Introduction
The regulating Act of 1773 was passed by the British Parliament to control the territories of the East India Company majorly in Bengal. This act was passed due to the misgovernment by the British East India government that introduced a situation of bankruptcy and the government had to interfere with the affairs of the Company. The act intended to overhaul the management of the East India Company’s rule in India.
Reasons that led to the passing of Regulating Act, 1773
After the battle of Plassey the company became a political power in this country. Its administration was, however, still in the hand of the men of commerce and naturally they were interested more in making money for themselves instead of providing a good administration to the people coming under their jurisdiction. Thus, after the battle of Plassey and acquisition of Diwani, by the company Bengal, Bihar and Orissa were in the grip of confusion, chaos and anarcity. The company’s servants were
exploiting the people and collecting money. In England they used to lead a life completely out of harmony with the prevailing social morals. Along with this the news of famine in Bengal led the British public to suspect that something was wrong with the company’s affairs in Bengal.
Now the British politicians began to realise that company is not now only a commercial body, but a territorial and political power in India. Therefore, it was thought that there should be some control of parliament over the affairs of the Company. A Select Committee and a Secret Committee were appointed by the House of the Commons to inquire about the affairs of the company. These committees found defects and deficiencies in the existing structure of the company. These reports drove home the conviction that the independence of the company must yield to the supremacy of 1773 to remove the defects prevailing in the existing system.
Provisions of Regulating Act, 1773
The Main provisions of the Regulating Act were as follows –
1. Amendment of the Company’s Constitution – By this Act the constitution of company was changed. Two changes were brought. First, the terms of the Directors was increased from one year to four years, and provisions were made for election of one forth of the directors every year in rotation. It was done to secure continuity in the direction of the company’s affairs, and to strengthening the position of Directors in comparison of shareholders. It was expected that continuity will bring efficiency. Another change was made in the voting system of the company Company’s ex-servicemen’s voting power of the shareholders was restricted to those who held stock worth € 1,000 or more. Small shareholders were thus deprived of their voting rights in the hope that it could improve the quality of shareholders and accordingly of Directors.
2. Control of British Government over Company – The Regulating Act tightened the control of British Government over the affairs of company, Directors of the company were required to lay before the treasury all correspondence from India relating to revenue and before a secretary of state every thing relating to civil and military matters of Government of India,
3. Reorganization of the Government of Calcutta – By this Act Calcutta government was reorganised, A Governor-General and a Council of four were appointed and whole civil and military Government of Calcutta was vested in them. Warren Hastings was appointed as first Governor-General. Three out of four members of council were sent from England, having no vested interests in India. All these persons were to hold office for five years. They could be removed earlier by the King on the recommendation of the court of Directors, Decisions of the council were taken by majority, Governor General had casting vote in case of a tie in the council. He had no power to override the majority power. In 1786, when Lord Cornwallis was appointed as Governor General of India and thereafter the Governor General got the power to override the council in case of necessity.
4. Madras and Bombay put under superintendence of Calcutta Presidency – The Act put Madras and Bombay under superintendence and control of Calcutta Presidency. There were two exceptions, i.e., the subordinate Presidencies could commence war and negotiate peace without consultation of Calcutta Government if there was imminent necessity, Subordinate Presidencies were required to transmit regularly to the Governor-General all information regarding government, revenue,
or other interests of the company. It was the first step towards centralization of administration in India.
5. Creation of Supreme Court at Calcutta – S. 13 of the Act provided for the establishment of Supreme Court at Calcutta superseding the judicial system prevalent under the Charter of 1753. The court was to be established under a Royal Charter. The Act specified lines on which this charter was to be based. The court was to consist of a chief justice and three puisne judges to be appointed by the crown and holding office during its pleasure. Only a barrister of at least five years standing could be appointed as a judge.
It must be noted that Supreme Court was to be a court of record. It was to enjoy all civil, criminal, admiralty and ecclesiastical jurisdiction. In criminal cases the court was to act as a court of Oyer and Terminer and Goal Delivery for the town of Calcutta and subordinate factories. It could use Grand and Petty jury consisting of British subjects residing at Calcutta. Court’s jurisdiction extended only to British subjects, and His Majesty’s subjects residing in Bengal, Bihar and Orissa; persons employed directly or indirectly in the service of the company or any of his Majesty’s subject. In a dispute over Rs. 500 an inhabitant of Bengal, Bihar and Orissa could voluntarily assume the court’s jurisdiction.
Court’s jurisdiction did not extend to the Governor-General and Council for any offence committed in Bengal, Bihar and Orissa, except treason or felony. Immunity from arrest under the court’s order was extended to the Governor-General, member of Council and the judges of the court itself. Appeals from the decisions of the court could be made to the King-in-council. Court were authorised to frame rules for its procedure.
6. Legislative Authority – Governor-General and Council could make rules for the good government of the settlement of Fort William and subordinate factories. This power was subject to three restrictions –(i) The rules framed may not be repuguant to the laws of England. (ii) They were to be reasonable and were to impose reasonable penalties. (iii) They were not to be effective until they were registered and published in Supreme Court. Any person in India could appeal against these rules within sixty days of its registration in Supreme Court. Any person in England could appeal to King-in-council within 60 days after its publication. There King-in-council suo moto disapprove any rule within 2 years of its passage by Governor-General.
7. Miscellaneous Provisions – Governor-General, members of Council, judges of Supreme Court, revenue, officers were prohibited from receiving any presents or engaging in private trade and commerce.
8. Dual Judicial System– There came into existence into Bengal Bihar and Orissa two independent and distinct judicial systems. One was the company’s system in the mofussil, self-sufficient in itself, having a hierarchy of court and deriving its authority from the Moghul Governments great Diwani to the company. The other was the supreme court, a royal court sitting at Calcutta deriving its authority from the British Crown and Parliament. The question of mutual relationship between the two systems became inevitable.
Defects of the Regulating Act of 1773
“The provisions of this Act of 1773” says Ilbert, “were obscure and defective as to the nature and extent of the authority exercised by the Governor-General and Council, as to the jurisdiction of the Supreme Court, and as to the relation between the Bengal Government and the Court.” The defects of this Act were as follows-
1. The Act used the expression “British subjects”, but it was not clearly defined. The distinction between “British subject” and ‘subjects of His Majesty’ was not clear. The term “British subjects” was perhaps used to denote the natural born subject of His Majesty, and the expression His Majesty’s subjects’ was, perhaps used to other than natural born British subjects.
2. The Act kept Diwani territories of Bengal, Bihar and Orissa beyond the jurisdiction of the Supreme Court but it provided that on specified persons of that area, the court should have jurisdiction. It was a contradiction in itself.
3. The Act did not specifically lay down as to what law the court was to apply. Nobody could be sure as to what law the Supreme Court would apply. It could be settled only when the matter came before the court for consideration. However, the court had to decide cases according to equity, justice and good conscience.
4. Ambiguity in the clauses of the Regulating Act brought about unhappy and unworkable relations between the Supreme Court and the Governor-General and Council.
5. The unhappy and unworkable relation was created between the Governor-General and his Council.
6 The relations between the newly created Supreme Court, which was administering English Law and the system of jurisdiction already existing in Bengal was not defined.
7 The defective authority of the Governor-General and Council over the other Presidencies. There was no concrete provision to describe the relation between the Supreme Government and the subordinate presidencies of Bombay and Madras.
Importance of Regulating Act, 1773 in the Legal History of India
This Act made a provision to keep proper and impartial administration of the company, e.g. the Governor-General and members of his council and the Judges of the Supreme Court were prevented from engaging in any private trade and commerce. They were subjected to the jurisdiction of the King’s Bench in England for their wrongs.
Regulating Act reconstituted the constitution of company. The control of the British Government ‘was tightened over company’s affairs. Company was not left completely free. Because of the establishment of a Supreme Court a better administration of justice became possible. Because of passage of this Act, the era of Royal charters gave place to the ear of parliamentary enactments.
Thereafter Parliament enacted a number of Acts usually at the interval of twenty years. Thus, gradually authority of Parliament tightened over company.
In spite of many advantages of the Act, certain difficulties cropped up immediately after. For several years, relations between Supreme Court and Council remained strained. The reason for this was that there were many ambiguities in the Act and the Charter of Supreme Court Provisions of the Act regarding Calcutta were quite specific but regarding Bengal, Bihar and Orissa they were vague. The Act distinguished between Calcutta and Bengal, Bihar’ and Orissa. The Act did not define clearly the extent of powers of Governor-General and Council over Diwani Territory whereas regarding Calcutta it was not so.
Jurisdiction of Supreme Court was not clearly defined. Its jurisdiction was not confined only to Calcutta like Mayor’s court but it extended over certain categories of persons living in Diwani lands. These provisions also created problem.
It may be noted that till 1773, the executive had exercised control over the judiciary. By the Regulating Act, provisions were made to control executive by the Supreme Court. This again created a till 1773 difficulty. The framers of the Act desired to evolve a system by which the action of company’s servants could be kept under legal restraints. To fulfil this policy the court was given jurisdiction over His Majesty’s subjects and those who were employed in the service of the company But Act did not make it clear whether court could call in question the activities of the company’s servants in the collection of revenue. This ambiguity created hostility between executive and Supreme Court.
Thus, it can rightly be said that instead of organising Govt. this Regulating Act, 1773 organized the centres of conflicts.
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Question:-
What were the reasons which lead to the passing of the Regulating Act, 1773 ? Discuss the provisions and shortcomings. Discuss its importance in Indian Legal History.
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