Regulating Act 1773

East India Company Act 1772^[a]

Act of Parliament
Parliament of Great Britain
Long title	An Act for establishing certain Regulations for the better Management of the Affairs of the East India Company, as well in India as in Europe.
Citation	13 Geo. 3. c. 63
Introduced by	Frederick North, Lord North on 18 May 1773
Territorial extent	Great Britain Bengal Presidency Madras Presidency Bombay Presidency
Dates
Royal assent	21 June 1773
Commencement	10 June 1773 1:00pm
Other legislation
Amended by	Statute Law Revision Act 1887 Statute Law Revision Act 1888
Relates to	13 Geo. 3. c. 64
Status: Repealed
Text of statute as originally enacted

The Regulating Act 1773 (13 Geo. 3. c. 63) (formally, the East India Company Act 1772) was an act of the Parliament of Great Britain intended to overhaul the management of the East India Company's rule in India (Bengal).^[1] The act did not prove to be a long-term solution to concerns over the company's affairs. Pitt's India Act was therefore subsequently enacted in 1784 as a more radical reform. It marked the first step towards parliamentary control over the company and centralised administration in India.

By 1773, the East India Company (EIC) was in dire financial straits. The company was important to the British Empire because it was a monopoly trading company in India and the east, and many influential people were shareholders. The EIC paid £40,000 (equivalent to £46.1 million in 2015) annually to the government to maintain its monopoly but had been unable to meet its commitments since 1768 because of the loss of tea sales to America. About 85% of all the tea in America was smuggled Dutch tea. The EIC owed money to both the Bank of England and the government. It had 15 million lbs (6.8 million kg) of tea rotting in British warehouses and more en route from India. The Regulating Act 1773, complemented by the Tea Act 1773, had the principal objective of reducing the surplus of tea held by the financially troubled EIC and improve its financial standing.

Lord North overhauled the management of the India Company with the Regulating Act. The EIC had taken over large areas of India for trading purposes and had an army to protect its interests. Company men were not trained to govern, so North's government began moves towards government control since India was of national importance. The Act set up a system whereby the British government supervised the work of the EIC. Company shareholders opposed the Act, and the EIC was still a powerful lobbying group in Parliament despite its financial problems.^[2]

• The Act limited Company dividends to 6% until it repaid a £1.5m loan (passed by an accompanying act, 13 Geo. 3 c. 64) and restricted the Court of Directors to four-year terms.^[3]
• First step taken by the British government to regulate and control the company's affairs in India.
• It prohibited the servants of company from engaging in any private trade or accepting presents or bribes from the "natives".
• The Act elevated Governor of Bengal, Warren Hastings to Governor-General of Bengal and subsumed the presidencies of Madras and Bombay under Bengal's control.^[3] It laid the foundations for a centralized administration in India. Governor of Bengal became the Governor General of Bengal with an executive council of four to assist him. Decisions would be taken by majority and Governor General could only vote in case of tie.
• The Act named four additional men to serve with the Governor-General on the Supreme Council of Bengal: Lt-Gen John Clavering, George Monson, Richard Barwell, and Philip Francis.^[3]
• A Supreme Court was established at Fort William at Calcutta (1774). British judges were to be sent to India to administer the British legal system that was used there.
• Establishment of Supreme Court at Calcutta with Sir Elijah Impey as first chief justice. Court has both the Civil and criminal jurisdiction. With original & appellate jurisdiction.
• It has permitted the company to keep back its territorial possession in India. It has not given the complete power to company hence called as regulating act. Ultimately, we can conclude that it was the first step towards parliamentary control over the company.

• East India Company Act
• Pitt's India Act
• Government of India Act 1858