1. REGULATING ACT, 1773

1. REGULATING ACT, 1773

Background: EIC faced financial crisis in 1772; had to seek a loan of £1 million from the British Government, giving Parliament the opportunity to regulate Company affairs. Passed under PM Lord North.

Key Provisions

• First step by the British Parliament to regulate and control the affairs of the East India Company in India.
• Designated the Governor of Bengal (Fort William) as "Governor-General of Bengal" — first Governor-General: Warren Hastings.
• Governor-General assisted by an Executive Council of 4 members.
• Governors of Bombay and Madras Presidencies made subordinate to the Governor-General of Bengal in matters of war, peace, and diplomacy.
• Provided for the establishment of a Supreme Court at Calcutta (1774) with a Chief Justice and 3 other judges — first Chief Justice: Sir Elijah Impey.
• Court of Directors of EIC (governing body in London) had to report on revenue, civil, and military affairs to the British Government.
• Servants of the Company prohibited from private trade and from accepting gifts/bribes from Indians.
• Strengthened Company's control over Bombay and Madras presidencies.

Significance/Impact

• First written document/constitutional charter of British India — laid the foundation of central administration.
• First time the British Parliament intervened directly in Company affairs.
• Recognized Company's political/administrative functions for the first time.
• Had defects — vague division of power between Governor-General and Council led to conflicts (e.g., Warren Hastings vs. Philip Francis); Supreme Court's jurisdiction was ill-defined causing conflict with the Governor-General's Council — these defects necessitated the Amending Act of 1781 and later Pitt's India Act, 1784.

Key Facts / Quick Revision Points

• Year: 1773; PM: Lord North
• First Governor-General of Bengal: Warren Hastings
• Supreme Court at Calcutta established: 1774 (via this Act)
• First Chief Justice of Supreme Court: Elijah Impey
• Executive Council: 4 members

Criticism / Defects

• Relationship between the Governor-General and his Council was not clearly demarcated — the Governor-General had only a casting vote, not an overriding one, so he could be outvoted by his own Council (this famously happened to Warren Hastings, who was frequently outvoted 3–1 by councillors including Philip Francis).
• The jurisdiction of the newly created Supreme Court overlapped and clashed with that of the Governor-General-in-Council, creating serious administrative confusion (e.g., the Patna Case and the Cossijurah Case).
• These defects were partly addressed by the Amending Act of 1781 (also called the Act of Settlement) which clarified the Supreme Court's jurisdiction and exempted Government officials acting in their official capacity from its purview — and more fully by Pitt's India Act, 1784.