REGULATING ACT OF 1773

REASONS FOR ENACT REGULATING ACT 1773

• The merchants of the East India Company had started private

trading and the company was put in loss whereas servants of the
company become rich.
• Due to corruption and mismanagement of the servants and there
was a terrible famine in Bengal, the company became poor.
• The East India Company was in severe financial crisis and
approached the British government for loan. The British
government realized that there was something wrong with the
company.
• The British government got opportunity to interfere into the
affairs of the government. As a result they passed an Regulating
Act in the year 1773.
OBJECT:
• To control and regulate the affairs of the East India Company.
• To bring the management of East India Company under the
control of British parliament or British Crown.
• To introduce reforms in the affairs of company in England as well
as in India.
• To remove the illegalities and mismanagement by the company’s
servant.
PROVISIONS OF REGULATING ACT
Constitution of Company:
• This Act introduced vital changes in the constitution of company
in England. For directors
1. elected for a period of 4 years, and
2. one-fourth of them were retired every year and
3. the retired directors are not re elected.
For proprietors, the voting rights are changed
4. Proprietors who holding shares of 1000 pounds were given right
to vote,
5. Those who had less than 1000 pounds are denied for vote.
6. Had 1000 pounds right to given 1 vote
7. 3000 pounds given 2 votes and 6000 pounds were given 3votes
and above 10,000 pounds given 4 votes.
• To bring the complete control over of company by Parliament ,
the directors were required to submit all correspondence

1. Civil and military military affairs with Indian authorities before

Secretary of state, and
2. all revenue affairs must be placed before Treasury in England.
COMPANY’S GOVERNMENT IN INDIA

EXECUTIVE GOVERNMENT: The status of Governor -in-council

was raised to Governor General-in-council and 4 councilors
were appointed. The Governor of Bengal was designated as
Governor General of Bengal.
The Act specifically stated that the names of the 1st Governor
General and 4 councillors. Warren Hasting who was Governor
of Bengal was appointed the First Governor General. Their
term of office for 5years but they could removed even before
from their term on the recommendation of Court of Directors.
• The presidency of Madras and Bombay were brought under the
control and supervision of Governor-General-in-Council in
matters of war and peace.
• The presidencies of Madras and Bombay could not make any
treaties of war and peace without the approval of Governor-
General-in-Council, in case of emergency situation until receive
order from Governor-General-in-Council, they can receive
special order from Court of Directors to commence war or
treaty.
LEGISLATIVE POWER: The Governor-General-in-Council were
empowered to make rules and regulations and issue ordinance for
the good governance of Company.
• Those rules must not be against the rules or laws of England.
• The rules and ordinances are registered before Supreme Court
after the expiration of 20 days from their open publication.
• Any person can file appeal against such rules and regulation to the
King-in-council within 60 days from their publication.
• The King-in-council have the power to disallow or disprove at any
time within 2years from the date passed by the Governor-General-
in-Council.
• It was necessary to send copies of such rules and regulation to
the Secretary of State in England.

JUDICIAL POWER: The Regulating Act empowered the British

Crown to establish by charter a Supreme Court of judicature
at Fort William in Calcutta.
• This Act also make provisions for the appointment of judges
and also for the jurisdiction of the court.