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Topic 5 Statutes

2 The Regulating Act, 1773

The Regulating Act of 1773 was passed by the British Parliament to control the territories of the
East India Company majorly in Bengal. This act was passed due to the misgovernment by the British
East India government that introduced a situation of bankruptcy and the government had to
interfere with the affairs of the Company.
The Regulating Act was passed in the British Parliament in June 1773. It was the first parliamentary
ratification and authorization defining the powers and authority of the East India Company with
respect to its Indian possessions.
•
3 Why the need for the enactment of the Regulating Act emerged?/Background/Reasons for
passing the Regulating Act 1773

There were many circumstances that made it necessary for the enactment of the Act. It was the first
direct interference of the British Government in the regulation of the affairs of the East India
Company.
Firstly, the concept of the dual form of administration instituted by Robert Clive was complicated
and brought trouble to the people of India. Under this system, the company had Diwani rights
(obtained after the Battle of Buxar) in Bengal and the Nawab had Nizamat rights (judicial and
policing rights) as secured from the Mughal Emperor. Behind the curtains, Nizamat rights were also
in the hands of Company as the Nawab acted as an agent of the company. This all only laid to the
suffering of the people as they were being exploited by both the Nawabs and the Company and
the later was only concerned with maximising revenue.
Secondly, the plight of the people increased when there was a terrible famine in Bengal where a
huge population perished.
Thirdly, a major reason for the enactment of this Act was the severe financial crisis that arose in the
company by 1773 and the company had asked for a loan of one million pounds from the British
Government in the year 1772.
• Fourthly, the Company through earlier charter had only been given trading rights by the British
Parliament. But, slowly and slowly, as it started acquiring more and more territory it started acting
like a ruling body. And, there in England, the British Parliament couldn’t swallow this situation.
And, to put end to this tendency of company i.e. using the political powers in the name of trading
rights, the British Parliament thought it was necessary that these territories should be brought
under the control of Crown. At, that time there existed three presidencies of Bengal, Madras, and
Bombay in the country. But, all these three towns were independent of each other and there was
no centralized authority in India to control them. Thus, it became necessary to bring uniformity in
the administration of these three towns.
• Allegations of corruption and nepotism were rampant among the company officials.
• Lawlessness increased in Bengal.
• The defeat of the company against Mysore’s Hyder Ali in 1769.

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• These all circumstances forced the British government to pass the Regulating Act of 1773 in order
to regulate the affairs of British East India Company. And, accordingly, Lord North(Prime Minister
of England at that time) decided to revamp the affairs of the East India Company
with the Regulating Act. And, so in May 1773 Lord North presented a bill in the British
Parliament which when passed was known as ‘Regulating Act of 1773'. An interesting point to
note here is that by this act the, British Parliament only ‘regulated’ the affairs of the company but,
didn’t take all power completely to itself.
•

4 The Aim of the Act

The basic objectives administration System

• To improve the despotic state of affairs (situation) of the company
• To sort out the chaos created by the introduction of the system of dual government
• To bring anti-corruption practices via the medium of the act by prohibiting the servants of the
company, from engaging in any form of private trade and from accepting bribes, gifts, and
presents from the people
•

5 Major features of the Act

This was the first step taken by the British Parliament to interfere in the administration of the
company directly. Following are the key features:
Introduction of the office of the Governor-General of Bengal
The office of the Governor of Bengal was redesignated as the Office of the Governor of the
Presidency of Fort William, also known as Governor-General of Bengal. Lord Warren Hastings was
the first person to hold this designation.
Creation of Executive Council to Assist the Governor-General
Also, the Executive Council of four members was created to assist the Governor-General.
Governors of Bombay and Madras presidencies subordinate to the Governor-general of Bengal
The Governors of Bombay and Madras were made subordinate to the Governor General of Bengal,
thereby making the Governor General of Bengal as the ultimate authority.
•

6 Contd.
• Establishment of the Supreme Court of Judicature at Fort William
• In the year 1774, Supreme Court of Judicature at Fort William was established at Calcutta with one
Chief Justice and three other judges. The jurisdiction of this court extended to all areas lying
under the Bombay, Madras and Bengal Presidency. It was a Court of Record and its power
extended to try both Civil, Criminal cases (only over the British subjects not on natives) as well as
it had jurisdiction over admiralty cases. Judges were to come from England. The first Chief Justice
of the court was Sir Elijah Impey.
• Reforms to curb corruptions
• This act brought prohibition on the servants of the company from engaging in any private trade

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or accepting bribes and gift from the local people.

• The directors of the company were to be elected for a period of five years and one-fourth of them
used to retire every year. There was no procedure for re-election available.
•

7 Provisions of the Regulating Act

• This act permitted the company to retain its territorial possessions in India but sought to regulate
the activities and functioning of the company. It did not take over power completely, hence called
‘regulating’.
• The act provided for the appointment of a Governor-General along with four Councillors in the
Presidency of Fort William (Calcutta), jointly called the Governor-General in Council. As per
this, Warren Hastings was appointed as the Governor-General of the Presidency of Fort William.
• The Governors in Councils at Madras and Bombay were brought under the control of Bengal,
especially in matters of foreign policy. Now, they could not wage war against Indian states without
Bengal’s approval.
• The company directors were elected for a period of five years and one-fourth of them were to
retire every year. Also, they could not be re-elected.
• The company directors were directed to make public all correspondence on revenue, civil and
military matters with Indian authorities before the British authorities.
• A Supreme Court of Judicature was established at Calcutta with Sir Elijah Impey as the first Chief
Justice. Judges were to come from England. It had civil and criminal jurisdiction over the British
subjects and not Indian natives.
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8 The Contribution of the Act to Indian Legal History (Impacts)

• This enactment is considered to be a landmark enactment as it brought a lot of dynamic and

significant changes in the structure of judiciary in the country.
• The act brought some important changes in the Constitution of Court of Directors (COD)
• For the first time, the political and administrative functions of the company were recognized.
• This act also laid down the foundation of the Central Administration in the country.
• This act created for the first time the Supreme Court at Calcutta thereby, making a proper judicial
system and Judiciary got regulated to an extent and for the first time learned judges from England
were made part of the Supreme Court in India.
•

9 Drawbacks of the Act

Though the Act is considered to be a very significant one in the Indian legal history, still there was a
lacuna left behind as the Act failed to resolve the issues prevailing at that time in the legal system.
The major drawbacks of the Act are:
The situation was a paradoxical situation for the Governor-General had no veto power and the
Governor-General was made answerable to the Directors and was held responsible for all the acts
related to the administration in India. Moreover, the Governor-General had no free hand to give an
independent decision as he was bound by the decision of the majority decision of the council.
Because of this situation, the council used the Governor-General as the puppet to make their

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decision.
Though the Governors were subordinate to the GG but in actual practice ultimate power lays in the
hands of the Governor and his subordinates resulting in widespread corruption and weakening of
the administration at lower levels.
• There was a lot of confusion regarding the powers and jurisdiction of the Supreme Court.
Also, there was ambiguity between the jurisdiction of the Supreme Court and that of the Council
of the Governor-General.
•
• The parliamentary control that was sought in the activities of the company proved to be
ineffective as there was no mechanism to study the reports sent by the Governor-General in
Council.
•
• Also, the Act failed to address the concerns of the Indian natives who were the actual
sufferers and were also paying revenue to the company.

10 The Act of Settlement 1781

The Act of Settlement was an Amending Act of 1781, which was passed by British Parliament on 5th
July 1781 to remove the defects of the Regulating Act 1773. It is also known as Declaratory Act,
1781.

11 Circumstances that led to the passing of Act of Settlement

Though the Regulating Act of 1773, brought a great level of change both in the regulation of affairs
and judiciary, there were some significant loopholes which this Act failed to resolve. Basically to
remove the defects of the Regulating Act of 1773, the Act of Settlement 1781 was enacted.
Firstly, some serious issues with the administration of the Warren Hastings were there. The relevant
examples of such issues are Patna case, Cosijurah Case and particularly the Nand Kumar case where
(Nand Kumar was hanged). These all issues led to a lot of criticisms of administration of Warren
Hastings.
Secondly, there was a big tussle between the Supreme Court and Governor-General in Council
which disturbed the balance of administration to a great extent.
Also, there was interference in the personal laws of the communities which had agitated the
people.
Also, in the year 1777, a complaint was made by the directors of the Company against the Supreme
Court as for them it was difficult to run the administration. To address this complaint, the House of
Commons, appointed a committee known as Touchet Committee to a do an inquiry about the
administration of Bengal, Bihar, and Odisha.
The report of this committee led to the enactment of the Act of Settlement of 1781.
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12 The Aim of the Act

The main objectives of the enactment of this Act were :

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• To remove ambiguity regarding the few provisions of the Regulating Act and the Charter which
had created the division between the court and the government.
• To support the lawful government of Bengal, Bihar, and Orissa, so that revenue could be collected
smoothly.
• To maintain and protect the laws and customs of the native people.
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13 Key Provisions (features) of the Act

Change in the powers of the Supreme Court

• The servants of the Company which earlier came within the jurisdiction of the Supreme Court
were now exempted from the jurisdiction of the Supreme Court.
• By the enactment of this Act, the court’s geographical jurisdiction became limited to only Calcutta.
Non-interference in Revenue matters
• The court now had no jurisdiction in the revenue matters concerning revenue, or any act was
done in the collection thereof, the government now became independent of the control of the
court in the matter of revenue.
The Shift of Appellate Jurisdiction from Court to the Governor-General and Council
• The Appellate jurisdiction shifted in the hands of the Governor-General and Council. Now, the
appeals went from Provincial Courts to the Governor-General in council.
The Assertion on the application of the personal laws
• This act asserted that Mohammedan law should be applied on the Mohammedan cases and
similarly, the Hindu law must be applied to Hindu cases.
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14 Impact of the Act of the Settlement

The major impacts of this act were :

• The Act gave superior authority to the Council over the court and favored the Council.
• This Act made the position of the Council very strong so that it could continue to have a good
control over the Indian empire.
• It was the first attempt to separate the executive from the judiciary by defining the respective
areas of jurisdiction.
• Still, the Act failed to give a vibrant impact and to remove all the flaws of the Regulating Act of
1773.
•

15 Pitt’s India Act of 1784

• The Pitt’s India Act, 1784 also called the East India Company Act, 1784 was passed by the British
Parliament to correct the defects of the Regulating Act of 1773. This Act resulted in dual control of
British possessions in India by the British government and the Company with the final authority
resting with the government. This Act continued in effect until 1858.
• The Pitt’s India Act of 1784 was named after the then Prime Minister of Britain, William Pitt,
because the bill was introduced by the Prime Minister himself. This bill is quite significant as it
begins the process of the British government taking control over the territories occupied by the

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begins the process of the British government taking control over the territories occupied by the
East India Company in India.
• The Pitt’s India Act 1784 was passed almost 11 years later than that of the Regulating Act of 1773.
During this period, the East India Company occupied a huge part of India and was making a huge
amount of profits by exploiting Indian resources. This is the time when the British government felt
the need to take control of the Indian subcontinent and restrict the company’s monopoly over the
trade. This became the prime reason for the introduction of Pitt’s India Act 1784.

16 History of Pitt’s India Act 1784

The developments that lead to the formation of the Pitt’s India Act 1784:
• The British were aware of the wealth of the Indian sub-continent, and they had already witnessed
the profits made by the East India Company. Therefore, the British parliament decided to take
control of the East India Company slowly and steadily with an ambition to control the Indian
territories.
• The loopholes of the Regulating Act of 1773 have caused certain administrative failures, including
corruption in the company, lack of accountability and responsibility, mismanagement in the
company, clash of power, etc. Hence the British parliament introduced Pitt’s Act 1784, to upgrade
the Regulating Act of 1773 and remove the errors of the Act.
• The occurrence of the First Anglo-Maratha war (1775-1782) was also one of the reasons that
forced the British parliament to rethink the Company’s administrative and political powers. Pitt’s
India Act came into existence so that the company could realize the supremacy of the British
Parliament.
•

17 Provisions of the Act

• For political matters, the Board of Control was created and for commercial affairs, the Court of
Directors was appointed.
• The Board of Control took care of civil and military affairs. It comprised of 6 people:
• Secretary of State (Board President)
• Chancellor of the Exchequer
• Four Privy Councillors
• In this dual system of control, the Company was represented by the Court of Directors and the
British government by the Board of Control.
• The Act mandated that all civil and military officers disclose their property in India and Britain
within two months of their joining.
• The Governor-General’s council’s strength was reduced to three members. One of the three would
be the Commander-in-Chief of the British Crown’s army in India.
• The Presidencies of Madras and Bombay became subordinate to the Bengal Presidency. In effect,
Calcutta became the capital of the British possessions in India.
•

18 Features of the Act

• This Act made a distinction between the commercial and political activities of the East India
Company.
• For the first time, the term ‘British possessions in India’ was used.
• This Act gave the British government direct control over Indian administration.
• The Company became subordinate to the British government unlike as in the previous Regulating

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The Company became subordinate to the British government unlike as in the previous Regulating
Act of 1773, where the government only sought to ‘regulate’ matters and not take over.
• This Act established the British Crown’s authority in the civil and military administration of its
Indian territories. Commercial activities were still a monopoly of the Company.
•

19 Significance of Pitt’s India Act 1784

Two major changes were observed in the company’s constitution with the passage of Pitt’s India
Act. They were-
• The councils of Madras and Bombay were modified on the Bengal Council model.
• The executive council members were decreased to 3 while the Commander-in-chief of this
executive council was the Governor-General himself.
• A separate department, known as the Board of Control, was constituted in England in order to
control the policies of the Court of Directors.
• Introduction of dual government that is by the company as well as by the Parliament. This system
of government lasted till 1858.
•
20 Drawbacks of the Act
• The Act was deemed a failure because there was no clarity on the boundaries between the
company’s powers and the government’s authority.
• The Governor-General had to serve two masters i.e. East India Company and the British Crown
• There were no clear boundaries between the responsibilities of the Board of Control and the Court
of Directors of the company. The Governor-General had to take on the spot decisions exercising
his discretion.
•

21 Conclusion

These enactments brought many great changes to the system of administration and justice. The
Enactment of the Regulating Act of 1773 and the Act of Settlement were two major enactments in
the Indian Legal History.
It can thus be concluded that the Regulating Act of 1773 laid the foundation of the Central
Administration and Parliamentary Control. Then, later on, the Act of Settlement in the year 1781,
was enacted to remove the flaws of the earlier passed Act. And lastly the Pitt's India Act gave the
British government direct control over Indian administration.