An Assignment

On

“The Regulating Act 1773”

Assignment submitted

In Partial fulfillment of odd semester interval evaluation

ICFAI LAW SCHOOL

ICFAI University Dehradun

Academic Session 2019-20

Submitted by: Submitted to:

Name: Prakhar Gupta Mr.PrashantChauhan
Course: BBA-LLB Sec B (1st Year) (Faculty In-Charge)
Enrolment No: 19FLICDDN01090
Table of Contents

Introduction 2

Reasons behind 1773 Act 2- 3

Provisions of the Act 4-5

Supreme Court of Judicature 6-7

Case law

 Nanda Kumar Case (A Judicial murder) 8-9

 Patna Case (1777-1779) 9

Conclusion 10

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 ACKNOWLEDGEMENT

At the very outset, I would like to thank all those who were the
‘guiding lights’ behind this project. First of all I would like to
take this opportunity with esteem privilege to express my
heartfelt thanks and gratitude to my professor Mr. Prashant Chauhan Sir.

Prakhar Gupta
BBA LLB SEC B
(1st Year)
Roll No: 1090
 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. 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.
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

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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:-

 Reform the constitution of the company.

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

Reasons behind 1773 Act

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

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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 Bengal which took heavy toll of its population.
 The company applied for a loan of one Million Pounds in 1772.

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. 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.

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 (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.

(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.

(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 illegal practice
and corruption of the company officials.

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 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

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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.

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 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.

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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. Bahadur 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 was
no written agreement between the parties to submit the case to the Supreme Court for a
decision.

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 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
practiced 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.

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