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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 Dr. Jimmy Singh Kushwaha
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.
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 Companys Indian
territories, mainly in Bengal. It was the first intervention by the British government in
the companys territorial affairs and marked the beginning of a takeover process that
was completed in 1858.it was passed by Lord Norths Government in 1773. It was
designed to remove the evils inherent in the Companys 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 Norths
Bill. Lord North emphasized the need of placing the Companys 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 Companys
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 companys 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
Companys 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 companys government in India.
3. To provide remedies against illegalities of companys servants.
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 GB400,000
(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.
Companys defeats in 1769 at the hands of Haider Ali of Mysore.
Terrible famine in Bangal which took heavy toll of its population.

2
http://www.indhistory.com/regulating-act.html
The company applied for a loan of one Million Pounds in 1772.
Provisions of the Act

The Regulating Act reformed the Companys 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 Parliaments 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 Majestys
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 Majestys 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 Companys
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 Pitts India Act of 1784.
Bibliography

1. http://www.indhistory.com/regulating-act.html

2. http://www.indianetzone.com/14/regulating_act_1773.htm

3. http://realityviews.blogspot.in/2010/04/part-10-indian-legal-history-regulating.html

4. http://www.britannica.com/EBchecked/topic/496238/Regulating-Act

5. V.D. Kulshrestha, Landmarks in Indian Legal and Constitutional History 8th


edition in 2005

6. Wolpert, Stanley (2009). A New History of India (8th ed.)