Causes of the Regulating Act 1773

CAUSES OF THE REGULATING ACT 1773: ??? Constitutional anomaly arising due to the system of dual government
With the acquisition of the territories in Bengal the Company??™s position has been altered and it is no longer remained a mere trading organization but emerged as a territorial power. It had succeeded in establishing a de facto government in Bengal, Bihar and Orissa. But the emergence of the company from a trading body to a territorial power placed it in a peculiar position from the constitutional standpoint. According to English law, no British subjects could possess territory except in the name of the Crown. It therefore followed that either the territorial acquisitions by the company in India were to be taken possessions of by the crown or the company would left to be free with its powers and privileges and powers. Both these options did not seem feasible, firstly because it involved the risk of antagonizing the other European nations and secondly, the company??™s misrule in India was likely to tarnish the name of British Empire.

??? Abuse of privileges by the Company??™s servants??“
As a result of the battles of Plassey (1757) and Buxar (1764), the Company acquired the Diwani and the Nizamat, thus establishing its military supremacy in the regions of Bengal, Bihar and Orissa. The area was gripped with anarchy and confusion, and the company??™s servants were given to their obsession for wealth. Corruption was widespread among them, and they exploited the people in order to amass huge fortunes for themselves so that they could return quickly to England. When they went back to Britain they dabbled in politics, and with their ill-gotten wealth they purchased seats in the House of Commons. This vulgar display of wealth earned them the nickname of ???Nabobs??™. They also bought stock in the Company, seeking to influence its policies.


??? The Company??™s political ambitions??“
The British politicians realized that the Company??™s interests in India were no longer merely commercial, and that it had assumed the character of a political and territorial power. It was being increasingly realized that the Company should not be left alone outside the sphere of Parliamentary control, especially as the Company servants specialized in commerce and had no training or experience in handling political and legal situations at all. The mess they made in Bengal and the surrounding region was living proof of this fact. Public opinion in England was thus crystallizing in favor of Parliamentary intervention in the Company??™s affairs.


. Apprehensions about the Company??™s financial position??“

While the Company??™s servants were getting richer, the Company itself was falling into financial embarrassments. The directors of the company voted increased dividends to shareholders, but to meet the rising demand for Company shares, the Company had to approach the British Parliament for a loan. The Company was already bound to pay the British Exchequer an annual tribute of ?400,000 as ??™share in the Indian spoil??™. The news of the Bengal famine and other things had already reached the Parliament, and granting this loan to the Company without first probing into the causes for its dismal state of affairs was impossible.


Condemnatory reports by appointed committees??“

The House of Commons appointed a Select Committee and a Secret Committee to study and report the deficiencies in the Company??™s management of the Indian Territory. The reports were condemnatory in every way, and it became exceedingly clear that the Company could no longer function as an independent body, but must be subordinated to the Parliament.


Consequently, the British Parliament enacted the Regulating Act of 1773. By this Act the constitution of the Company was modified, and it was to some extent subjected to the control of the British Government and Parliament. The government at Calcutta was reorganized, and a Supreme Court was set up at Calcutta. The Regulating Act was the first instance of Parliamentary intervention in the Company??™s affairs, and henceforth Parliamentary Acts replaced the Royal Charters. The Regulating Act, 1773 suffered from various defects, but even as it sought to remove the evils of the Company??™s rule, it proved to be a landmark achievement in the Constitutional history of India.


OBJECTIVES OF THE ACT 1. To bring the management of the company under the control of British parliament and British crown. 2. To introduce reforms in the company??™s constitution at home, ie in England 3. To bring about reformation of the company??™s government in India and


To provide adequate remedies against the atrocities and oppressions committed by the servants of the company in India.


Change in the constitution of the company:

The first measure taken under the act was to change the method of appointment and retirement of the directors of the company in England with a view to tighten up its control over the affairs of the company in India. Hitherto twenty ??“ four directors were elected annually by the general court of shareholders of the company. But under the regulating act , their tenure was to last for four years and one ??“ fourth ie six of them were to be retire every year by rotation . The voting power was restricted only to those shareholders who had a stock of 1000 pounds instead of 500 pounds These changes were intended to improve the quality of the general court of shareholders and confers stability to the board of directors of the company by raising their tenure from one to four years.

Reorganization of the company??™s government of Bengal:


The regulating act introduced certain changes in the organization and powers of the government of presidencies of Calcutta and Diwani provinces of Bengal, Bihar and Orissa. After the battle of Plassey in 1756 , Calcutta was regarded as British settlement and the sovereignty vested with th British crown . But as rightly observed by Prof. M.P Jain ??? the Mofussil areas of Bengal , Bihar and Orissa had not yet became British territories as the company , though de facto supreme was de jure Diwan???. Therefore unlike the inhabitants of Calcutta, who were treated as British subjects, the inhabitants of the territory of Bengal, Bihar and Orissa were regarded as the subjects of Moghul emperor and not of the British crown. The regulating act provide for the appointment of a governor-general and four counselors for the civil and military government of the presidency of Calcutta. They were also to manage and govern the Diwani province of Bengal Bihar and Orissa. Thus the governor of Bengal was designated as governor-general of Bengal .for a period of the governor general and members of Council were to be appointed for a period of five years but they could not be removed earlier by British crown. A casual vacancy in the office of the governor general was to be filled by the company with the consent of the British crown. The regulating act provided that the presidencies of Bombay and madras were to be held under the control of the governor ??“ general and Council at Calcutta in matters of war, treaties and peace1. However there were two exceptions when the presidencies of Bombay and madras could commence war or make treaty of peace without the consent and approval of the governor-general and council of Calcutta .They were (i) in case of imminent necessity (ii) having received special orders from the court of directors in this regard. The subordinate presidencies of Bombay and madras were to transmit regularly the information on all matters relating to government, revenues or interest of the company to the governor ??“general and council. The governor-general and council, on their part , were required to transmit the information regarding there activities affecting the interests of the company to the court of director in England. Legislative Authority:


Prior to the enactment of the regulating act of 1773, the governor and council of the presidencies framed laws but they would be effective only after the approval of the company??™ court of directors in England. The regulating act authorized the supreme council and the governor general in council to make rules and regulations and issue ordinances for the good government of the presidency of fort William Calcutta and factories subordinate thereto the rule, regulations and ordinances so framed, were not to be repugnant to the laws of England. They were to be effective only after being published and registered with Supreme Court of judicature at Calcutta with its consent and approbation. Any person in India could file an appeal against such law in the king-in ??“ council within 60 days of there registration in the Supreme Court. Likewise any person in England could also appeal against them to the king-in ??“council within 60 days of their publication in England. The king-in-council either at their own motion or on appeal could disapprove or disallow any of such laws within a period of two years from the date of their passage in India. The copies of the rules, regulations and ordinances were to be send by the company to the secretary of state in England. There were two chief merits of there legislative scheme: (i) (ii) It eliminated a necessary delay involved in securing the consent of the company??™s directors in England. It worked as an effective check on the hasty legislations of the governorgeneral and council. Prohibition against private trade and accepting of presents etc:

Section 23 of the regulating act of 1773 , provided that governor-general , the members of council and judges of the supreme court were prohibited from accepting presents, gifts and rewards or engaging themselves in private trade .No person holding any civil or military office under the crown could accept any present or award. The offences or crimes and misdemeanor committed by the governor general ,members of the council or governor of presidencies of Bombay and madras, any judge of the supreme court against

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any of his majesty??™s subjects or any inhabitant of India could be tried and punished by the court of the king in council in England. Establishment of Supreme Court of judicature at Calcutta With the enactment of the regulating act, 1773, the provisions of the earlier charter of 1753 were superseded and the act empowered the crown of establish a supreme court at Fort William. King George III issued a charter on March 26, 1774, which established a supreme court of Calcutta. It was a crown??™s court. The court of request were however, allowed to continue. The governor general, members of the council and the judges of the Supreme Court were appointed as justices of Peace and were empowered to hold Quarter session for administering criminal justice. Sir Elijah Impey was appointed as the first chief justice of Supreme Court at Calcutta. It took the place of the former Mayors Court with more elaborate machinery. The Court was constituted of a Chief Justice and three pusne judges appointed by the King from barristers of at least five years experience. The authority of these judges was like those of Kings Bench in England. The admission of attorneys and advocates into the Supreme Court lay in their hands. The salary of the Chief Justice was fixed at 8000 sterling a year, and of three pusne judges 6000 sterling each. Engaging in commercial pursuits and receiving presents, which were common practices among the company servants of the time, were strictly forbidden. It had the functions of a Court of Equity according to the rules of the English High Court of Chancery. It was also a Court of Oyer and Terminer and Gaol Delivery for Calcutta and subordinate factories. As a superior court it had the jurisdiction to superintend the Court of Requests and the Court of Quarter Sessions and the magistrates of the courts. The Supreme Court was also a Court of Admiralty for Bengal, Bihar and Orissa and authorized to punish treason, murders, piracies, etc committed on the high seas within its jurisdiction. The court had jurisdiction over all British subjects resident in Bengal, Bihar and Orissa. But the Regulating Act and Royal Charter defined the jurisdiction of the court in vague terms.


ROLE OF THE REGULATING ACT , 1773 IN DEVELOPMENT OF JUDICIAL SYSTEM OF INDIA The constitutional significance of this act lay in the fact that it not only recognized the company as a political body controlling considerable territorial domain and discharging political and military functions attached to it, but also established the right of British parliament to regulate the affairs of the company and shape its political destiny by altering its form of government in India. Thus instead of the British king, the parliament assumed the trusteeship of British administration in India notwithstanding the continuous recognition of Mughal sovereignty. The act, however, did not touch the proprietary rights of the company and left Diwani intact with it. The act recognized the existence of the British sovereign over Indian settlements and the territories won by war, but not apparently beyond.The act recognized the authority of the company to make war and to negotiate treaties with the native powers in India. Thus the system of administration setup by the act of 1773 embodied the first attempt at giving some definite and recognizable form the vague and arbitrary ruler ship that had developed upon the company. From that date onwards this outline of Anglo-Indian government was readily filled in. It is, however, to be noted that thought the act put an end to the dualism which divided the governmental authority between the company and the nawab but within the company??™s system the dualism still continued . Parliament sovereignty was asserted by the act but there was no specific agency which could exercise this power. This dualism was distinct in the Governor-General in council at Fort William and also in the legal system.


The objectives underlying the regulating act, 1773 were admirable indeed. Lord North claimed the every clause of the act was framed with a view to improving the affairs of the company and removing the abuses in the company??™s administration in order to keep the company??™s administrators away from temptation their salaries were liberal and they were prohibited from receiving presents or rewards etc. the act also sought to bring about proper coordination in the working of the governments of presidencies by unifying them under a common central government at Calcutta. Chatham called the act as ???an attempt towards the reformation???.The regulating act 1773 introduced significant changes in the constitution and functioning of the company??™s executive government in India and restructuring the judicial administration in the territories of Bengal, Bihar and Orissa by establishing a supreme court of judicature. The constitution of the company was changed at England and in India so as to strengthen the position of the directors of the company by extending their tenure from one to four years. The Supreme Court at Calcutta was made the central executive authority with the power of civil and military government within the British possessions in India including the presidencies of madras and Bombay with a view to establishing a strong central government, the presidencies of madras and Bombay were subordinated to the governor-general and council at Calcutta in matters of making war and peace. This act has tightened the control of British parliament over the company, the Act made it obligatory for the company to place before the secretary of the state regularly the all its correspondence with the Indian authorities regarding civil and military matters of government of India. The act had conferred legislative powers to the supreme council at Calcutta and to put a check on arbitrary legislation by the governorgeneral and council the rules, regulations and ordinances framed by it and had to be registered by supreme court n needed latter??™s approval. This act also had conferred wide jurisdiction to Supreme Court than the earlier mayor??™s court. It exercised civil, criminal, admiralty, ecclesiastical and equity jurisdiction. It also had writ jurisdiction i.e., it could issue writs to lower courts. This act, imposed prohibitions on its officials and servants on accepting gifts, rewards , donations , and presents from princes of native powers with a view to removing corruptions and give clean administration to the inhabitants of Bengal, Orissa and Bihar.