2 1-2 3

M.A.
(HISTORY) PART-II PAPER-II, GROUP-C

OPTION-I
HISTORY OF INDIA (1772-1818)
LESSON NO. 2.1 AUTHOR : SH. R.L. GULATI
THE REGULATING ACT, 1773

In 1773, A.D. was passed by the British Parliament an Act, known as the
Regulating Act with the object to removing the evils inherent in 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 first of the long
series of Parliamentary enactments relating to India. Explaining the object of the
Act, Lord North declared in a speech on 18 th May, 1773 A.D., “Every article in it is
framed with a view to placing the affairs of the Company on a solid and decisive
establishment.”
Circumstances leading to its Passage
The intervention of Parliament with definite authority in Indian affairs
had become inevitable after the acquisiton of Diwani in 1765 A.D. The authorities
at home became anxious to learn about the affairs of East India Company. In
April, 1772 A.D., the House of Commons appointed a Select 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 same purpose. The enquiries
conducted by the Committees drove them to the inference that the Company was
unequal to the task. Throughout the latter half of the eighteenth century, there
was a growth of a feeling that the British nation itself, through the Parliament,
rather than through a private trading Company, however powerful and wealthy,
must ultimately be responsible for the British rule in India. The administrative
scandals in Bengal during the dual government instituted by Lord Clive and the
greed of the Directors in England drew the attention and the intervention of the
British Parliament to the India affairs. Consequently, a constitutional measure
was enacted known as Lord North’s Regulation Act of 1773 A.D. Following were
the main factors leading to the passage of the Act :
(A) Company’s Territorial Sovereignty and Constitutional Anomaly
In the midd le of the eighte enth century, East Ind ia Company w as
performing a dual function, commercial as well as political and its conduct was
being watched with covetous eyes by the authorities in England. Originally, the
Company’s function was commercial but by fighting the battle of Plassey and
Buxur, it had relation to the British Parliament. It was an established principle
of English constitution that no subject should acquire territories for its sovereign,
and here in India, if the Company had developed such quasi-sovereign status, it
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M.A. (History) Part-II 61 Paper-II
was evidently an anomalous development. Thus, it had become essential for the
British Crown either to regularise the Company’s territorial position in India or
to assume this portion itself. The latter action had been suggested by Lord Clive
in a letter to Pitt in 1759 A.D. However, the question was one of policy and not
merely of a constitutional law. Moreover, such an action was opposed to the
principle of “sacredness of property”, which was so fully recognised in the
e ighte e nth ce ntury. U nd e r the circ umstance s, an active P arlia me ntary
interference had become inevitable to regulate the affairs of the East India
Company.
(B) The Defects of the Dual Government and Serious Administrative Evils
The dual or double system in Bengal “a system in which those who had
the power, i.e., the Company, cared for nothing except its purse and those that
were responsible for administration had no power” proved extremely harmful.
There were ruthless oppressions of the people and both the servants of the Nawab
and Company’s officers competed with each other to fill their coffers. According
to Alfred Lyall, “The magistracy, the police and the revenue officials vied one
another in misgovernment; there was no positive law and very little justice in
the country.” Mr. Richard Becher wrote in a letter to the Select Committee in
1772 A.D., “it must give pain to an Englishman to have reason to think that since
the accession of the Company to the Diwani, the condition of the people of this
country had been worse than it was before and yet I am afraid, the fact is
undoubted in this fine country, which flourished under the most despotic and
arbitrary government is verging towards it’s ruin.” Mr. Verelest, who succeeded
Lord Clive as the governor wrote, “Such a divided and complicated authority gave
rise to oppressions and intrigues unknown in any other period.”
The working of the dual government had thus caused havoc to the people.
The servants of the Company further added to their miseries and sufferings. The
famine of 1770 A.D. worsened the situation.
Besides, the loose and unconsolidated administration, which existed in
different territories, acquired by the British in India as also an important factor
for active and effective Parliamentary interference. The Government of Bombay,
Madras and Bengal were independent of one another. There was no strong central
authority to control and guide them. They made war and peace at their own
discretion, thereby involving the entire authority of the Company into disgrace
and troubles. The British Government had to find a remedy for these evils.
(C) The Role of the “English Nabobs”
After the assumption of the Diwani of Bengal by the East India Company, a
great change had come in the attitude of the Company, who were nicknamed as
“English nabobs”. They amassed huge riches from illegal and exactions from the
poor people of India. According to G.N. Singh, “They were cruel and shamelessly
greedy. They never hesitated from making capital out of poor people’s affections
and utilised even the prevailing severe famine coinditions in Bengal for their
private lucre.” Their game, however, did not end here. 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 public
mind in England was deeply stirred by the stories of the unscrupulous ways in
which the “Nabobs” acquired huge fortunes and the ruling class grew jealous of
their power, when they appeared in the Parliament as the representatives of the
Rotten Boroughs. T he p ub lic op inion in England d emande d an e ffective
intervention of Government in the affairs of East India Company.
(D) Financial Bankruptcy of the Company
The expectation of the British Government as well as of the share-holders,
that the Company had come in possession of an inexhaustible mine or riches,
however, did not come true. The reckless policy of the Company’s servants and
its expanding political commitments in India soon made the Company bankrupt.
It owed a debt of 4,00,000 to the Government in Britain, and one million per year
to be given as subsidies to the Mughal Emperor, the Nawab of Bengal and other
Indian Chiefs. Moreover, 852 the Company kept an army of 30,000 soldiers and
on the top of this, the proprietors had raised the rate of dividend. Consequently,
the Company was not only forced to payment of 4,00,000 but actually to beg for a
further loan of a million pounds from the Government. This gave an opportunity
to Parliament to intervene in the Company’s affairs and to regulate them in the
best possible manner.
(E) The Increasing Appetite of the Proprietors
Another factor which necessitated the Parliamentary interference in the
Company’s affairs was the ever-increasing appetite of the Proprietors of the
Company for dividends. They clamoured for higher dividends and the rate was
raised from 6 to 10 per cent in 1767 A.D. and to 12½ percent in 1773 A.D. Such
was the mirage of the riches of East India Company that the people in England
recklessly gambled in its stock which rose at a fast pace, till ultimately it was
discovered that the whole impression of Company’s fabulous profits was on the
verge of bankruptcy.
(F) Parliamentary Enquiries Lord North’s Bill
Lord North’s government appointed two Parliamentary Committees in
November, 1770, the Select Committee consisting of 31 members and the Secret
Committee consisting of 13 members, to enquire into the affairs of the East India
Company. The Select Committee submitted twelve and the Secret Committee six
Report–all condemning the Company for its misrule. The British Government,
therefore, decided “to regulate the Government of the East Indies”. On May 18,
Lord North introduced in Parliament, “The East India Company Bill” which he
described “as necessary to the well being, may to the existence of the Company”.
The Directors of the Company opposed the proposal of such violent interference
in their affafirs. Company and its friends presented a petition which said that the
“Bill will destory every privilege which the petitioners hold under the most sacred
security that subjects can depend upon in this country.” The strongest opposition
came from Burke. He maintained that the intervention of Parliament in the affairs
of East India Company was “impolitic, unwise and entirely repugnant to the letter
as well to the spirit of the laws, the liberties and the constitution of England.”
Inspite of the strong opposition, the Bill was passed by 131 to 21 votes in the
Commons and 74 to 17 votes in the Lord. It came to be known as Regulating Act
of 1773 A.D.
The Provisions of the Act
The provisions of the Act can be studied as under :
(1) Provisions dealing with Home Government
(a) One of the most important provisions regarding the constitution of the
Company in England was that the term of its twenty four Directors was
extended. Formerly, the Directors were elected for one year only, but now
they were to be elected for four years and one fourth of them were to be
retired every year and their place were to be filled up by fresh elections.
(b) 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 right to vote for the election
of the Directors. The Act now gave this right only to those proprietors who
had stock worth 1000 and for atleast 12 months before the date of elections.
As a result, 1.46 petty stock-holders were disqualified.
(c) The Court of Directors was to lay before the Treasury all correspondence
from India dealing with the revenues and before Secretary of State everything
dealing with the civil and military affairs.
(2) Provisions dealing with the Central Government of India
(a) The Governor of Bengal was the Governor-General of India.
(b) The Regulating Act set up a Central Government for the British territories
in India. I t was to consist of a Governor-Ge ne ral, assiste d by four
councillors. The first Gove rnor-Ge ne ral (Warre n Hastings) and his
councillors (Clavering Manson, Bervell and Francis) were named in the
Act.
(c) The Governor-General and his Council were to hold office for five years.
The Governor-General was to get a salary for 15,000 annually.
(d) The decisions in the Council were to be arrived at by a majority of votes. In
case of division among the members being equal, the Governor-General was
allowed a casting vote.
(e) The Governor-General and Council were empowered to superintend and
control the Presidency Government in their relations with the native powers.
The Presidencies could not commence hostilities or declare war or conclude
any treaty with the Indian princes, without the previous consent of the
Governor-General in Council.
(f) The Governor-General in Council was also empowered to make and issue
rule s, ordinance s and re gulations for the good ord e r and the civil
government of the Company’s territories in India. The enactments were (a)
required to be consistent with the laws enforced in England and (b) they
could not be held valid unless they were registered and published in the
Supreme Court at Calcutta.
(g) 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 Company.
(3) Provisions dealing with the Government of Presidencies
(a) The Governors in Council of Bombay and Madras were required to pay
due obedience to the Governor-General of Bengal. If they failed to carry out
the orders of the Governor-General in Council or did not perform their duties
properly they could be suspended by the Governor-General in Council.
(b) The presidencies were required to submit to the Governor-General in
Council all the information they had, concerning the government revenue
or interests of the company.
(4) Provisions dealing with the Governments of Presidencies
(a) The Act provided for setting up a Supreme Court of judicature at Calcutta.
This court was to consist of Chief Justice and judges.
(b) Each of the judges of the Supreme Court was required to have standing of
atleast five years as a Barrister of England and Ireland and was to hold
office at King’s pleasure.
(c) The jurisdiction of the Supreme Court was to extend to all the British
subjects residing in Bengal, Bihar and Orissa. The Court was empowered to
try all cases of complaints against any of His Majesty’s subjects for crimes
or oppression. It could try suits, actions of complaints against any person
in the employment of the Company or His Majesty’s subjects. It was given
both original and appellate jurisdiction.
(5) Provisions dealing with Reforms in Civil Service
(a) The Act prohibited the receiving of presents and bribes by the servants of
the Company.
(b) The Governor-General, members of his Council, of the Supreme Court were
also prevented from engaging in any commercial transaction.
(c) If the Governor-General, Governor, members of Council, a judge of Supreme
Court or any other servant of the Company committed any offence, he was
liable to be tried and punished by King’s Bench in England.
(d) Every Officer was required to submit to the Board of Directors, on his return
to England, a list of properties acquired by him, with an explaination of how
they were acquired.
A Critical Assessment of the Act
Various views have been expresed about Regulating Act of 1773 A.D.
Chatham described it as “an attempt towards Reformation”. Lord North claimed
every article of the Act was framed with a view to placing the affairs of the Company
on a solid, clear and decisive footing. Its objectives were to remove abuses in the
Company’s administration, to purify its politics, to co-ordinate and unify the
p o lic ie s of the the n P re s id e ncy gov e rn me nt s, to e st ab li sh an e ffi cie nt
administration and stable conditions of law and order. But the Act failed to achieve
these admirable objectives. Mr. Bouten Rose rightly remaked in the House of
Commons, “The object of the Act was good, but the system it established was
imperfect.”
The Act was crud e attempt at p roviding a satisfactory government
machinery. According to the Report on India Constitutional Reforms of 1918,
A.D., the Act violated the first principle of administrative mechanics. It created a
Governor-General who was powerless before his Council, an executive that was
powerless before a Supreme Court, itself immune from all responsibility for peace
and the welfare of the country.” According to P.E. Roberts, “The Regulating Act
was a half measure, disastrously vague in any points.” Dodwell has described it
as “a medley of inconsistencies, dictated by tyranny, yet bearing throughout
each line the mark of ignorance.” Percival Spear remarks, “In itself it was
temporizing measure full of defects.” A critical study of the provisions of Act shows
that it suffered from the following defects :
(1) The Act did not give veto powers to the Governor-General. As laid down in
the Act, in the Governor-General Council the decisions were to be made by
a majority vote. The Governor-General was given only a casting vote in case
of an equal division. This made him powerless before his Council. This
situation was bound to become more serious, because Francis, Clavering
and Manson were avowed ly hostile to the Governor-Gene ral Warren
Hastings. They had no knowledge of Indian problems and they came to India
with prejudiced minds against the Company and its servants. They had their
own notions and were pledged to be together and concentrate all powers in
their own hands. Barewell, the fourth councillor had some experience of
Indian administration and generally supported the Governor-General but
the three combined together, formed the majority in the Council and defeated
every proposal that emanated from the Governor-General for many years.
The Governor-General was generally over-ruled and he was made to carry
out a policy, which he did not approve. It was only after the death of Manson
and Clavering that Warren Hastings remark ed this “My antagonists
sickened,died and fled.”
(2) The Governor-General and his Council was not given a complete control
over the other two Presidencies. The provision that in case of an emergency,
these Presidencies could act in their own discretion–in fact nullified the
whole 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. According to P.E. Roberts, “The main
reasons probably was that other Presidencies had been so long independent
that it would take some time, before a tradition of loyalty to the Supreme
Government could grow up.” Hastings showed his disappointment in the
following words, “The Act given us a mere negative power and no more. It
says the Presidencies shall not make against every expression can imply a
power to dictate, what the other Presidencies shall do.”
(3) The provisions relating to the jurisdiction of the Supreme Court were
“obscure and defective.” They did not say anything precise with regard to
the powers of the Supreme Court, the law it was to administer and its relations
with the Governor-General in Council. Puniah writes, “The provisions of
the Act were so vague and undefined in their wording, and were couched
in positive rather than negative terms that they obscured the intention of
the authors and lent themselves to more than one interpretation and so
brought about serious conflicts between the Supreme Court and the Supreme
Council.”
Thus, while the Court claimed jurisdiction in matters of revenue, the
Supreme Council denied it, arguing that the provisions of the Act were against
the Court’s assertion of this authority. The Court claimed the right to try the judicial
and revenue officers of the Company, while the Supreme Court opposed it. The
Act did not define as to who were to be the “British subjects within the meaning
of the charter of the Supreme Court. “In one sense”, says Stephens, “the whole
population of Bengal and Orissa were the subjects. In another sense, no one was
a British subject who was Englishman born. In a third sense, the inhabitants of
Calcutta and not the general population of Bengal might be regarded as British
subjects.”
The Act was not clear regarding the law which was to be administered by
the Supreme Court. The Court did not know whether it was to administer the
native law in the law of defendent or that of the plaintiff.
The above mentioned anomalies of the Act led to disputes between the
Supreme Court and the Council. In case of the Raja of Cossijurah (1777-80 A.D.)
the two authorities came into open conflict. Mr. Hyde, one of the judges of the
Supreme Court issued a writ against the Raja of Cossijurah, a Zamindar of the
Company. But the Council told the Raja that he was not subject to the jurisdiction
of the Court. To worsen the situation when the Supreme Court sent Sheriffs,
officers to arrest the Raja, the Council sent some company to arrest the Sheriffs
officers and turn them back to Calcutta. This resulted in a serious clash between
the Court and the Council.
Besides this, the Supreme Court was not popular with native population.
The people were arrested in far off places and brought all the way to seat of the
Supreme court. The procedural technicalities, the unavoidable delays and the
severe and inhuman punishment, left the people terror-stricken. According to
Lord Macaulay, “The rule of the Supreme Court was the reign of terror.”
(4) The changes brought about by this Act in the Constitution of the Court of
Proprietors failed to achieve the desired results. The rising of the qualification
of votes among the Proprietors turned the Court of Directors into more or
less a permanent oligarchy. Kaye rightly remarks that the effect of the
Regualting Act was “to constitute a body of 30 Directors of whom six forming
a sort of none effective list, go out, every year by rotation.” About 1246 small
holders of stock had been disfranchised. The whole of the regulations
concerning the court and the Proprietors relied upon the principles, which
have often proved fallacious namely that a small number were a security
against faction and disorder. G.N. Singh writes, “The alteration in the voting
qualification of the General Court, did not improve the existing state of affairs,
because the lauding object of preventing Company’s retired servants from
gaining an excess of influence in the Company was not realised. On the
other hand, the Court of Directors was transformed into more or less
permanent oligarchy.” The Regulating Act was thus full of defects. It neither
gave the state a definite control over the Company, nor the Governor-General
a definite control over the servants, not the Governor-General a definite
control over his Council, nor the servants, not the Calcutta Presidency a
definite control over Madras and Bombay.
The Defects of the Act were Unavoidable
It is true that the Regulating Act was full of defects but it would be wrong
to condemn it outright. We must take into consideration the circumstances and
the limitations under which the authors of the Act had to work.
The worst criticized point of the Act is that its provisions were vague in
many respects. The critics, however, have failed to understand that in certain
respects, this vaguencess was deliberately maintained. The Company was holding
its power in India from two sources, i.e., the British Crown and the Mughals.
Under the se circumstances, obviously the British Crown could assert its
sovereignty only on the rights, which the Company had secured from the British
Parliament. The Crown’s efforts to assert its sovereign rights on Company’s Diwani
lands, could succeed only if Mughal sovereignty was entirely negatived. This
was too violent a step to be taken at that time. On the other hand, it was not
possible for the Crown to give a due recognition to the Mughal sovereignty which
in fact was nominal. Thus, the Act had to be vague in this respect neither clearly
recognising the Mughal sovereignty for expressly rejecting it. Moreover, problems
of Company’s territorial acquisitions in India were too wide and varied, for the
members of Parliament sitting thousands of miles away, to comprehend in their
fullness. S.C. Illbert has rightly remarked, “The defects of the Act were natural,
partly because of the necessity of the case and partly because the Parliament
was facing the difficult question of Constitutional Law.”
Moreover, Lord North by nature, could not take strong and decisive
measure, he believed in “Letting the sleeping dogs lie”. As such, he left the status
quo und i stur b e d . Lastl y, R e gula ting Act w as e nacte d at a ti me , w he n
Montesquieu’s theory of the “Separation of Powers” was in the air. It was catching
the imagination of the thinking population in England. The authors of the Act
were bound to be affected by it, while framing the constitution. Hence, it was
natural for the defects of this theory to influence the system established by the
Act. Thus, before pronouncing a final verdict on the Act, we must keep in view
the limitations of its framers.
Significance of the Act
Inspite 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 also the first in the series of the Parliamentary Acts that altered
the form of the British government in India from time to time. It was thus a
landmark in the 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 is also significant because it made the first attempt to centralise
the administrative machinery in India, which as Punniah writes, was a step in
the right direction. There was a need to consolidate the territories, which the
Company had acquired in India. The unification of some of the conflicting
interests of three Presidencies was also necessary. The act clearly laid down
that the Governor-General had 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 is also important because it severely curtailed some of the powers
of patronage, hitherto enjoyed by the Company in its own rights. The first Governor-
General, the members of his Council, the first Chief Justice and his colleagues
were all appointed by this Act itself, for the subsequent appointment in their
officers. The Company was to secure a prior approval of the Crown for its nominees.
After this the Crown slowly developed its control in the appointment of the officers
on the subordinate positions, thus, 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.
And besides, as K.V. Punniah writes, “The long tenure and partial renewal,
provided by the Act to the Directors, brought security and continuity in their
policy.”
The Act introduced a sort of collegiate control in order to prevent Governor-
General from concentrating autocratic powers in his own hands.
The Act is also significant in so far as it 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.
As their greedy attitude made the lives of the Indians miserable, it was a
remarkable provision from the latter’s view.
Moreover, the defects of the Regulating Act proved to be blessing in disguise.
But for the dissensions in the Governor-General’s Council, the impeachment of
Warren Hastings in the West Minister’s Hall and exact record of his questionable
deeds would never have become possible. Nor the trial of the Governor-General
and historic speeches of Burke, Fox and Sheridan, would have found a place in
pages of history.
We may conclude with the following observations made by Prof. Shri Ram
Sharma, “In this way, 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 an
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. The
British political philosophy at the time dominated by Adam Smith’s Wealth of
Nations on the one hand and the struggle between George III and the Whigs on
the other. The Act bore the impress of all their stress and strains.
SUGGESTED QUESTIONS
1. Describe the provisions and the significance of the Regulating Act of 1773
A.D.
2. “The object of the Act was good but the system it established was imperfect.”
Explain and Discuss.
3. Examine the significance of the Regulating Act of 1773 A.D.
4. Trace the circumstances leading to the passing of the Regulating Act and
describe its main provisions.
M.A. (HISTORY) PART-II PAPER-II, GROUP-C
OPTION-I
LESSON NO. 2.2 AUTHOR : MR. PUKH RAJ ARYA
PITT’S INDIA ACT, 1784 A.D.

(CIRCUMSTANCES, PROVISIONS AND CRITICISM)
Some of glaring defects of the Regulating Act have already been discussed
in the preceding lesson. The Amending Act of 1718 A.D. could not remove the
anomaly arising from the disavowal of sovereignty. The imperfections of the
Regulating Act and the Amending Act soon became manifest. The company’s
war with the country powers demonstrated that the Act had neither given the
state a definite control over Company, nor the Directors, a definite control over
their servants, nor the Governor-General a definite control over his Council, nor
the Calcutta Presidency a definite control over Madras and Bombay. As a matter
of the Constitutional anomaly regarding the interpretation of the term “British
subjects” was still pervading. The British subjects of the Crown in India were
waging wars, concluding alliances and making treaties not under the authority
of the Crown but by that of the Company. With the result, governors of the Company
in India acted freely without any constitutional control on them which eventually
led to be little in the name of British nation. Obviously, the British Parliament
could no longer tolerate such irregularities to continue as they were highly
prejudicial to the British interests in India.
The second important factor was the loss of the American colonies which
made it essential to have effective control over the East India Company. The
American War of Independence had resulted into the loss of 13 American
Colonies. As such, India became more important. Pitt admitted the importance of
India when he said, “After loss of American Colonies the biggest jewel that have
now remained in his Majesty’s Crown is the Company’s Indian possessions.” He
admitted that India had at all time been of great consequences to his country
and consequences had, of course, increased in proportion to the losses sustained
by dismemberment of other great possession.
There were yet another factors. The unhealthy influence of English Nabobs
in society and Parliament also percipitated the Parliamentary control. The
servants of the Company still returned with huge private fortune. Barwell made
an estimated pile of 80,000 after six years service despite the fact that he was an
inveterate gambler. He lost 40,000 in one sitting while his friend and colleague
Francis lost half the amount in the same fashion. Although it was generally
71
acknowledged that most of the evil flowed from the combination of commercial and
political functions in the Company, a complete separation of those functions was
viewed with disfavour. Besides involving the risk of appearinig to invade private
property, the discontinunance of its political authority was deemed prejudicial to
the commercial interests of Great Britian. Cornwallis held even much that “no solid
advantage would be derived from placing the civil and revenue departments under
immediate direction of the King’s Government.” Without Company’s power the
government,” he declared, “Longer would no longer be principle part of the choicest
commodities of India.”
Besides these considerations, the authors of the Pitt’s India Act were
movement advocate the cause of State control on the Company on humanitarian
ground. Pitt clearly stated that the state control was essential to confirm and
enlarge the advantage derived by this country from its connection with India
and also it was necessary to render connection a blessing to the native India. It
was this “sense of decency” which ultimately culminated into the Pitt’s India
Act.
In March, 1773 A.D., the Company was again obliged to petition for
financial relief. At this time, Burke declared that the relief and reformation of
the company must go together. He described the Company’s governments as one
of the most corrupt and obstructive tyrannis that probably ever existed in the
world. Even Fox called the Company’s administration a system of despotism
unmatched in all the histories of the world.
The urge for the change was so strong that it could not be suppressed for
long. In 1782 A.D., the Reports of the Select and Secret Committees led the way.
Shelburne, the Prime Minister of England, opened negotiations with Cornwallis
with the object of securing his consent to proceed to India as Governor-General.
But as the latter was reluctant to accept responsibility without increased powers,
the negotiations became protracted, and in 1781, when he had been induced to
waive his objections, Shelburne ministry gave place to Fox-North coalition.
The change in government was soon followed by proposal of reform. In
April, 1783 A.D., a bill was introduced by Dundas who was now in opposition. It
authorised the king to recall the Company’s principal servant without refernece
to the Company and invested king Governor-General with powers to override his
Council and increased the power of Supreme government over subordinate
presidencies. But the Bill failed for want of support from the then government.
On 18 November, Fox himself introduced a Reform Bill. He characterised
the existing system of government as government of anarchy and confusion. As a
remedy to this he recommended that entire civil and military administration
and revenues of India be committed that exclusive control of seven commissioners
with power to appoint and remove officers in India and to administer the
territories, revenues and commerce of the Company. The Fox Bill also suggested
the establishment of subordinate the Board of nine Assistant Directors for the
management of the commercial transaction of the Company. These proposals
creates stir among the Directors and though passed by a majority of the Commons
were finally rejected by the House of Lords at the instance of King George III.
There were many othe r reasons for the failure of the Bill. For example,
unpopularity of Fox and North, their refusal to take Company into confidence
and Burke’s opposition ruined chances of passage of the Bill. This failure of Fox
Bill led to the removal of his coalition by the King and William Pitt was appointed
to head the Government in December, 1784 A.D.
The task of the new government was fraught with two main difficulties.
Firstly, Pitt was pledged to introduced an Indian Bill with only a small minority
at his back in the House of Commons. Secondly, he was called upon to conciliate
the Company whose suspicion and fear had been aroused by his predecessors.
But as he was possessed of a genius for turning difficulties to his advantages he
cleared both hurdles successfully. In fact, the Company and the government both
had learnt from Fox’s failure.
The Company became convinced of the inevitability of the reforms and the
latter of the supreme need of moderations in forwarding its claims.
Before introducing his measures into Parliament, Pitt, therefore, carried
on negotiation with the Company and secured with its concurrence an agreed
plan of Parliamentary control over India affairs.
Pitt’s India Bill was introduced on 14 th January, 1784 A.D. But it was finally
defeated by a narrow majority. This was followed by a dissolution of Parliament
and a new election. Pitt’s Party returned to power in March by a great majority,
the bill was introduced again in July and was passed by a majority in both houses
of Parliament.
Main Provisions
The object of the Act was to provide for better regulation and management
of the affairs of the East India Company, and of the British possessions in India,
and for the establishment of a court of judicature for the more speedy and effectual
of persons accused of offences committed in the East Indies. With this object in
view, the Act introduce some important changes into the system of Home
Government and Indian Administration.
Changes in Home Government
The provisions relating to Home Government under Pitt’s India Act may
be divided into two parts :
(i) Provisions dealing with the Court of Directors
(ii) Provisions dealing with the Board of Control
(1) Board of Control
(i) In the first place, the Act created a “Board of Commissioners for the affairs
of India” which became popularly known as Board of Control. It consisted of
Secretary, the Chancellor of the Exchequer and four Privy Councillors
appointed by the king and holding the office during his pleasure.
(ii) The Secretary of State was to preside over the meeting of the Board, in his
absence the Chancellor of Exchequer, and in absence of both, the Senior
Commissioner present was to take chair. The President possessed a casting
vote in case opinion was equally divided. Three of the six commissioners
present formed a quorum.
(iii) The commissioners were authorised and empowered “to superintend,
direct and control all acts, operations and concerns which in any ways
related to civil or military government or revenue of the British territorial
possessions in the East Indies.”
(iv) In view of the above, all the members were to have access to all papers and
instruments of Company which was to furnish them with their extracts or
copies as they might from time to time require.
(v) The Directors were required to deliver to the Board copies of all such orders,
minutes or proceedings of the Company as related to matters of civil or
military government and territorial revenues. They were likewise required
to send to the Board copies of all such letters despatched and instructions
were sent to or received from India either by themselves or any of committees.
(vi) The board was empowered to approve, disapprove or modify the despatches
proposed to be sent by the Directors, might require the Directors to end out
the despatches as modified and cases of neglect or delay might require their
own orders to be sent out without waiting for concurrence of the Directors.
(vii) The Act further authorised that the Board of Control to transit through a
Secret Committee to three Directors secret orders to India on the subject of
war, peace or diplomatic negotiations with any of the country powers.
2. Court of Directors
(i) The Court of Directors was allowed to exist before and its commercial
privileges were restored . It was laid down that against the possible
encroachment by the Board on its commercial business the Directors had
to appeal to the King-in-Council.
(ii) The power to appoint principal servants of the Company namely Governor-
General, Governors of Madras and Bombay and commander-in-chief was
vested in the Court of Directors subject to the approbation of the King. Their
recall likewise rested both with Court and Crown.
(iii) In the exercise of the patronage, however, the Directors were restricted by
the provisions which subject promotion to principles of seniority and reserved
appointment to the Council exclusively to the members of the Convenanted
service.
(3) Court of Proprietors
The court of proprietors lost much of its powers. It could no longer revoke
or modify a decision made by the Court of Directors with the approval of the Board
of Control.
Pitt’s India Act, thus, established an effective instrument of control,
direction and supervision which operated with slight alteration till 1858 A.D. It
submitted the Indian government to a system of dual control in which company
retained for the most parts its powers to initiate proposals subject to the revising
and directing authority, the Board.
Provisions Dealing with the Government of India
(i) The Act of 1784 A.D. affected the constitution of the Governor-General’s
and Governor’s Council Each Council was to consist of three members one
of whom was to be the Commander-in-Chief. The appointments were still to
be made by the Court of Directors, but the Crown was given the right “to
remove or to recall the Company’s servants.”
(ii) Thus, specifically provided that resignation from the offices of Governor-
General, Governor and Commander-in-Chief and members of the Council
were not to be deemed valid and regular unless signified by an instrument
in writing.
(iii) T he pow ers of the Supre me Government at F ort William over the
subordinate presidencies were definitely enlarged and specified. It was
provided that Governor-General-in-Council shall have power and authority
to superintend, control and direct the several presidencies and government
of India in all such points as relate to any transaction with the country
powers, or the war or peace or the application of the revenues or forces of
such Presidencies and settlements in time of war or any such points as
shall from time to time, be specially referred by the Court of Directors.
(iv) The entire diplomatic relations of the Company in India as also the finances
necessary to support them were thus specially given to Supreme Government
at Fort William in Bengal.
In relation to the home authorities the intention of the Act was to invert
the Governor-General-in-Council with powers of large discretion accompanied
with the restraint of responsibility. They were to obey the orders from home but at
the same time, they were to have sufficient powers for all the proposals of
emergency, and all the occasions which immense might give rise to.
In matters of war and peace the Governor-General-in-Council was to be
guided by the orders and instructions of the Court of Directors.
(v) Subordinate presidencies were no more to conduct negotiations with
country powers except with the permission and direction of Governor-General
in Council, whose retification was made indispensable for any treaty or peace
concluded at their instance with native princes.
The subordinate governments were further directed not to disobey orders
of the Supreme Government on the ground of competence. They were bound to
obey such order in all such cases whatever, except only where they shall have
received positive orders and instructions from the Court of Directors or from Secret
Committee of the said Court of Directors repugnant to the orders and instructions
of the said Governor-General and Council and not known to them at time of
despatching their orders.
They were required to send for information of the Governor-General in
Council true and exact copies of all their orders, resolutions or acts.
The Supreme Government was empowered to punish disobedience by
suspension from the exercise of power in them by the Act.
Other Provisions
(i) In judicial matters, an important principle was laid down. Subjects to His
Majesty whether servants of Company or not, were made subject to
jurisdiction of Courts of India and Great Britain for crimes of any kind in
the territories or the native states.
(ii) Efforts were also made to restrain the evil-practices of the past. To demand
and receive a gift in the case of an officer of the Crown or the Company was
declared to be extortion, disobedience to the Court of Directors orders a
misdemeanour as also any bargain for giving up or receiving any office.
The Company was not to release or compound any sentence on a servant
nor restore to office when one dismissed by judicial sentence. It was also
provided in the Act that the Court of Justice before which every such offence
would be tried would have full power and authority to direct the said present
and gift of the value thereof to be restored to the party who had given the
same or to order the whole or any part thereof, or of any fine which the Court
might impose on the offender, to be paid or given to the prosecutor of
informer, as Court might think fit.
(iii) Reduction and retrenchments in establishment, civil and military, were
to be made by the Directors. In the Civil Service, promotions below the rank
of a councillor and in army below that of a Commander-in-Chief were to be
made by seniority and in special cases where the directors were to be
informed.
(iv) Special powers were given to Governor-General and Governors to authorise
the arrest of persons suspected of carrying on illicit correspondence with
persons in authority, whether in native states or European settlement but
this power seems to have been allowed to remain unused.
These were the main provisions of the Act. The Act was to come into force in
Great Britain immediately after it had received the royal assent and in India with
effect from January 1785 A.D.
The Working of Pitt’s India Act
As envisaged in the Act, the Board of Commissioners was appointed on
31 st August, 1784. Lord Sydney, Foreign Secretary of State, William Pitt,
Chancellor of the Exchequer, Henry Dundas, William W. Greenville, Lord Mulgrave
and Lord Walsingham were members of the Board. It was mainly Henry Dundas,
the senior Commissioner, who took the chair, organised its establishment and
took an active interest in Indian affairs.
The Act divided the entire administrative activities of the Company into
two distinct parts, namely, the commercial activities and political activities.
Commercial activities were left intact with the Company while its political
functions were now to be supervised and controlled by the Board of Control.
Thus, a sort of dual control from England was establsihed on the adminstration
of the Company by which its commercial and political activities were assigned to
two distinct bodies representing two separate authorities, the Crown and the
Company.
During the first four years of the working Pitt’s India Act, the Board of
Control and the Court of Directors usually tried to settle issues by an appeal to
statutory powers, and in doing so often clashed. The first important occasion for
a difference between the two arose on the issue of private English creditors of the
Nawab of Arcot. Though opposed in the beginning, the Board had finally to submit
to the demands of creditors of recognisation of exorbitant rate of interest and
other claims. This was done because the creditors had major influence among
the Directors.
T he Board of Control again came into conflict on the que stion of
appointments of Governors of Madras in 1765 A.D. and 1793 A.D. On both
occasions, Dundas was able to get the appointment of his choice.
A major conflict in the early part of the working of Pitt’s India Act arose
from the Board’s desire in 1787 A.D. to send out four European Regiments as
reinforcmeent to meet the suspected French Movement in India. The Directors
in the beginning opposed the proposition but when the Board persisted in its
decision to despatch the regiments, they declined to meet their expenses on the
ground that the proposition was not founded on their requisition. Conflict was
resolved by an appeal to Parliament in 1788 A.D. when Declaratory Act was passed
recognising the Board’s right to direct that all expenses for raising forces for
India were to be defrayed out of Company’s territorial revenues.
In practice, the method of conducting the business was changed. Dundas
introduced a mode of private discussion between Court and Board through which
policies and details were worked out. It not only reduced the bulk of correspondence
but also brought about understanding and appreciation of each other’s view which
facilitated a regular flow and progress of work.
Although the Court of Directors or the Secret Committee constituted under
the Act was the only medium of communication between the Board and the
Supreme Government in India, Cornwallis made use or private correspondence
and supplied useful information directly to Dundas and Pitt who in their turn
advised him likewise in the conduct of administration. This direct supply of
information not only helped the Board in the proper exercise of its controlling
authority but also enabled it effectively to influence Indian policy.
Cornwallis introduced yet another practice which reduced the influence
of the Directors and increased that of the Board, he directed that all political
proceedings be invariably transmitted to the Secret Committee who, if it so liked,
might communicate relevant portions of the Court of Directors. Later on, Wellesley
made it a regular practice.
The power to recall the principal servants of the Company was another
weapon in the hands of Board. The Board made an extensive use of his power
many a time. In 1794, when the Court of Directors appointed Mr. Holland as
incharge of Government of Madras, the President of Board of Control, Sir Henry
Dundas objected to this selection. Similar occasion came in 1806 A.D. when
Barlow the nominee of Directors was recalled by the Ministry.
The Board’s power to superintend, direct and control the civil and military
Government in India further strengthened its position. The Governor-General in
India generally preferred to obey the directions of the Board rather than those of
Court of Directors. This is evident from the fact that successive Governor-General
continued to follow, with secret support and approval of the Board, an aggressive
policy in India in defiance of the wishes of the Court of Directors. Thus, it was the
Board of Control and not the Court of Directors which dominated the Indian affairs
of the Company.
It is evident from the above, that the desire of the British Parliament to
place the Company in direct subordination to the British Government, was thus
fulfilled by the Act.
This, however, should not leave a misleading impression that the Court of
Directors had no active part to play in the administration of the Company. The
authors of Report on Indian Constitutional Reforms, 1918 write, “We must not
conclude however that the supremacy of the President of the Board of Control left
the Directors with no real control. Their position was still strong one, the right of
initiative still rested ordinarily with them, they were still the main repository of
knowledge, and though the legal responsibility lay with the Government they
exercised to the last a substantial influence upon details of administration.
Critical Assessment : Merits
The Pitt’s India Act was an important landmark in the constitutional history
of India as it laid the foundation of a centralised administration. The Act was
also a remedial measure. It removed the defects of the Regulating Act. The Control
of Parliament was tightened over the Company’s Affairs. Unity of system in
administration was established. Powers of Governor-General and Governors were
made more clear. Provisions were made for trial of the English offender and it
was also envisaged in the Act that the servants of the Company would lead a
purer life. The brighter side of the Act may be described as follows :
In the first place, the Act was an effort towards tightening of Parliamentary
control over the affairs of the East India Company. The Parliamentary control
imposed by the Regulating Act over the Company was inadequate. The Act
provided that all civil and military despatches received by the Court of Directors
from Governor-General in Council in India were to be forwarded to the Ministry
of British Government within 15 days. But no effective machinery was provided
to study and scrutinise those reports. But by its Parliament, through its Boards
of Control w as to supe rinte nd , dire ct and control the civil and military
Government of India. The Board of Control was as Pitt intended it to be strictly a
Board of Control. The Act virtually made the Board of Control the supreme authority
in regard to the affairs of Company in India and placed the Company in direct
and permanent subordination to a body representing the British Government.
Another noticeable feature of 1784 A.D. was its attempt to produce a “Unity
of System” in India in Company’s administration. The Act invested the Supreme
Government to be seated in Bengal, with an effectual control over every other
presidency and the Supreme Government was invested with executive powers.
Particularly, the power of suspension invested in Bengal Government in relation
to other presidencies gave it a considerable controlling authority over them. Thus,
the Act made bold attempt at unification of British possessions in India under
Governor-General in Council.
Thirdly, the Pitt’s India Act provided a great manifest improvement in the
mechanism of Indian Government. In Regulation Act, also such an effort was
made but the exception provided in the Act nullified the controlling power of
Government over the presidencies. The Pitt’s India Act sought to remove these
short-comings. Reducing the number of Councillors of Governor-General from
four to three and by introducing the supremacy of the Governor-General over the
Presidencies, an effort was made to bring out the efficiency in Company’s
administration.
Fourthly, till now there was no proper machinery for trail of English
offenders from India who were sent to England. The Act now provided the Court
of Justice consisting of three judges, four peers and six members of the House of
Commons for this purpose. English offenders were not to be tried in this special
Court.
Fifthly, the Act dealt a severe blow to the power and prestige of the Court of
Proprietors who could not alter the decision of the Director only approved by the
Board of Control. A.B. Keith remarks that this loss of power “was a proper
punishment to the Court of proprietors for defying the commoners in 1782 A.D.”
Yet another important feature of the Act was the declaration of policy to be
adopted in regard to Indian politics. It denounced the policy of conquest and
expansion of dominion in India as it was repugnant to the wish and honour of
Britain.
Lastly, the Act of 1784 A.D. furnished a basis for establishment of system
which remained in vogue till transfer of power to the Crown in 1858 A.D.
Commenting on this point Liberty has remarked that the “Act enunciated a system
which with its cumbersome and dilatory procedure and its elaborate system of
checks and counter checks, though modified in details, remained substantially
in force upto 1858 A.D.”
Thus, the Act establsihed a system which worked as a guideline for long.
It also made a bold attempt at the unification of British possessions in India.
Demerits
Though the merits of the Act far outweighed its demerits, yet it was not
altogether free from defects. Certain glaring defects in Pitt’s India Act of 1784
A.D. may be stated as follows :
Firstly, the Act suffered from ambiguity in its language. Theoretically, the
initiative in matters relating to Company’s possession in India was the concern
of Court of Directors but in practice it was the Board of Control which asserts its
superiority all the time and even interfered with the Director’s legitimate powers
of making appointments. In the Board of Control itself, it was the president which
usually prevailed.
In the second place, duality of control over the Company from “Home”
involved many difficulties. The control of Company’s Government was divided
between the Board of Control and Court of Directors and this divided the Board of
Control and Court of Directors and this divided responsibility from Indian
Government could hardly be conducive to Unity of purpose.
Yet another defect was in the procedure to be adopted by the Court of
Directors and the Board of Control for transacting business. It was cumbersome
and dialtory. K.V. Puniah right remarks, “Before a despatch upon the most
important matter could go to India, it had to oscillate between the Cannon and
India House”. the proposal was to be initiated by the Court of Directors and sent
to the Board of Control which could alter it. The altered draft was sent back to the
Board for preparation of final draft. Thus, this process of changing hands often
caused inordinate delay in taking decisions in the administrative matters.
Under the arrangements devised in the Act of 1784 A.D., the Governor-
General had two masters to obey, viz., the Court of Directors and the Board of
Control and he could afford to disobey neither. Moreover, in the absence of
adequate means of communication, the transmission of orders from “Home” to
the authorities in India could not be speedy. In view of the delay involved in
transmission of despatches the authorities at “Home” were left with no other
alternative but to approve the actions of the Governor-General. The conflict of
authority between the Court of Directors and Board of Control put Governor-
General in advantageous position and it is from this time that the theory of on
the spot came to be regarded as a central theme of the British system of
administration in India.
Thus, the Act had many weak points. It provided a weak government at
home by divison of power. It perpetuated the abuses in India by giving additional
authority of officers abroad. It was unstateman like in its principles for the
absurdly gave the power of originating measure to one Board, and the nomination
of officers for execution of those measures to another. It increased the influence
with vesting responsibiliuty and it operated by dark intrigue rather than avowed
authority.
Suggested Questions
1. Write in brief the circumstances leading to the passage of Pitt’s India Act.
2. Describe the main provisions of the Pitt’s India Act. Add a note on its merits
and demerits.
M.A. (HISTORY) PART-II PAPER-II, GROUP-C
OPTION-I
LESSON NO. 2.3 AUTHOR : MR. PUKH RAJ ARYA
AMENDING ACT OF 1786 A.D. AND CHARTER ACTS

OF 1793 AND 1813 A.D.
(CIRCUMSTANCES, PROVISIONS AND CRITICISM)
AMENDING ACT OF 1786 A.D.
Circumstances
By passage of the Pitt’s India Act, the control of the Crown over Company,
of Company over the Governor-General in Council, of the Supreme Government
over the subordinate presidencies were substantially improved and farily well
defined. But the powers of the Governor-General remained, however, materially
unaltered. He was bound to carry out the decisions of his council even if he did
not agree with them. The Council had Commander-in-Chief essentially as its
member. He could influence the decisions of the Council more effectively than
any other member. It was for this reason that Lord Marcartney who was appointed
to that office in February, 1785 A.D. declined to accept it unless he was
empowered to overrule his council and offered supreme command over Company’s
army in India. In his reluctance to accept the Governor-Generalship, Lord
Cornwallis was also guided by similar consideration. After Marcartney’s refusal,
when Pitt appealed to Lord Cornwallis to proceed to India, he consented only on
the conditions that he should be possessed of authority to override the Council
and the control of army.
Accordingly, Dundas introduced in 1786 A.D., a Bill designed to amend
the Pitt’s India Act. To justify, he referred to the evils that often flowed from the
inadequacy of Governor-General’s power. He observed : “All the mischief and
misfortunes, which had for years taken place in India, arose entirely from the
party principles of members of the different councils...and the factious scenes
which those council and almost informally presented.” Thus, the Amending Act
of 1786 A.D. was designed to fulfil two objects : to increase the powers of Governor-
General over his Council and the Home Government over the Governor-General.
Main Provisions of the Act
The Amending Act of 1786 A.D., therefore, invested the Governor-General
or Governor with power to override the decision of his Council and act without
its concurrence in extraordinary cases involving in his judgement the interests
of the Company or safety and tranquility of British possessions in India.
But certain restrictions were imposed for using the power. As these
82
emergency powers flowed from the executive authority of the Governor-General he
or the Governor was not entitled to put into execution any order or measure affecting
its legislative or judicial functions vested collectively in the Council, nor could he
impose any tax or duty without its explicit sanctions. Not only this, even in the
exercise of the executive powers of the government he was not authorised to act
without the Council, although he could do without its concurrence.
In case of differnce of opinion between the Governor-General and Governor,
and his Council, the Act specifically provided that “before the extraordinary power
was used to over-rule the majority, they must mutually exchange with and
communicate in Council to each other, in writing under their respective hands,
the respective grounds and reasons of their respective opinions.” Then if the
Governor-General or Governor finally elected to apply his veto, he was personally
to bear the responsibility of the measure adopted without the concurrence of the
Council.
The Act also recognised and confirmed the power of the Court of Directors
to appoint Governor-General and commander-in-Chief Governors and Concillors.
The Court of Directors was authorised to invite the offices of the Governor-
General and Commander-in-Chief of Company’s forces in India. Under this
provision Cornwallis held both the offices. Nomination to temporary vacancies in
Council was also vested in him under certain conditions.
Thus, it is evident that the Amending Act invested the Governor-General
and Governor with more powers. He could now defy his Council and act according
to his own will with bearing sole responsibility. Not only this, the post of the
Commander-in-Chief could also be united with that of Governor-General, thus,
making him all powerful.
CHARTER ACT OF 1793 A.D.
Circumstances
The East India Company was last granted monopoly for trade in the East
for 20 years by the Charter Act of 1773 A.D. This was to expire in 1793 A.D. The
renewal of the Charter fell due in 1793 A.D. This provided Parliament an
opportunity to discuss the desirability of renewing the Charter or otherwise. The
Company was earning good profit and its financial position was quite satisfactory.
Therefore, the merchants and manufacturers of leading towns of England
presented petition requesting parliament to terminate Company’s trade monopoly
and to effect the freedom of the eastern trade. But the President of Board of Control,
Sir Henry Dundas was not in favour of this. He was for renewal of the Charter. He
had active support of the Prime Minister Pitt who was at the height of his power.
A Committee of Directors was appointed to prepare a report on the eastern
trade. This report was to be presented to Parliament. To prepare the public opinion
in favour of the renewal of the Charter, Henry Dundas made a statement in the
House of Commons on February 15, 1793 A.D. He represented the conditions of
Indian finances to be tolerably satisfactory. Further, on April 23, 1793 A.D., while
introducing the bill in the House of Commons, he convinced the House of the
desirability to continuing the company as a political and commercial body and
to allow its Directors to retain their patronage and existing power.
The Bill had an easy passage in the House. Firstly, because it had full
ministerial support and secondly, because England was at war and supporting
Pitt’s Government at that time. The Bill, in the words of Pitt, “was passed with a
quietness unexampled in the annals of Parliament. Even the newspapers
practically ignored the discussion on the Charter.”
Provisions
The Act of 1793 A.D. was a very long Act. It repealed several of the previous
statutes and consolidated the law, but it did not make any alterations and
amendments. The important changes introduced by the Act were as follows :
1. The Act declared the Company’s territorial possession and trade monopoly
for next twenty years. The private merchants and manufacturers were,
however, allowed to trade to the extent of 3,000 tons of shipping subject to
certain restrictions. But these restrictions seriously fettered their rights
and merchants decided not to occupy the unprofitable channel thus opened
to them.
2. In the second place, the Act made a provision for payment to the members
and staff of Board of Control out of Indian revenues.
3. The Act in number of elaborate sections regulated the Company’s finances.
An annual surplus of 1,239,241 was assumed, out of which 5,00,000 were
to go to the liquidation of the Company’s debt; 5,00,000 were to be absorbed
in increasing the dividend from 1 to 10 per cent. Further, the Company was
to raise a loan of 2 million by adding new stock worth one million subscribed
at 200 per cent 100,000 were provided for a dividend of the new capital.
4. The Act effected a few changes in the system or government in India.
(i) The members of Council of Governor-General or Governor were essentially
to be residents of India for the period of twelve years as Company’s servants
at the time of their appointment.
(ii) The Commander-in-Chief was to be a member of Council if speedily
authorised by the Directors for the purpose.
(iii) In case of vacancy in the office of the Governor-General or Governor, it
was provided in the Act that the Councillor next in the rank was to act till
the permanent appointment was made.
(iv) Departure from India without permission to tantamount to resignation in
case of Governor-General, Governor members of Council and Commander-
in-Chief and no leave of absence out of India was allowed to them.
5. The powers of Governor-General and Governor were defined more clearly.
(i) The Governor-General and Governors were empowered to override their
Council in cases of such high importance as would in their judgement affect
in any way the safety and tranquility of British possession in India. This
power had, however, not to extend to judicial matters, taxation, etc.
(ii) The powers of Governor-General over subordinate presidencies were
expressed in the widest term, so as to apply to civil and military Government
in general, to the collection of application of revenues and to all matters
relating to war, peace and diplomatic relations with the native powers.
(iii) When visiting a presidency, the Governor-General was to supercede its
Gove rnor, Governor-Ge ne ral; w as authorise d to ap p oint one of his
councillors as Vice-President to act in his absence. In such cases he had
authority to issue orders and directions to the subordinate governments or
their officers even without previous consultations were to have the same
force and effect as were issued by the Governor-General in Council at Fort-
William.
6. The Civil servants of the Company were to be graded in ranks according to
seniority and promotion to higher rank was also made strictly upon the
length of the service. It was Indian who was in future to be eligible for post
carrying salary of more than 5000, 3000 and 4000 per annum, respectively.
7. For the preservation and maintenance of peace in the presidencies, a
number of justices were considered indispensable. The Governor-General
in Council essential for the purpose. Such appointments were, however, to
be made among the convenanted servants of the Company or other British
inhabitants. Further, the justices of respective presidencies were empowered
to appoint scavengers and other persons for cleaning, watching and repairing
the streets in the town. They were empowered to raise necessary funds for
this purpose by laying a sanitary rate in those localities under the Act. The
admirality jurisdiction of Supreme Court of Calcutta was extended to high
seas.
8. The Act reiterated that the policy of non-intervention enunciated by the
Pitt’s India Act of 1784 A.D. was to be pursued in India and schemes of
conquest and extension were contrary to use the “wish, honour and policy
of Britain.”
Lastly, the sale of liquor was made subject to the grant of licence.
R EV IE W
The Charter Act of 1763 A.D., as pointed out by Keith, “was essentially a
consolid ating me asure .” Comp any’s trad e p rivile ge s, sub je ct to ce rtain
restrictions, were continued for next twenty years. Though the private traders
were permitted to trade to the extent of 3000 tons of shipping, but the right was so
hedged about with restrictions that the merchants did not opt for this unprofitable
channel. Further, the Company was allowed to increase its dividend to 10 per cent,
thereafter on various conditions as sum of 500,000 was to be paid to the state.
Though shareholders benefited by the increase of dividends, the state did not get
its due share of 500,000 a year.
The Act clearly expressed in the widest terms of powers of Governor-General
over subordinate presidencies so as to apply to the civil and military government
in general. His power to override his council was repeated and applied to the
Governors, but here too the authority was declared not to apply to judicial matters
of taxation or legislation proper.
The Act also reiterated the policy of non-intervention as envisaged in the
Pitt’s India Act. But here again Lord Wellesley, the man on the spot, cared little
for this directive and continued the policy of expansion.
Thus, it is quite evident that the Charter Act of 1793 A.D. was not of much
constitutional importance; it affected no important change. However, it is
important to note that the Act provided for the payment to the members of Board
of Control and its staff out of Indian revenues. It was an unfortunate practice
which continued till the coming into force of the Act of 1919 A.D. with undesirable
effect. It was to diminish greatly the opportunities of parliamentary control as it
was only at the time close of discussing the estimates that the work of each
department came in for force security in parliament.
Reforms between 1793 and 1813 A.D.
The main structure of Indian government as laid down in the Charter Act
of 1793 A.D. remained unchanged during the long period of European wars but
minor measures were enacted by Parliament to meet emergent needs. It will not
be out of place to give a summary of such enactment here.
The Act of 1797 A.D. prohibited unauthorised loans by British subjects to
native princes. By the same Act, the number of judges of the Supreme Court at
Calcutta was reduced from three to two including the Chief Justice. The Act also
directed that all regulations formed by the Governor-General in Coucil at Fort
William for internal government of the British territories in Bengal should be
registered in the Judicial department and formed into a regular code. The
Provincial Courts were directed to be bound by these Regulations.
Another Act p asse d in 1 79 9 A.D. contained p rovisions re lating to
Company’s European troops and maintenance of discipline among them.
The Act of 1800 A.D. provided for the establishment of a Supreme Court at
Madras and extended the jurisdiction of the Supreme Court at Calcutta over the
district of Banaras and all other districts which had been annexed or might
thereafter be annexed to the Presidency of Bengal.
By an Act of 1807 A.D. the Governors in Council in Madras and Bombay
were conferred the powers of making regulations subject to approval and registration
by Supreme Court and Recorder’s Court as had been vested in Governor-General
in Council. The next important measure was the Charter Act of 1813 A.D.
THE CHARTER ACT OF 1813 A.D.
In 1813 A.D. the renewal of Company’s Charter fell due. This time the
conditions were not the same as they were in 1793 A.D. It was no longer possible
to continue the commercial privileges of the Company for many reasons. Firstly,
the “Continental Blockade” against British commerce establsihed by Napoleon
since 1808 made the British exports suffer a great setback. The British merchants,
therefore, asserts that Indian trade should be thrown open to them to compensate
them for the losses they had incurred and could continue incurring by to
continental system. Secondly, the popular theory of laissez faire, advocated by
Adam Smith, included the trading classes launch an attack on trading monopoly
of the Company. They counted the advantages of free trade as the extension of
British commerce and industry, the prevention of the diversion of Indian trade
to other countries, the reduction in the cost of trade specially in transportation
and warehousing charges and the cheapening of the Indian raw imports into
Britain.
The pro-monopoly lobby, on the other hand, called these advantages
illusory. In their view the Indian trade was not paving at all and the habits and
standards of Indians were such that no expansion was possible. The Directors
pointed out a large number of practical difficulties and asserted that freedom of
trade with India would bring ruin on the Company and the end of the British
Empire in the East. The servants of the Company were also there to support views.
They painted the results of European settlements in India in lured colours.
Warren Hastings expressed his fears when he said, “They would insult, committing
plunder and oppress the natives and no law enacted from home could prevent
them from acts of licentiousness of every kind with impunity.” Illbert agreed that
these apprehensions were not unfounded but they were expressed in language
of unjustifiable interference and exaggeration.
Finally, when the decision was taken to throw open the Indian trade,
Parliament was not guided by these arguments. As a matter of fact, the cry for
free trade with India did not mean and was not intended to mean free trade
between England and India. It was a selfish and an interested cry directed against
the monopoly of the East India Company. Parliament in throwing open the trade
was mainly guided by the severe distress caused to British commerce and
industry by Napoleon’s decrees. But even after this, Parliament went cautiously.
Europeans were allowed to proceed to India and were required to preserve the
authority of the local governments.
Another justification advanced by the supporters of free entry of European
in India centered round the missionary work. Strong agitation was carried on
both inside and outsided Parliament by the leaders of the Evangelists for giving full
facilities to the missionaries to go to India and to spread to gospels of Christ. Not
only this, Claudius-Buchanan, a Chaplain of Bengal presidency, stressed the need
of regular ecclestical establishment a bishop and archdeacons qualified to advise
the government on the religious matters Wilberforce and other forcefully presented
the case of Evangelists in Parliament. But here again were some people like Marsh
and Taignmouth who pleaded for the continuance of the old policy of interferences
with the religious beliefs of Indian people. The government was of the view that the
Company should base its religious policy on political expediency rather than on the
Christian principles. But finally, such conditions were created which influenced
and shaped the religious clause of the Charter Act of 1813 A.D.
The shape of Charter Act of 1813 A.D. was to some degree influenced by the
utilitarian thought and principles. The renewal of the Company’s Charter offered
opportunity for expression of liberal principles in relation to India. Lord Grenville,
leader of the Whigs emphasized to define the character of Company’s duty and
object of that rule before granting the Charter for the continunance of the Company’s
rule. He pleaded for moral improvement of the people and their social happiness,
the security of their property and personal freedom, the protection of their agriculture
and products, the peace of their province and impartial administration of their laws.
Next to these objects he placed the interests of his country. He believed that it
could be secured in harmony with Indian interests if only pursued with sincerity
and on the principle of just and liberal policy. Grenville, therefore, recommended
that the government should be separated from all intermixture of the mercantile
interests and transaction, and that young men for civil service should be chosen by
free competition, not the patronage of the Company.
Last, but not the least, the policy of war and conquest pursued by Wellesley
had considerably enlarged the British possessions in India.
Almost whole of India with the exception of Punjab and Sindh had come
und er the paramount influence of the British. The Company’s te rritorial
possessions in India had thus expanded so much that it was rather difficult for
her to continue as both a commercial body and political sovereign. Parliamentary
intervention was, therefore, a necessity.
During the Governor-Generalship of Wellesley had doubled the debts of
the Company and the trade of the Company also suffered considerably. In 1805
A.D., the Court of Directors experienced a great embarassment by a run upon
treasury and in order to meet it appealed to the Parliament. Thereupon, Parliament
appointed a select committee on March 11, 1908 to enquire into the Company’s
state of affairs in India, as preliminary to the grant of financial help. The Committee,
during next four years published many reports, the most famous being the fifth and
the last report in 1812 A.D. On the basis of these reports, Parliament intervened in
the Company’s affairs and passed the Charter Act of 1813 A.D.
Main Provisions of the Act
The Act of 1813 A.D. comprised a set of thirteen resolutions which were
submitted by the Government to Parliament for consideration at the time or
renewing the trade monopoly of the East India Company. The main provisions of
the Act were as follows :
1. The Act of 1813 A.D. renewed the charter of the Company and while
preserving the sovereignty of Crown granted the Indian possessions and
revenues to the Company, with the monopoly of China trade and tea for
further term of twenty years.
2. Secondly, the Act of 1813 A.D. threw open the general Indian trade to all
the British merchants, subject to various restrictions laid down in the body
of the Act. It empowered the Directors and on their refusal, the Board of
Control, to grant licences to persons wishing to proceed to India for the
purpose of enlightening or reforming Indians or for other lawful purposes.
It made the unlicensed persons liable to punishment as interlopers.
3. The Act regulated the ap plication of the Indian re venues. It made
provisions for the maintenance of force, the payment of interest, the
maintenance of civil and commercial establishments and as charges on
the revenues. Provision was also made for the reduction of the debts of the
Company and nation in the ratio of one to five. And the Company was asked
to keep the commercial and territorial accounts separate and distinct.
4. The number of troops which the Crown might send to India at the cost of
India was fixed at 20,000 save on special requisition. In further elucidation
of the righs of the Company it was provided that Government in India could
make law and regulations and the articles of war for native troops and
authorise the holding of courts martial.
5. The Government of India were also authorised with the sanction of the
Court of Directors and Board of Control to impose taxes on persons subject
to the jurisdiction of the Supreme Court and impose imprisonment for failure
in mak ing the p ayme nt of such taxe s. T his pow e r, of course , w as
supplementary to that exercised under the authority inherited from the
Indian states, which was of doubtful validity in respect of British subjects.
6. The powers of control were clearly defined and considerably enlarged.
The appointment to the offices of the Governor General, Commander-in-
Chief, Governors etc. were to be made by the Court of Directors subject to
the approval of the Crown, and countersigned by the president of the Board of
Control. The Company had also to seek the approval of the Board while making
minor appointments. The Company’s training colleges for its civil and military
servants were to be maintained under the authority of the Board of Control.
The colleges established for the training of the Company’s personnel at Calcutta
and Madras in India were also to work under the directions of the Board of
Control.
7. In view of the expected influx of traders, justices of peace were jurisdiction
in case of assault of trespassing committed by the European British subjects
on the natives of India and in case of small debts due to Indians. British
subjects residing, trading or occupying immovable property more than ten
miles from a presidency town were to be subject to the jurisdiction of the
provincial courts in civil matters, and special arrangements were made for
criminal cases.
8. By an innovation the Act set aside one lakh of rupees each year for the
revival and improvement of literature and for the introduction and promotion
of the British territories in India.
9. Provision was made for a Bishop of Calcutta and three archbishops. The
bishop was to have jurisdiction over the minister of Church of England, in
India, but naturally no attempt was made to establish the Church therein.
R EV IE W
Though the Act of 1813 A.D. retained the old system of Company’s
government in India without any modifcations, it was significant for various
reasons. The monopoly of Company’s Indian trade was shaken off as the British
merchants could also trade with India except the trade in tea. The effect of the
abolition of Company’s trade monopoly was that British trade which was worth 13
million tons in 1813 A.D. developed seven times in next fifty years providing a
suitable outlet for the British.
The policy envisaged under the Act clearly reflects upon the impact of
public opinion on the British Parliament at that time. Despite the best support
from the ministry for the retention of Company’s trade monopoly in India, the
House of Commons could not afford to bypass the popular voice of the nation
which clamoured for free policy with India. The result was that Indian trade was
thrown open, except tea and this too, alongwith monopoly in China trade, was
abolished in 1833 A.D.
The opening of the Indian markets to Britain’s expanding industries
resulted in an increasing influx of European and British born subjects into India.
Constitutional changes were required to bring these immigrants within the
bounds of India laws.
The Act of 1813 A.D. was undoubtedly a progressive step taken by the
British Government to educate the native inhabitants of British India. A sum of one
lakh rupees was set aside under the provision of the Act for moral and intellectual
betterment of Indian natives. Though the money granted for the purpose was not
utilised for next twenty years nevertheless it makes the first step towards education
of the Indian people.
The greatest significance of the Act lays in the fact that it asserted the
undoubted sovereignty of the Crown in and over the Company’s territories in
India.
Further, the Act paved the way for spread of Christianity. The England
missionaries by establishing missionary schools and colleges at various places
in India succeeded in influencing illiterate Indians and making them embrace
Christianity.
With free flow of English capital and enterprise in India, an era of
exploitation unshered in. The British factories eclipsed the Indian industries
and the British merchants with their cheaper and superior goods ousted their
Indian fellow worker. From this date approximately observer Dr. Ishwari Prasad,
“begins the run of Indian industries, the growing independence upon agriculture
and consequent poverty of our people.”
Suggested Questions
1. Describe the main provisions of the Charter Act of 1793. Add a note on its
merits and demerits.
2. Trace the factors which shaped the Charter Act of 1813.
3. Discuss the main provisions of Charter Act of 181 3. Also show its
importance.

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M.A.

(HISTORY) PART-II PAPER-II, GROUP-C

LESSON NO. 2.1 AUTHOR : SH. R.L. GULATI

THE REGULATING ACT, 1773

LESSON NO. 2.2 AUTHOR : MR. PUKH RAJ ARYA

PITT’S INDIA ACT, 1784 A.D.

LESSON NO. 2.3 AUTHOR : MR. PUKH RAJ ARYA

AMENDING ACT OF 1786 A.D. AND CHARTER ACTS

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