In 1773, A.D.

the British Parliament passed an Act, called the Regulating Act with the

article to removing the evils inherent within the Company’s Constitution and giving an
orderly and efficient government to its territories in India. This Act, passed at the instance of
Lord North, was the primary of the long series of Parliamentary enactments referring to India.
Explaining the thing of the Act, Lord North declared during a speech on 18th May, 1773
A.D., “Every article in it's framed with a view to placing the affairs of the corporate on a
solid and decisive establishment.
The intervention of Parliament with definite authority in Indian affairs had become inevitable
after the acquisition of Diwani in 1765 A.D. The authority’s reception became anxious to find
out about the affairs of East India Company. In April, 1772 A.D., the House of Commons
appointed a get Committee of 31 members to enquire into the affairs of East India Company.
In November, 1772 A.D., a Secret Committee was appointed for the identical purpose. The
enquiries conducted by the Committees drove them to the inference that the
corporate was inadequate the task. Throughout the latter 1/2 the eighteenth century, there was
a growth of a sense that a people nation itself, through the Parliament, instead of through a
non-public trading Company, however powerful and wealthy, must ultimately be to blame
for a people decree India. the executive scandals in Bengal during the twin government
instituted by Lord Clive and also the greed of the administrators in England drew the eye and
also the intervention of Brits Parliament to the India affairs. Consequently, a constitutional
measure was enacted called Lord North’s Regulation Act of 1773 A.D.
Factors Leading to the Passage of the Act
i. Company’s Territorial Sovereignty and Constitutional Anomaly: Within the middle of
the eighteenth century, East India Company was performing a dual function,
commercial still as political and its conduct was being watched with covetous eyes by
the authorities in England. Originally, the corporate’s function was commercial but by
fighting the battle of Plassey and Buxur, it had regard to land Parliament. it had been a
long-time principle of English constitution that no subject should acquire territories
for its sovereign, and here in India, if the corporate had developed such quasi-
sovereign status, it absolutely was evidently an anomalous development. Thus, it had
become essential for British people Crown either to regularise the Company’s
territorial position in India or to assume this portion itself. Under the circumstances, a
vigorous Parliamentary interference had become inevitable to manage the affairs of
the Company.
ii. The Defects of the twin Government and high Administrative Evils: The twin or
double system in Bengal “a system within which those that had the facility, i.e., the
Company, cared for nothing except its purse and people that were accountable
for administration had no power” proved extremely harmful. There have been ruthless
oppressions of the people and both the servants of the Nawab and Company’s officers
competed with one another to fill their coffers. The working of the twin government
had thus caused havoc to the people. The servants of the corporate further added to
their miseries and sufferings. Besides, the loose and unconsolidated administration,
which existed in several territories, acquired by British in India is also a very
important factor for active and effective Parliamentary interference. There was no
strong central authority to manage and guide them. They made war and peace at their
own discretion, thereby involving the whole authority of the corporate into disgrace
and troubles. 
iii. The Role of the “English Nabobs”: After the idea of the Diwani of Bengal by
the East India Company, a good change had arisen in the attitude of the corporate,
 who were nicknamed as “English nabobs”. They amassed huge riches illegally and
exactions from the poor people of India. They took huge wealth of England. The ill-
gotten money in India was ill-spent in England. By corrupting the electorates of the
Rotten Boroughs, they entered the Parliament. the general public mind in England
was deeply stirred by the stories of the unscrupulous ways during which the “Nabobs”
acquired huge fortunes and therefore the upper crust grew jealous of their power, after
they appeared within the Parliament because the representatives of the Rotten
Boroughs. 
iv. Financial Bankruptcy of the corporate: The expectation of the Government and of the
share-holders, that the company was available in possession of an inexhaustible mine
or riches, however, failed to come true. The reckless policy of the corporate’s servants
and its expanding political commitments in India soon made the Company bankrupt.
It owed a debt of 4,00,000 to the govt in Britain, and a million p.a. to tend as subsidies
to the Mughal Emperor, the Nawab of Bengal and other Indian Chiefs.

Provisions of the Act 

A. Provisions managing Home Government
i. one amongst the foremost important provisions regarding the constitution of the
corporate in England was that the term of its twenty-four Directors was extended and
one fourth of them were to be retired each year and their place were to be filled up by
fresh elections.
ii. The qualifications for voting for the Court of Properties were raised. Hitherto, only
those proprietors, who had stock worth 500, for atleast six months, preceding the date
of election had the correct to vote for the election of the administrators.
iii. The Court of Directors was to get before the Treasury all correspondence from
India managing the revenues and before Secretary of State everything coping
with the civil and military affairs.

B. Provisions managing the Central Government of India

i. The Governor of Bengal was the Governor-General of India.
ii. The Regulating Act founded a Central Government for nation territories in India. It
was to incorporates a Governor-General, assisted by four councillors.
iii. The Governor-General and his Council were to carry office for five years
iv. the selections within the Council were to be acquired by a majority of votes, in case of
division among the members being equal, the Governor-General was allowed
a casting vote.
v. The Governor-General and Council were empowered to superintend the Presidency
Government. The Presidencies couldn't commence hostilities or declare war or
conclude any treaty with the Indian princes, without the previous consent of the
Governor-General in Council.
vi. The Governor-General in Council was empowered to create and issue rules,
ordinances and regulations for the nice order and also the civil government of the
Company’s territories in India.
vii. The Governor-General in Council was required to pay due obedience to the orders of
the Court of Directors and keep them constantly informed of all matters affecting the
interest of the corporate.

C. Provisions coping with the govt. of Presidencies

 The Governors in Council of Bombay and Madras were required to pay due
obedience to the Governor-General of Bengal.

D. Provisions handling the Governments of Presidencies

i. The Act provided for putting in place a Supreme Court of judicature at
Calcutta.
ii. Each judge of the Supreme Court was required to possess standing of at least
five years as a Barrister of England and Ireland and was to carry office at
King’s pleasure.
iii. The jurisdiction of the Supreme Court was to increase to all or any the
British subjects residing in Bengal, Bihar and Orissa. The Court was
empowered to do all cases of complaints against any of His Majesty’s
subjects for crimes or oppression. It was given both original and appellate
jurisdiction.

E. Provisions addressing Reforms in government officials 

i. The Act prohibited the receiving of presents and bribes by the servants of the
corporate.
ii. The Governor-General, members of his Council, of the Supreme Court were
prevented from engaging in any commercial transaction.
iii. If the Governor-General, Governor, members of Council, a judge of Supreme Court
or the other servant of the corporate committed any offence, he was vulnerable to be
tried and punished by King’s Bench in England.

Critical Assessment of the Act

The objectives of the Act were to get rid of abuses within the Company’s administration, to
purify its politics, to co-ordinate and unify the policies of the then Presidency governments,
to ascertain an efficient administration and stable conditions of law and order. But the Act
didn't achieve these admirable objectives. The Act was crude attempt at providing a
satisfactory government machinery.
The Act failed to give veto powers to the Governor-General. As laid down within the Act,
within the Governor-General Council the choices were to be made by a majority vote. The
Governor-General was given only a balloting just in case of an equal division. This made him
powerless before his Council. this example was sure to become more serious, because
Francis, Clavering and Manson were avowedly hostile to the Governor-General Warren
Hastings. they'd no knowledge of Indian problems and that they came to India with
prejudiced minds against the corporate and its servants. they'd their own notions and were
pledged to be together and concentrate all powers in their own hands.
The Governor-General and his Council wasn't given an entire control over the opposite two
Presidencies. the supply that just in case of an emergency, these Presidencies could act in
their own discretion–in fact nullified the entire power that was given to the Governor-
General. Wars were declared and alliances were entered into without seeking the prior
permission of Supreme Government in Bengal.
The provisions referring to the jurisdiction of the Supreme Court were “obscure and
defective.” They failed to say anything precise with relation to the powers of the Supreme
Court, the law it had been to administer and its relations with the Governor-General in
Council.
Significance of the Act
In spite of its serious defects, the Regulating Act was a measure of great constitutional
importance. It was the First Act of the Parliament interfering materially with the Company’s
affairs in India. It settled beyond doubt the right and power of the British legislature to
regulate the administration of the company’s territories. It was the first Parliamentary Acts
that altered the form of the British government in India. It was thus a transfer of the power
from the Company to the Parliament. The East India Company had started its career as a
purely commercial concern, but by its requisition of territories and the rights of the Diwani,
its character had changed, it started performing political functions for which had recognition
in the charters issued to it by the British Government. The Regulating Act distinctly
recognised the political function of the Company. The Act made the first attempt to centralise
the administrative machinery in India. It clearly laid down that the Governor-General and his
Council were to control and direct the Presidencies in their relations with the Indian powers.
The Act thus laid the foundation of a unitary type of the government in India. The Act
severely curtailed some of the powers of patronage, hitherto enjoyed by the Company in its
own rights. The Company was to secure a prior approval of the Crown for its nominees. The
Crown slowly developed its control in the appointment of the officers on the subordinate
positions, ultimately leading to the civil services of India being thrown open to competition.
Another significance of the Act was that it introduced certain welcome change in the Home
Government, whereby the chaotic state of affairs in the Court of Proprietors was sought to be
removed. By raising the qualifications of the voters their number was considerably reduced,
thereby concentrating the scattered powers of the Company in a few more interested and later
experienced hands. The Act introduced a collegiate control in order to prevent Governor
General from concentrating autocratic powers in his hands. The Act tried to put down
corruption and bribery among the servant of the Company. The highest officials like the
Governor General and the members of his Council, were entirely forbidden from entering
into any private commercial transactions in India and direction that no European would lend
money to the Indians at more than 12% interest was also calculated to check the exploitation
of the Indians at hands of the servants of the Company.

Conclusion
The Regulating Act made bold attempt at securing good government in the Company’s
territory in India, without the Crown directly assuming the responsibility for the same. It was
the first measure by which a European Government assumed the responsibility of the
governing territories acquired by it outside Europe and inhabited by civilised people. No
other European nation had so far made any such attempt. For the English as well, it was the
first measure of its kind. The Act was passed at a time when the controversy in Colonial
America was about to flare up into the war of the American Independence and the Act bore
the impress of all their stress and strains.