THE REGULATING ACT OF 1773

SUBMITTED BY:
ASHUTOSH SINGH (2218)
BBA LLB ,2ND SEMESTER

SUBMITTED TO:
MS PRIYADARSHANI
FACULTY OF LEGAL HISTORY

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 DECLARATION BY THE CANDIDATE

I, hereby, declare that the work reported in the BBA L.L.B (Hons.)
Project Report entitled “THE REGULATING ACT OF 1773” submitted
at CHANAKYA NATIONAL LAW UNIVERSITY PATNA is an
authentic record of our work carried out under the supervision of Ms
Priyadarshani.

I have not submitted this work elsewhere for any other degree or
diploma. I am fully responsible for the contents of my Project Report.

(Signature of the Candidate)

ASHUTOSH SINGH (2218)
BBA LLB, 1st year
SEMESTER -2ND
CNLU, Patna
Dated

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 ACKNOWLEDGEMENT

I would like to show my gratitude towards my guide Ms Priyadarshani,

Faculty of Legal History, under whose guidance, I structured my project.
I owe the present accomplishment of my project to my CNLU librarians,
who helped me immensely with materials throughout the project and
without whom I couldn’t have completed it in the present way.

I would also like to extend my gratitude to my friends and all those

unseen hands that helped us out at every stage of my project.

THANK YOU,
ASHUTOSH SINGH (2218)
SEM.–2ND
CNLU, PATNA

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 Table of Contents

Chapter-(1)
Introduction…………………………………………………………………………………………………………5
Objective……………………………………………………………………………………………………………..7
HYPOTHESIS……………………………………………………………………………………………………………………………………………7

METHODOLOGY……………………………………………………………………………………………………7

Chapter-(2)
Reason behind 1773 Act……………………………………………………………………………………….9

Chapter-(3)
Provisions of Regulating Act……………………………………………………………………………….11
IMPORTANT PERSONS RELATED TO THE ACT.........................................................13
Chapter-(4)
Supreme Court Of Judicature…………………………………………………………………………….14

Chapter-(5)
Case Law……………………………………………………………………………………………………………16

Chapter-(6)
Conclusion…………………………………………………………………………………………………………20
Bibliography……………………………………………………………………………………………………….21

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INTRODUCTION

The Regulating Act of 1773 was an Act of the Parliament of Great Britain intended to
overhaul the management of the East India Company's rule in India. 1 It was passed by the
British Parliament for the regulation of the British East India Company’s Indian
territories, mainly in Bengal. 2 It was the first intervention by the British government in
the company’s territorial affairs and marked the beginning of a takeover process that was
completed in 1858.it was passed by Lord North’s Government in 1773. It was designed to
remove the evils inherent in the Company’s constitution and to give an orderly and
efficient government to its territories in India.

The Bill for this act was introduced by Lord North on May 18, 1773. It is therefore also
called Lord North’s Bill. Lord North ‘emphasized the need of placing the Company’s
affairs on a solid, clear and decisive establishment.’ However, the Bill received strong
opposition from different quarters, but eventually it got passed and was called The
Regulating Act of 1773. The Regulating Act was a very long document. It remodeled the
Company’s constitution as it existed in working in London and also introduced important
changes in the government of its Indian possession. The occasion for the Regulating Act
was the company’s misgovernment of its Bengal lands, brought to a crisis by the threat of
bankruptcy and a demand for a government loan. The main provisions of the act were the
appointment of a governor-general of Fort William in Bengal with supervisory powers
over the presidencies of Madras (now Chennai) and Bombay (now Mumbai).

The governor-general had a council of four and was given a casting vote but no veto. A

1
http://www.britannica.com/EBchecked/topic/496238/Regulating-Act
2
https://www.gktoday.in/gk/regulating-act-1773_25/

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supreme court of four English judges was set up in Calcutta (now Kolkata). Then the
term of the directors of east India Company was increased from one year to 4 year and
provision was made that every year one-fourth directors were elected in rotation. They
got all the powers, civil and military regarding all the company acquisitions as well as
revenue in the kingdoms of Bihar, Bengal and Orissa.

Warren Hastings was appointed as the first Governor General and other three came from
England. All were to hold office for 5 years but king can remove them if Court of
directors recommends the removal.

The following conditions invited the Parliamentary intervention in the

Company’s affairs. The English East India Company became a territorial power when it
acquired a wide dominion in India and also the Diwani rights. Its early administration
was not only corrupt but notorious. When the Company was in financial trouble, its
servants were affluent. The disastrous famine which broke out in Bengal in 1770 affected
the agriculturists. As a result, the revenue collection was poor. In short, the Company was
on the brink of bankruptcy. In 1773, the Company approached the British government for
an immediate loan. It was under these circumstances that the Parliament of England
resolved to regulate the affairs of the Company. Lord North, the Prime Minister of
England, appointed a select committee to inquire into the affairs of the Company. The
report submitted by the Committee paved the way for the enactment of the Regulating
Act.

The main objectives of this Act were:-

1. Reform the constitution of the company.

2. To reform the company’s government in India.
3. To provide remedies against illegalities of company’s servants.

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AIMS AND OBJECTIVES

Detail analysis of Regulating Act of 1773 and its impact on administrative, legislative
and judicial system in India.

What were reasons behind the implementation of it and whether it has been able to
justify it aims and objectives.

HYPOTHESIS

Regulating Act of 1773 has been passed to provide governance to the company and curve
down the irregularities of company’s servants. This Act provided improvised the existing
judicial system and established the Supreme Court of Judicature at Calcutta.

METHODOLOGY

Researcher in the project has taken doctrinal method of research methodology. Doctrinal
research involves analyze of case law, arranging, ordering and systematizing legal
proposition and study of legal institution through legal reasoning or rational deduction.
In this research field work is not needed and library reference is through enough. It is
only based on library. The source of data is act judgment, legislation, and judiciary. It is
not concerned with people. References have been taken from online, books, documents
and journals.

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SOURCES OF DATA COLLECTION

1. INTERNET WEBSITES AND ARTICLES

2. BOOKS

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 2.REASONS BEHIND 1773 ACT

By 1773, the East India Company was in dire financial straits. 3 The Company was
important to Britain because it was a monopoly trading company in India and in the east
and many influential people were shareholders. The Company paid GB£400,000
(present-day (2014) equivalent is £43.3 million) annually to the government to maintain
the monopoly but had been unable to meet its commitments since 1768 because of the
loss of tea sales to America. About 85% of all the tea in America was smuggled Dutch
tea. The East India Company owed money to both the Bank of England and the
government: it had 15 million lbs (6.8 million kg) of tea rotting in British warehouses and
more en route from India.

Lord North decided to overhaul the management of the East India

Company with the Regulating Act. This was the first step to the eventual government
control of India. The Act set up a system whereby it supervised (regulated) the work of
the East India Company. The provisions of the Act clearly indicate that it was directed
mainly to the malpractice and corruption of the company officials. 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 were:-

 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 of central authority to control and guide
3
http://www.indhistory.com/regulating-act.html

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 the affairs of the Company.
 Company’s defeats in 1769 at the hands of Haider Ali of Mysore.
 Terrible famine in Bangal which took heavy toll of its population.
 The company applied for a loan of one Million Pounds in 1772.

3.PROVISIONS OF THE ACT

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The Regulating Act reformed the Company’s Government a Home and in India. The Act
set up a system whereby it supervised (regulated) the work of the East India Company
but did not take power for itself.4 The important provisions of the Act were:

(i) The term of office of the members of the Court of Directors was extended from one
year to four years. One-fourth of them were to retire every year and the retiring Directors
were not eligible for re-election.

(ii) The Governor of Bengal was styled the Governor-General of Fort William whose
tenure of office was for a period of five years.

(iii) A council of four members was appointed to assist the Governor-General. The
government was to be conducted in accordance with the decision of the majority. The
Governor-General had a casting vote in case of a tie.

(iv)The Governor-General in Council was made supreme over the other Presidencies in
matters of war and peace.

(v) Provision was made in the Act for the establishment of a Supreme Court at Calcutta
consisting of a Chief Justice and three junior judges. It was to be independent of the
Governor-General in Council. In 1774, the Supreme Court was established by a Royal
Charter. Section 13 of this Act empowered the crown to establish the Supreme Court of
Judicature.

4
Lucy S. Sutherland, “The East India Company in 18th Century Politics” Page No-147

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(vi) This Act prevented the servants of the Company including the Governor-General,
members of his council and the judges of the Supreme Court from receiving directly or
indirectly any gifts in kind or cash.

(vii) In order to assert Parliament’s control over the company, directors were required to
place regularly all corresponding to the concerned authorities of Secretary and Treasury. 5

(viii) The subordinate presidencies were required to send regularly all detail of revenue
and other important matters to the Governor General.

(ix) Warren Hastings was appointed as the first Governor General and other three came
from England. All were to hold office for 5 years but king can remove them if Court of
Directors recommends the removal.

The provisions of the Act clearly indicate that it was directed mainly to the malpractice
and corruption of the company officials.

IMPORTANT PERSON RELATED TO THIS ACT

1. WARREN HASTINGS(FIRST GOVERNOR GENERAL)

5
Penderel Moon, “Warren Hastings and British India” Page No-92

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2.LORD NORTH(ONE WHO INTRODUCED IT)

4.SUPREME COURT OF JUDICATURE

The promulgation of Regulating Act of 1773 by the King of England paved the way for
establishment of the Supreme Court of Judicature at Calcutta. The letters of Patent was

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issued on 26 March 1774 to establish the Supreme

Court of Judicature at Calcutta, as a Court of Record, with full power & authority to hear
and determine all complaints for any crimes and also to entertain, hear and determine any
suits or actions against any of His Majesty’ subjects in Bengal, Bihar and Orissa. 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 consisted of a Chief Justice
and the three other puisne judges, being barristers of not less than five years standing to
be appointed by His Majesty. Sir Elijah Emphey was appointed as the first Chief Justice.
The qualification laid down for appointment were that only barristers of not less than five
year standing could be appointed as judges. It was also the Court of Records. The court
got the jurisdictions in civil, criminal, admiralty and ecclesiastical jurisdiction.

It was given very wide jurisdiction covering every possible type of litigations going on
the Indian courts in those days. Cases against company and corporation of Calcutta also
placed under the court civil jurisdiction. Even his Majesty’s subjects or persons employed
directly or indirectly by the company or persons who have voluntarily agreed in writing
to refer their disputes to the Supreme Court were under its jurisdiction. Supreme Court
was also given permission to accept cases against the Governor General and any of his
Council members.

In criminal cases, the court was required to

follow as far as possible, the criminal procedures of British courts. The court was not
given jurisdiction over all the native Indian residing in Calcutta and within the territory of
Bengal, Bihar and Orissa. It was only vested with the jurisdiction over all British
subjects, their servants and the persons employed by the company. Supreme Court had
given permission to accept the cases against Governor General and his council members,
but court had no power to arrest or imprisons any of them in any action. Ecclesiastical
Jurisdiction (Church) of the court was to all subjects residing in Bengal, Bihar and Orissa.

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The court was also vested with the entire jurisdiction which was available to court of
Admiralty in England to the all matters civil maritime and all maritime crimes. The
jurisdiction of the court was not extended to all the persons of Bihar, Orissa and Bengal.

It was only extended to the servants of majesty and company. Writ Jurisdiction was most
important jurisdiction which was made available to the court by the issue of the
prerogative writs. It was also authorized to make rules for its procedure subjects to the
provision that the King-in-Council approve, reject or modify these rules. The appeals
from the Supreme Court were made to the King in Council in England.

Laws made by Governor General Council did not become effective until they were
registered in the Supreme Court. It also had power to appoint such clerks, and other
ministerial officers of the said Court, with such reasonable salaries, as shall be approved
of by the said Governor-General and Council; and to form and establish such rules of
practice, and such rules for the process of the said Court, and to do all such other things
as shall be found necessary for the administration of justice, and the due execution of all
or any of the powers which, by the said charter, shall or may be granted and committed to
the said Court; and also shall be, at all times, a court of record, and shall be a court of
Oyer and terminer, and gaol delivery, in and for the said town of Calcutta. The Supreme
Court Judges and other officials were not allowed to do any private trade in India, and as
well as they were forbidden to accept any gifts and presents.

CASE LAW

NANDA KUMAR CASE (A JUDICIAL MURDER)

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Raja Nanda Kumar, he was resident of Bengal and was a big Zamindar. In March, 1775
he laid a letter before the Council member with charging allegation against Warren
Hastings. According to the letter Warren Hastings received bribe from the former Nawab
wife Munni Begum for granting a Zamindari. Immediately council members, they
arranged meeting to issue summons to Nanda Kumar to attend before council to produce
vouchers in support of his charges of bribery against Hastings. With the summons of
Council, Nanada Kumar produced a letter in person which was written to him by Munni
Begum. The council majority decided that Hasting received a sum of Rs.3,45,105 as
bribe and directed him to refund the money in the Company’s treasury.

While charges against Warren Hastings were still impending, were now subsequently
dropped. Nanda Kumar was suddenly arrested at the instances of a Calcutta merchant
Mohan Das. He was also implicated in a case of conspiracy, when in the absence of
proof; was dropped. He was put on trial before the Supreme Court presided over by the
Sir Elijah Emphey on the charges of forgery. The trial began on 7thJune 1775 and
continued for a period of eight days without any adjournment. On the basis of Mohan
Prasad evidence, the verdict of guilty was returned by the jury and Raja Nanda Kumar
was condemned to death. Under the statute passed by the British parliament in1729, the
death sentence was duly executed on 5thAugust, 1775.

Features of trial of Nanda Kumar case:-

Charge preferred against Raja Nanda Kumar was shortly after he had leveled charges
against Warren Hastings. In this particular trial, Judge Emphey was a friend of Warren

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Hastings and his judgment was affected by this fact. Every Judge of the Supreme Court
cross examined the defense witness due to which the whole defense of Nanada Kumar
collapsed. After the trail, when Nanda Kumar was held guilty by the court he filed an
application for granting leave to appeal to the King-in-Council but the court rejected his
application. Nanda Kumar committed the offence of forgery nearly five years ago, i.e.
much before the establishment of Supreme Court. Neither under Hindu Law nor under
Mohammedan Law regarded forgery as a capital crime.

The decision of Supreme

Court, in this case of Nanda Kumar, was condemned for being biased. This case showed
the incapability of Supreme Court to give a fair verdict.

PATNA CASE (1777-1779):

Shahbah Beg Khan, native of Kabul came to India and settled down in Patna. He married

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Nadirah Begum and acquired a large amount of money while in the service of company.
He had no issue, therefore he invited his nephew Bhadur Beg from Kabul to reside with
him the intention to adopt him. But before he could do so he died in December, 1776.
Bahdur Beg took the first step and filed a suit against the Begum in the Patna Provincial
Council for getting right over the property.

In the provincial Court the case placed before Muhammadan law officers.
The officers after full hearing reported to the council that gift deeds were forged
documents and no gift was made in favor of Nadirah Begum by deceased. They also
reported that the nephew, Bahadur Beg could not be adopted under Muslim law.
Therefore, recommended that property be divided into four parts out of which three parts
were to be given to Bahadur Beg on the basis of consanguinity (relationship by blood)
and also heir of the diseased and the fourth part be given to the widow. Nadirah Begum
was dissatisfied with the decision of the provincial Council, and she filed an appeal
before the Sadar-Diwani-Adalat at Calcutta. Due to their busy routine work they could
not considered the matter for a long time.

With indifferent approach of the court, she filed a suit in the Supreme Court against
Bahedur Beg, Kazi and mufti for assault, battery, unlawful imprisonment and claimed
6lakhs as damaged. The Supreme Court issued ordered to arrest of Bahadur Beg, Kazi
and mufti. The Supreme Court decided that the documents were genuine and that Kazi
and mufti did not act in good faith. The court awarded the damages of Rs.3,00,000 in
favor of Nadirah Begum and the law officers were imprisoned. The whole case was
bitterly criticized on the grounds that which law Bahadur Beg and law officers were
subjected to the jurisdiction of the Supreme Court. The Supreme court justified his
jurisdiction over Bahadur Beg as a former and paying land revenue to the company. Both

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the parties were Muslims to which the Mohammedan Law of inheritance was to apply; it
was purely a matter of personal law to Mohammedans. There were no written agreement
between the parties to submit the case to the Supreme Court for a decision.

CONCLUSION

The provisions of the Act clearly indicate that it was directed mainly to the
malpractice and corruption of the company officials. The Act, however, failed to
stop corruption and it was practised rampantly by all from the Governor General at
the top to the lowest district officials. Major charges brought against Hastings in

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his impeachment trial were those on corruption. Corruption divided the Council
into two mutually hostile factions- the Hastings group and Francis group. The
issues of their fighting were corruption charges against each other. Consequently,
Pitt's India act, 1784 had to be enacted to fight corruption and to do that an
incorruptible person, lord Cornwallis, was appointed with specific references to
bring order in the corruption ridden polity established by the company.

In the beginning one of the problem with the Regulating act was that majority
terms were not defined properly by the regulating act and it lead to the conflict
between the Supreme Court Judges and Governor General and Council. Governor
General did not get the power to overrule the majority vote. Because of this, other
three council members always opposed the policies of Governor General.

The significance of the Regulating Act is that it brought the affairs of the Company
under the control of the Parliament. Besides, it proved that the Parliament of
England was concerned about the welfare of Indians. The greatest merit of this Act
is that it put an end to the arbitrary rule of the Company and provided a framework
for all future enactments relating to the governing of India. The main defect of the
Act was that the Governor-General was made powerless because the council which
was given supreme power often created deadlocks by over-ruling his decision.
However, many of these defects were rectified by the Pitt’s India Act of 1784.

BIBLIOGRAPHY

http://www.indhistory.com/regulating-act.html

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http://www.indianetzone.com/14/regulating_act_1773.htm

http://realityviews.blogspot.in/2010/04/part-10-indian-legal-history-regulating.html

http://www.britannica.com/EBchecked/topic/496238/Regulating-Act

V.D. Kulshrestha, “Landmarks in Indian Legal and Constitutional History” 8th

edition in 2005

Wolpert, Stanley (2009). A New History of India (8th ed.)

INDIAN POLITY BY M. LAXMIKANTH

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