Project Work On

THE REGULATING ACT OF 1773

SUBMITTED TO: Ms Priyadarshani
(Faculty of Legal History)

Submitted By:
Gaurav Prakash
Roll No.-1020
2nd Semester
 ACKNOWLEDGEMENT

Writing a project is one of the most significant academic challenges I have ever
faced. Though this project has been presented by me but there are many people
who remained in veil, who gave their all support and helped me to complete this
project.
First of all I am very grateful to my subject teacher Ms. Priyadarshani without the
kind support of whom and help the completion of the project was a herculean task
for me. He donated his valuable time from her busy time to help me to complete
this project and suggested me from where and how to collect data.
I am very thankful to the librarian who provided me several books on this topic
which proved beneficial in completing this project.
I acknowledge my friends who gave their valuable and meticulous advice which
was very useful and could not be ignored in writing the project. I want to convey a
most sincere thanks to seniors for helping me throughout the project.

Gaurav Prakash
Roll No. 1020
2nd semester
 Table of Contents

Chapter-(1)
Introduction .............................................................................................................
Objective..................................................................................................................
Hypothesis ...............................................................................................................
Methodolgy .............................................................................................................

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

Chapter-(3)
Provisions of Regulating Act.....................................................................................

Chapter-(4)
Supreme Court Of Judicature ...................................................................................

Chapter-(5)
Case Law ..................................................................................................................

Chapter-(6)
Conclusion ...............................................................................................................

Bibliography .............................................................................................................
 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. 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 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.

1
http://www.britannica.com/EBchecked/topic/496238/Regulating-Act
 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.
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.
 Reasons behind 1773 Act

By 1773, the East India Company was in dire financial straits.2 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 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.

2
http://www.indhistory.com/regulating-act.html
 Provisions of the Act

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.3 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.

(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.

3
Lucy S. Sutherland, “The East India Company in 18th Century Politics” Page No-147
(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.4

(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.

4
Penderel Moon, “Warren Hastings and British India” Page No-92
 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 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’s
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. 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)

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 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 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 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 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

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.)