REGULATING ACT OF 1773
About Act of 1773
- Formally called East India Company Act 1772
- Lord North was the then British PM
- It did not completely take over power from East India Company(EIC), hence called ‘regulating’
- It was the first landmark law with respect to Indian constitutional development
Why Passed
- By 1773 EIC was in a very bad financial crisis
- EIC had defaulted annual payments to Crown (payments were made to maintain trade monopoly)
- This was primarily because of losses suffered in tea sales to America
- 85% tea that traveled to America was actually smuggled Dutch tea
- Tea Act 1773
- It was then passed to reduce massive amount of tea held in London warehouses by EIC
- It helped EIC financially
- 1772 – EIC sought loan of 1 million pounds from Crown
- Corruption and nepotism prevailed in EIC
- Bengal Famine caused further trouble
- Complex Dual form of administration instituted by Robert Clive in Bengal drew lot of complaints
- EIC – had Diwani rights ( Revenue)
- Nawab – had Nizamat rights (Judicial + Police)
- But in reality, both powers were with EIC
- Farmer, people welfare was neglected over maximizing revenue
- Lawlessness increased in Bengal
- 1769 – Hyder Ali defeated EIC
Imp Points
- First Time
- First Step by Crown to control EIC
- First time gave recognition to Political & Administrative functions of EIC
- Laid Foundation for Centralised Administration of India
- Features
- Governor of Bengal & Supreme Council
- Created post of Governor-General of Presidency of Fort William & so Governor was now called Governor-General of Bengal
- 1st Governor-General of Bengal : Warren Hastings
- 4 Councilors to assist Governor-General ->jointly called -> Supreme Council of Bengal or Governor-General Council
- Only Crown had powers to remove members of Governor-General Council
- Decisions of council were decided by majority
- Military Chief was also included in the council sometimes
- First Supreme Council
- Governor-General : Warren Hastings
- 4 members
- Lt-Gen John Clavering
- George Monson
- Richard Barwell
- Philip Francis
- Governors of Bombay & Madras
- were made subordinate to Governor General of Bengal
- earlier they were independent presidencies
- Supreme court
- A Supreme Court was established at Fort William – 1774
- 1 Chief Justice , 3 Judges
- First Chief Justice – Elijah Impey
- Only British Judges served
- EIC Servants Private Trade
- Ended with this Act
- EIC servants could no longer accept presents and bribes from natives
- EIC Court of Directors
- They had to now report on Revenue, Civil & Military
- Limited Company dividends to 6% until it repaid a £1.5m loan (passed by an accompanying act)
- Restricted Court of Directors to 4-year term
- 1/4th to retire every year
- No Re-election allowed
- Governor of Bengal & Supreme Council
Drawbacks
- Governor-General had no veto power in council
- The Act didn’t address concerns of Indians
- The Act failed to check corruption in EIC
- Powers of Supreme Court were not well defined
- Parliamentary control of EIC activities proved ineffective and the reports of Supreme Council were neglected
READ FULL MODERN HISTORY NOTES HERE
Sumit is Creator and Author at learncrisp.com. He started this learning platform with a mission to emerge as an aspirants resource hub, especially for those preparing in self study mode. He loves writing and his interests are History, Security and Diplomacy.