the Amendment Act of 1786 fixed many of the Act's flaws.

Any suggestions or correction in this article - please click here ([email protected])

Related Posts: