Company Rule in India: From Traders to Sovereigns
The term “Company Rule” pertains to the British East India Company’s rule in India. Beginning as traders in 1757, the British formed the British East India Company to facilitate trade between India and Britain. Over time, Company Rule expanded its influence to encompass the entire Indian subcontinent, ultimately establishing British sovereignty.
As the British established trade ventures throughout India, they concurrently became involved in the country’s political affairs and gradually seized control over various regions. This article provides a comprehensive overview of Company Rule in India, tracing its historical development.
Company Rule in India (1773-1858): Legislative Evolution and the Transition to Direct Governance
The period known as “Company Rule” (1773-1858) marked a significant phase in India’s history. It saw the British Parliament passing numerous acts to regulate the operations of the East India Company (EIC). However, this era came to an end in 1858 following the Sepoy Mutiny. Subsequently, the British Parliament assumed direct governance of India.
During this time, the British Parliament enacted several laws to oversee the East India Company’s actions. But in 1858, the Sepoy Mutiny led to the termination of Company Rule, and India came under the direct administration of the British Parliament.
Company Rule in India (1773-1858): Evolution, Supremacy and the Dawn of Independence
The British Company Rule endured for nearly a century, spanning from 1773 to 1858. Following this era, India transitioned into Crown Rule, signifying direct governance by the Queen of England. The Company Rule sparked a series of uprisings across India, ultimately culminating in a widespread struggle for independence.
As the Company gained “diwan” status in Bengal, it progressively replaced local Nizam rule with its own administration. This article provides an overview of the pivotal period known as Company Rule in India.
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Company Rule: A Historical Timeline of British Influence |
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|---|---|
| Established | 1773 |
| Revoked | 1858 |
| Preceded by | Mughal Empire |
| Succeeded by | British Crown Rule |
Regulating Act 1773: Pioneering Company Rule in India & Legal Transformations
- The Company Retains Possessions Act allowed the East India Company to maintain control over its territorial holdings in India while implementing regulations for its operations.
- This legislation marked a significant milestone as it granted the British cabinet the authority to oversee Indian affairs.
- Furthermore, it introduced the position of “Governor-General of Bengal,” with the administration in Bengal being managed by the Governor-General and a council consisting of four members. Warren Hastings assumed the inaugural role of Governor-General.
- Additionally, the Act brought the Governors of Bombay and Madras under the authority of the Governor-General of Bengal.
- A pivotal development was the establishment of a Supreme Court in Bengal (Calcutta), equipped with appellate jurisdictions for citizens seeking legal remedies. This court comprised one chief justice and three other judges.
- In 1781, the Act underwent an amendment, exempting the Governor-General, the Council, and government officials from jurisdiction for actions performed in the discharge of their official duties, thereby contributing to the foundation of Company Rule in India.
Pitt’s India Act 1784 and the Birth of Dual Governance Under Company Rule
- Introduction of Dual Control System: This act introduced a unique system of governance where both the British government and the East India Company shared control.
- Transformation of the Company: Under this system, the East India Company became a subordinate department of the State, and its Indian territories were termed ‘British possessions.’ However, it retained authority over trade and day-to-day administration.
- Establishment of Oversight Bodies: Two important bodies emerged – the Board of Control, responsible for managing the Company’s civil, military, and revenue affairs, composed of the Chancellor of the Exchequer, a Secretary of State, and four Privy Council members appointed by the Crown. Additionally, crucial political matters were handled by a secret committee of three directors, part of the Court of Directors, which maintained direct communication with the British government.
- Governor-General and Commander-in-Chief: The council of the governor-general was streamlined to three members, including the commander-in-chief. In 1786, Lord Cornwallis gained authority as both the governor-general and commander-in-chief, granting him the ability to override council decisions if he accepted responsibility. This governance model set the stage for the Company Rule that followed.
Charter Act 1793: Empowering the Governor-General and Shaping Company Rule in British India
- Empowerment of Governor-General: This act expanded the authority granted to Lord Cornwallis, allowing all subsequent Governor-Generals and Governors of Presidencies to wield similar overriding powers over their councils.
- Official Appointments Under Royal Scrutiny: It made it mandatory for the appointment of the governor-general, governors, and the commander-in-chief to receive royal approval.
- Restrictions on Senior Officials: Senior Company officials were prohibited from departing India without official permission, with such action considered tantamount to resignation.
- Financial Provisions: The legislation, part of the broader Company Rule, stipulated that the Board of Control members and their staff would be funded from Indian revenues, a practice continuing until 1919. Additionally, the East India Company was required to make an annual payment of 5 lakh pounds to the British government after covering essential expenses.
Charter Act 1813: Transforming Trade and Initiating Company Rule in India
- English Traders’ Request: English traders pressed for a share in India’s trade, primarily because they had suffered trade losses due to Napoleon Bonaparte’s Continental System, which aimed to harm England’s commercial interests.
- End of Company Monopoly: As a result of these demands, the East India Company lost its exclusive control over trade. The legislation emphasized the unequivocal authority of the Crown over the Company’s possessions, shaping the trajectory of Company Rule.
- Trade Monopoly Exceptions: Nonetheless, the Company retained its trade monopoly with China and its tea trade.
- Support for Indian Education: An annual sum of Rs.1,00,000 was allocated to promote literature, encourage educated Indians, and advance scientific knowledge among the Indian population. This marked an initial step toward acknowledging the government’s role in education.
Charter Act 1833: Company Rule and India’s Evolution
- Company’s Trade Situation: The 20-year lease granted to the Company through the Charter Act of 1813 for territory possession and revenue collection was extended. Nevertheless, the Company’s monopoly over trade with China and tea came to an end.
- European Immigration Freed: All restrictions on European immigration and property acquisition in India were lifted, allowing for extensive European colonization in India.
- Introduction of Governor-General of India: The title of “Governor-General of Bengal” was transformed into “Governor-General of India.” This newly empowered position oversaw and managed all civil and military affairs, controlled revenue collection, and had full authority over expenditures. William Bentinck became the inaugural Governor-General of India.
- Law Commission Established: This legislation established the Law Commission, tasked with consolidating and codifying Indian laws. It introduced a fourth ordinary Member to the Governor-General’s Council for India, specializing in lawmaking. Lord Macaulay became the first individual appointed to this role.
Evolution under Charter Act 1853: Company Rule in Transition
- Company’s Trade Situation: The Company retained control of its territories unless otherwise specified by Parliament.
- Overhaul of Services: The Company’s influence over government positions was eliminated, and these positions were now accessible through competitive exams.
- Expansion of the Executive Council: The law member gained full membership in the governor-general’s executive council.
- Indian Legislative Council: Local representation was introduced in the Indian legislature, known as the Indian Legislative Council.
- Governor-General’s Veto Power: However, for a law to be enacted, it needed the approval of the governor-general, who had the authority to veto any legislative council bill.
Government of India Act 1858 and the End of Company Rule
- Impact of the 1857 Revolt: The 1857 Revolt revealed the East India Company’s limitations in managing complex situations.
- End of Company Rule: This uprising led to calls for stripping the Company of its authority over Indian territories. Consequently, the dual system established by Pitt’s India Act came to an end, and India was to be governed in the name of the Crown. This governance was executed through a secretary of state and a council of 15, although this council had an advisory role.
- Introduction of the Viceroy: The title “Governor-General of India” was replaced by “Viceroy,” elevating the prestige of the position, though not its authority. The Viceroy was appointed directly by the British government, with Lord Canning becoming the first Viceroy of India.
Tip: Reforms During Company Rule by Governors-General
Lord Cornwallis (1786-93): As the first Governor-General, he introduced and organized the civil services. He abolished the District Faujdari Courts and established circuit courts in Calcutta, Dacca, Murshidabad, and Patna. Cornwallis implemented the Cornwallis Code, which separated revenue and justice administration, extended jurisdiction to European subjects, held government officials accountable in civil courts for their official actions, and established the principle of the rule of law.
William Bentinck (1828-1833): Governor-General Bentinck abolished the four Circuit Courts and transferred their functions to the Collectors. He created a Sadar Diwani Adalat and a Sadar Nizamat Adalat in Allahabad to serve the people of the Upper Provinces. Under his rule, English replaced Persian as the official language in courts, and litigants were given the choice to use either Persian or a vernacular language in court proceedings. Additionally, the codification of laws resulted in the development of the Civil Procedure Code (1859), Indian Penal Code (1860), and Criminal Procedure Code (1861).
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UPSC Notes Related Articles |
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| UPSC Polity Notes | Centre-State Relations |
| Fundamental Rights | Fundamental Duties |
Company Rule FAQs
Q.1) What was the company rule in India 1773 to 1858?
Ans. Company Rule, spanning from 1773 to 1858, marked a period when the British East India Company held sway over Indian territories. Following the 1857 uprising, the second phase commenced, resulting in the end of Company Rule and the assumption of control by the British Crown over India’s regions.
Q.2) What was the company rule Regulating Act of 1773?
Ans. The initial move by the British government to oversee and manage the East India Company’s operations in India was significant. It involved the prohibition of company employees from participating in private trade or accepting gifts or bribes from the local population.
