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Regulating Act of 1773

History and Background

The Act was the British Parliament's statute of governing control of Indian Colonies of British East India Company. ( Mostly in Bengal )

It was the British government's first action in the company's territorial affairs and the start of a takeover process that would last until 1858. The Regulating Act was established in response to the company's mismanagement of its Bengal holdings, which was brought to a head by the possibility of collapse and the company's demand for a government loan.

The legislation is intended to "control" the company's operations. It was enacted in both London and India.

Key Features

  • It called for the establishment of a Governor-General of Fort William in Bengal with authority over the Madras and Bombay reigns.

  • The Governor-General ruled over a four-member council and was granted a casting vote but no veto power.

  • A supreme court was to be established in Calcutta (1774) with a chief justice and three chief justices.

  • The act prohibited the servants of the company to engage in any kind of private trade / accepting presents and bribes.

The act increased the power of the British Government over the company by compelling the court of directors to report to its revenue, civil, and military affairs in India.


Before reforming the company's policies and controlling the Company's authoritative power over the territory of British Governmental Rule in India, the legislation had certain final causes:

  • The deteriorating financial condition of the company and its heavy debts.

  • Corruption among the company's servants,

  • Difficult administrative challenges associated with the dual government

  • In India, public sentiment against the company gained momentum.

  • Inadequate judicial administration,

  • Absence of a centralised authority to direct and oversee the Company's operations,

  • Company's defeats in 1769 at the hands of Mysore's Haider Ali

  • In Bengal, a terrible famine took a tremendous toll on the population.

  • In 1772, the firm filed for a one-million-pound loan.

Way Forward

In the United Kingdom, yearly elections of 24 directors were replaced by annual elections of six judges, whose terms were increased from one to four years with a one-year gap before re-election, and the voting threshold was increased from £500 to £1,000.

This move makes it more difficult for private groups to exercise influence over public policies and institutions through voting fraud. This also brought a stop to the collection of votes for private interests' control of policy and established continuity of policy for the company's direction.

Amending Act ( 1781)

The Act was passed by the British Parliament to rectify the defects that the 'Regulating Act of 1773' was carrying.

  • It absolved the Governor-General and the Council of the Supreme Court's jurisdiction over their official conduct. Similarly, it shielded the company's servants from the Supreme Court's jurisdiction for their official acts.

  • It declared the Supreme Court's authority over tax concerns and matters arising in the collection of revenue void.

  • It stipulated that the Supreme Court will have jurisdiction over all Calcutta residents. Additionally, it compelled the court to apply the defendants' personal law, i.e., Hindus were to be tried by Hindu law and Muslims were to be tried under Mohammedan law.

  • It established that appeals from Provincial Courts could be lodged with the Governor-General-in-Council rather than the Supreme Court.

  • It vested the Governor-General in Council with the authority to enact laws governing Provincial Courts and Councils.


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