NAME : ANANTHU S

REG NO : HC21036
COURSE : B.B.A LLB[HONS]
CLASS : I YEAR A SECTION
SUBJECT : LEGAL AND CONSTITUTIONAL HISTORY
TOPIC : THE REGULATING ACT, 1773

STUDENT NAME FACULTY NAME

ANANTHU S Mrs.Vedhavalli

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 TABLE OF CONTENTS
S No TITLE Pg No

1. INTRODUCTION 3

2. HISTORY OR BACKGROUND OF REGULATING ACT 4

3. THE REGULATING ACT,1773 5

4. PROVISIONS OF REGULATING ACT 6-8

5. DRAWBACKS OF REGULATING ACT 9

6. THE SETTLEMENT ACT AND SIRCUMSTANCES LEAD TO IT 10

7. AIMS AND PROVISIONS OF SETTLEMENT ACT 11

8. THE IMPACT OF SETTLEMENT ACT 12

9. CONCLUSION 13

10. BIBLIOGRAPHY 14

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 INTRODUCTION

The English East India Company was primarily a commercial organisation. Following the
ideas of mercantilism, the firm needed political authority to ensure monopolistic profit, thus it
engaged in political actions that resulted in the acquisition of revenue-producing regions.
After 1757, it was in a unique position to wield political authority over a significant portion
of India's population. The authority in charge of the company was based in Britain, far from
India. This situation and friendship caused numerous complications for the British
government. The Company had grown into a vast empire that combined the functions of a
trader and a ruler. It was now evident that the Company held the power and control over the
Indian kingdom. After a 7-hour debate, the British government decided that it could no longer
be tolerated. The Regulating Act of 1773 was an act passed by the Parliament of Great
Britain along with the Crown for the process of managing ang controlling the rule of East
Indian Company in India. Even though the act was successful but in long term run it had
certain defects over the company’s affair. Therefore, the Pitts India Act was enacted in 1784
as a more radical reform. The enactment of this two marked the parliamentary control over
the company’s administration and the centralised administration in India. In 5 th July 1781 the
Settlement Act of 1781 was enacted to solve the defects in the Regulating Act. The main aim
of Settlement Act was to demarcate the relations between Supreme Court and Governor
General in Council.
The Enactment of the Regulating Act of 1773 and the Act of Settlement were two major
enactments in the Indian Legal History. The Regulating Act of 1773 was the first Act to bring
in major changes in the administration and justice. then, late on, the Act of Settlement in the
year 1781, was enacted to remove the flaws of the earlier passed Act.
The Regulating Act is considered as the start of constitutional development in India. The
Regulating Act marked the start of British crown starting to exercise its power in India until
then it was the large part of India was under the East India Company.
The British Parliament passed the Regulating Act of 1773 to oversee the East India
Company's territory, primarily in Bengal. This act was passed in response to the British East
India government's mismanagement, which resulted in the Company's insolvency, forcing the
government to intervene in the Company's business. The term ‘regulating' in the 'Regulating
Act, 1773' means nothing more than "supervising" the company's conduct. This oversight
was not limited to simply compiling reports; it also included intervening in company
problems and carrying out operations that benefited the British government. This resulted in
the company's political influence being stripped away, as well as particular actions to
establish a new administrative framework. As a result, all powers were transferred to the
British government. As a result, the primary goal of the Regulating Act was to maintain
control over the firm, which had evolved from a private enterprise to a semi-autonomous
state institution.

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 HISTORY OR BACKGROUND OF REGULATING ACT

On 31 December 1600 the East India Company came to India with the Charter given by
Queen Elizabeth to do business. On 1609 William Hockins came to India with the Charter to
India. At that time Jahangir was the Mughal empire at that time. Since, the Portuguese were
already in business with the Mughals the permission to do business were rejected to the
Britishers. In 1613 Sir Thomas Raw started a factory in Surat. Madras, Bombay and Calcutta
were the main area of East Indi Companies activities. At that the Madras was under the rule
of Raja of Chandragiri and Lord Francis Day bought Madras from Raja of Chandragiri at
1639 and build St George Port. At that time Prince Charles II married the Portuguese princess
Katherine and the Portuguese gifted him with Bombay, which he later leased to the East India
Company for 10 pounds a year. East India Company bought many villages in Calcutta and
build William Port there in 1698. While the East India Company was gaining a monopoly
business power in India there started to have the rift between Indians, Britishers and
Portuguese. In order to protect here factories, the East Indian Company bought in the British
Army. One of the most important wars fought by the army was the Carnatic War between
1746-1763. Three wars were fought between this timeline and the British emerged victorious.
This marked the end of French regime in India. The Battle of Plassey in 1757 Sir Robert
Clive defeated Nawab Siraj-Ul-Daulah and in the Battle of Buxar the British forces lead by
Hector Munro defeated the forces led by Mir Qasim Suja Ut Ulla. The victory in these two
wars resulted in the taking over of Bengal by Britishers. After the defeat in Battle of Buxar
the Mughal empire Shah Alam II was forced to sign the Treaty of Allahabad, which resulted
in the enabling of double government system. The administrative powers vested with the
nawabs but power to collect tax was given to Britishers. Sir Robert Clive was the commander
of British army during both the battles. After this in 1772 Warren Hasting was appointed as
the Governor General of Bengal. Warren Hasting found certain irregularities in the financial
status of East India Company that is the profit-making East India Company was financially
distraught. Warren Hasting reported this back to London and asked for a loan of 1million
pound. The parliament of Britain appointed a select committee to enquire about the affairs of
the company in the Indian subcontinent. The committee was appointed on July,1772. The
committee found out many irregularities in the financial status of the company as the
employees of the companies collected the wealth of the company and used it for personal use.
The committee suggested that a governing rule for East India Company should be made. So,
in order to regulate the rule of Britishers in India the Regulating Act of 1773 was drafted.
The Regulating Act of 1773 is considered s the basis of Indian Constitution.

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 THE REGULATING ACT OF INDIA 1773

The Regulating Act of 1773 was enacted by the British Parliament with the intent of
regulating and constraining the East India Company's power in India by serving as an
authoritative watchdog. The British East India Company's Indian holdings, primarily Bengal,
were regulated by this act, which was passed by the British Parliament.

It was the British government's first interference in the company's territorial affairs, and it
signalled the start of a takeover process that would last until 1858. In 1773, Lord North's
government passed the Act. It was created to eliminate the flaws in the Company's
constitution and provide an ordered and effective government to the Company's Indian
possessions. Lord North proposed the bill for this measure on May 18, 1773. As a result, it's
also known as Lord North's Bill. Lord North highlighted the importance of establishing a
firm, clear, and resolute foundation for the Company's business. The Bill was met with great
opposition from various sectors, but it was eventually passed and given the name The
Regulating Act of 1773.

The Regulating Act was a lengthy piece of legislation. It restructured and reframed the
Company's constitution as it stood in London, as well as making significant modifications to
the administration of the Company's Indian possessions. The Regulating Act was prompted
by the company's mismanagement of its Bengal estates, which had been brought to a head by
the fear of bankruptcy and a need for a government loan. The Act, on the other hand, failed to
prevent corruption, which was endemic among practically all officials, from the Governor
General at the top to the lowest district officials. The Regulating Act was passed on June 10,
1773, in the British House of Commons in reaction to the East India Company's acute
financial crisis and public humiliation. In general, the British Regulating Act can be viewed
as the British government's earliest acceptance of control over the Indian Subcontinent.

There was another cause for the implementation of Regulating Act the educated people in
Britain started asking for the control of Indian state over the political activities of the English
East India Company1.

The main goals of enforcing the Regulating Act of 1773.The East India Company's affairs
must be controlled and regulated. To take the Trading Company's political influence away
from them. Recognize the Company's political and administrative clout and to implement
new administrative changes that would result in the establishment of a central administration
system. To enhance the company's dictatorial state of affairs (position). To restore order
following the implementation of the dual-government system and to use the legislation to
promote anti-corruption policies by preventing company servants from engaging in any sort
of private commerce and from collecting bribes, gifts, and presents from the public2.

PROVISIONS OF REGULATING ACT,1773

1
V.D.Mahajan, Modern Indian History, Pg No 294(S.Chand Publishing, Delhi,2012)
2
https://blog.ipleaders.in/regulating-act-1773/ Visited on 01/01/2022 at 17:15pm

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1. ELECTION OF DIRECTORS
Instead of being elected for one year, the company's directors were elected for five
years. Every year, one-fourth of them retired, and the retiring Directors were not
eligible to be re-elected. This was done to ensure continuity in the management of the
company's business while also reinforcing the directors' position at the mercy of the
shareholders, who might thus have a say at any time.
To prevent the corporation's servants from buying power, shareholders' voting rights
were limited to those who owned shares worth 1000 Pounds or more in the company.
Small shareholders were thus stripped of their voting rights in the hopes of enhancing
the quality of shareholders and, as a result, the quality of the company.

2. CONTROL OVER CORRESPONDANCE

To maintain parliament's authority over the corporation, the directors were compelled
to file all civil military correspondence with the Indian government with the Secretary
of State on a regular basis. All correspondence relating to India's revenues had to be
filed with the Treasury in England. As a result, administrators had to preserve a sense
of accountability, transparency, and responsibility.

3. APPOINTMENT OF GOVERNOR GENERAL AND THE COUNCIL

Calcutta's government was restructured as a result of the Act. It named a Governor
General and a four-member Council of State, entrusting them with "the entire civil
and military governance" of the Calcutta Presidency. The first Governor-General,
Warren Hastings, was appointed. The council meeting's decisions were to be decided
by a majority of votes. In the event of a tie in the Council, the Governor-General had
only one vote and a casting vote. He lacked the capacity to override the Council's
majority, which could effectively kill any of his policies, implying that he lacked a
veto. Under the Cornwallis revisions, the system of one vote and no overriding
authority was changed.

4. BOMBAY AND MADRAS UNDER THE CONTROL OF GOVERNOR GENERAL

While exercising their ability to make war and peace, the Governor General in
Council was given management, supervision, and oversight of the presidencies of
Bombay and Madras. The Governor General and the Council were required to keep
the Court of Directors fully informed of all their operations impacting the company's
interests, as well as to operate in complete obedience, allegiance, and loyalty to the
Court of Directors' commands and instructions.

5. REFORMS TO CURB CORRUPTION

To combat corruption, the Act barred company servants from engaging in any private
trade or receiving gifts or bribes from natives.

6. ESTABLISHMENT OF SUPREME COURT AT CALCUTTA

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 The formation of the Supreme Court in Calcutta under SECTION 13 of the
Regulating Act was a significant innovation. The Royal Charter established the
Supreme Court in Calcutta. On March 26, 1774, King George III issued the charter
that established the Supreme Court. It was a court of the king. Justices of Peace were
appointed by the Governor General, members of the Council, and Supreme Court
judges, and they were given the authority to hold Quarter Sessions for the
administration of criminal justice.

The first Chief Justice of the Supreme Court of Calcutta was Sir Elijah Impey. With
more elaborate apparatus, it replaced the former Mayor's Court. A Chief Justice and
three puisne justices were nominated by the King from among barristers with at least
five years' experience. These judges had the same authority as the English King's
Bench. Commercial pursuits and receiving gifts, both of which were widespread
among company servants at the period, were strictly prohibited. The Court had the
authority to hear civil, criminal, and admiralty cases, and it had to be a Court of
Record, with the ability to hear both civil and criminal cases. It was given supreme
authority over all British subjects, including Bengal, Bihar, and Orissa provinces. It
included majesty's servants, corporation servants, and others. The Supreme Court was
not entitled to hear matters involving the Governor General and Council, with the
exception of felony or treason charges. The Supreme Court was also ordered to take
into account and respect Indian religious and societal practises. Appeals from
provincial courts might be made to the Governor-General-in-Council, who would then
appeal to the King-in-Council. The Governor General and Council were given the
authority to enact laws and rules, but only on the condition that they be registered in
the Supreme Court and that they not become effective until they were registered and
published in the Supreme Court. Any Indian citizen had the right to appeal such rules
to the King's council within sixty days, which then overturned or altered the law. The
appeal had to be filed in the Calcutta Supreme Court within a certain time frame. All
of the Governor General's rules had to be sent to a secretary of state in England. Suo
moto power was given to the King in Council to change or disallow any law.
Consequently, the law was considered by the Supreme Court before it became law.

7. WRITS
A writ is a formal written order issued by an administrative or judicial body in
common law; it is generally described as a formal order issued by a government entity
in the name of sovereign power. The Regulating Act of 1773, which established the
Supreme Court in Calcutta, introduced writs in India. The charter also established
High Courts, which had similar powers to the Supreme Court in terms of issuing
writs. Both courts' writ authority was confined to their original civil jurisdiction,
which they had under the Specific Relief Act of 1877. While drafting the Indian
constitution, the Constituent Assembly adopted a feature of the British judicial system
and specified it in Article 32 and Article 226 under the heading of constitutional
remedies. The purpose of including the writ in our Constitution is to ensure that all
people and citizens of the country have access to fundamental rights. The Supreme
Court and the High Courts retain the power to issue writs. The Regulating Act's
legacy was carried on by the constitution framers through Article 226 and 32, as well

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 as the writ jurisdiction of habeas corpus, mandamus, certiorari, prohibition, and quo-
warranto. Our judicial system mandates that the rule of law reigns supreme in the
country, and that no one is above the law, whether it be the government or its organs;
everyone must answer to the judiciary, demonstrating that our judicial system is free
of outside pressures.3

3
https://www.lawqedu.com/regulating-act-1773-saharshrarchi-pandey/ visited on 01/05/2022 at 20:00pm

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 DRAWBACKS OF REGULATING ACT

Despite the fact that the act is regarded as a watershed moment in Indian legal
history, it left a gap because it did not address the concerns that existed at the time in
the legal system. The Act's major flaws are outlined below.

1. The situation was contradictory because the Governor-General had no veto authority
and was held accountable to the Directors for all acts relating to Indian administration.
However, the Governor-General lacked the authority to make an independent
judgement because he was bound by the council's majority decision. Because of this,
the council decided to make its choice using the Governor-General as a puppet.

2. Though the Governors were nominally subordinate to the GG, this approach resulted
in the Governor and his subordinates wielding ultimate power, resulting in rampant
corruption and a weakening of the government at the lower levels.

3. There was a lot of misunderstanding about the Supreme Court's powers and
jurisdiction. There was also a conflict between the Supreme Court's and the Governor-
jurisdictions. General's Council's

4. Furthermore, the Act did not address the concerns of the Indian locals, who were the
ones who suffered the most.

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 SETTLEMENT ACT AND THE CIRCUMSTANCES LEADING TO IT

The Act of Settlement was a 1781 Amending Act passed by British Parliament on July 5,
1781, to correct the flaws in the Regulating Act of 1773. Declaratory Act of 1781 is another
name for it.
The circumstances leading to its enactment are as follow:
1. Despite the fact that the Regulating Act of 1773 resulted in considerable changes in
both the regulation of affairs and the court, there were certain notable flaws that this
act failed to address. The Act of Settlement 1781 was enacted primarily to correct the
flaws in the Regulating Act of 1773.

2. To begin with, there were severe problems with Warren Hastings' administration. The
Patna case, the Cosijurah case, and, in particular, the Nand Kumar case are
noteworthy examples of such concerns (Nand Kumar was hanged). All of these
concerns have resulted in several criticisms of Warren Hastings' administration.

3. Second, there was a major squabble between the Supreme Court and the Governor-
General in Council, which significantly disrupted the administration's equilibrium.

4. In addition, there was interference in community personal laws, which irritated the
people.

The company's directors also filed a lawsuit against the Supreme Court in 1777,
claiming that running the administration was difficult for them. To investigate this
accusation, the House of Commons established the Touchet Committee to investigate
the administration of Bengal, Bihar, and Odisha.

The Act of Settlement of 1781 was enacted as a result of this committee's

recommendation.

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 THE AIM AND PROVISIONS OF SETTLEMENT ACT

The main objectives of the enactment of this Act were:

1. To clarify the few elements of the Regulating Act and the Charter that had produced a
schism between the courts and the government.

2. To assist the legitimate governments of Bengal, Bihar, and Orissa in collecting tax in
a timely and efficient manner.

3. The local people's laws and customs must be preserved and protected.

The key provisions of the act are as follows:

1. CHANGE IN THE POWERS OF SUPREME COURT

The company's servants, who had previously been subject to the Supreme Court's
jurisdiction, were suddenly excused.

The court's territorial jurisdiction was limited to Calcutta after this Act was passed.

2. NON-INTERFERANCE IN REVENUE MATTER

The court no longer had jurisdiction over revenue matters, or any actions taken in the
collection of revenue; the government was now free of the court's oversight in the
matter of revenue.

3. THE SHIFT OF APPELLATE JURISDICTION FROM COURT TO THE

GOVERNOR-GENERAL AND COUNCIL

The Governor-General and Council now have appellate jurisdiction. Appeals were
now sent to the Governor-General in Council from Provincial Courts.

4. THE ASERTION ON THE APPLICATION ON PERSONAL LAWS

According to this statute, Mohammedan law should be applied to Mohammedan
cases, while Hindu law should be applied to Hindu cases.

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 THE IMPACT OF SETTLEMENT ACT

This act had the following important consequences:

The act granted the council more power than the court and benefited the council.
This legislation strengthened the council's position, allowing it to maintain effective
control over the Indian empire.
It was the first attempt to define the respective boundaries of jurisdiction between the
government and the judiciary.

Despite this, the Act failed to have a strong influence and to correct all of the defects
in the 1773 Regulating Act.

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 CONCLUSION

In India's constitutional history, the Regulating Act of 1773 is very significant. For the
first time in India, a written constitution for business governance was introduced by
this statute. This Act marked the beginning of British parliamentary oversight of the
Company's administration in India. As a result, the management of the Company's
ruled territories was no longer a private matter for the Company's merchants. The
introduction of these laws resulted in numerous significant changes to the
administration and justice systems. It is also possible to assume that the Regulating
Act of 1773 established the Central Administration and Parliamentary Control.
However, there were some flaws in both acts that must be overlooked. "What era was
it, were we ransacked or surrendered to be robbed?" is still a question. Why couldn't
we perceive the corporation as a pest to our Indian roots? In the name of trade, the
firm exploited Indian labour and took unfair advantage of the impoverished.

Now that we are independent, Article 19 of the Indian Constitution grants us the
freedom to free trade and commerce. India is presently a democratic and independent
nation. Even though these laws and acts were made by the Britishers to control and
establish their power in India it also helped Indians during the drafting of the Indian
Constitution. The enactment of these laws marked the beginning of constitutional
development in India.

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 BIBLIOGRAPHY
1. V.D.Mahajan, Modern Indian History, Pg No 294(S.Chand Publishing, Delhi,2012)
2. https://blog.ipleaders.in/regulating-act-1773/ Visited on 01/01/2022 at 17:15pm
3. https://www.lawqedu.com/regulating-act-1773-saharshrarchi-pandey/ visited on 01/05/2022 at
20:00pm

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