It was first landmark in the constitutional development of India. It was through this Act that the British Parliament for the first time interfered into the affairs of India, to control the Company’s administration.
This Act remodelled the constitution of the Company both in England and in India, and then it was brought under the subjection of some degree of control.
As a result of these changes the Court of Directors of the Company was required to submit to the government, all communications about civil and military affairs received from Bengal and all revenues of India.
Governor of Bengal was made Governor-General with a council of four members with vast civil and military powers over Madras and Bombay presidency and government of territorial acquisitions and revenues in Bengal, Bihar and Orissa.
The Governor of Madras and Bengal had to be in close contact with Governor-General, regarding the interest of the Company, who in turn had to keep the court of directors informed.
The Act provided for the establishment of a Supreme Court at Calcutta for Europeans and Company’s employees.
Governor-General was given legislative power for the governance of Fort William and subordinate factories. All the servants or the Company were forbidden to receive any presents or bribes or to indulge in private trade.
Further the Act provided that if the Governor-General, Member of the Council or a judge of Supreme Court committed any offence, he would be liable to be tried and punished by the King’s court at England.
The Regulating Act was not without limitation. The defects and weaknesses of the Regulating Act of 1773 emerged once the Act was put to practice.
The defects of the Act were removed by the Declaratory Act 1781, The Pitt’s India Act 1784 and the Amendment Act of 1786.