The founding of the East India Company in 1600 marked the beginning of a significant chapter in Indian history. Initially a trading entity, the Company evolved into a governing authority by 1765. While its early influence on Indian politics and governance was minimal, the period between 1773 and 1858 under the Company’s rule, and subsequently under British Crown rule from 1858 to 1947, witnessed profound changes in constitutional and administrative structures. These changes, primarily aimed at advancing British imperial interests, inadvertently introduced aspects of the modern state into India’s political and administrative framework.
Transition from Trade to Governance
Acquisition of Diwani Rights
- Battle of Buxar (1764): After this decisive battle, the East India Company acquired the Diwani rights (the right to collect revenue) for Bengal, Bihar, and Orissa.
- Obligations to Indian Authorities:
- Mughal Emperor Shah Alam II: The Company was obligated to pay an annual subsidy.
- Nawab of Awadh, Shuja-ud-Daula: Provided an annual pension.
- Appointment of Deputy Diwans:
- Mohammad Reza Khan: Oversaw Bengal.
- Raja Shitab Rai: In charge of Bihar.
First British Intervention
- Demand for Revenue Share (1767): The British government made its first significant intervention by demanding a 10 percent share of the annual revenue, amounting to £400,000.
- Dual System of Governance (1765-1772):
- Company’s Authority without Responsibility: The Company held authority but not responsibility.
- Indian Representatives’ Responsibility without Authority: Indian officials bore responsibility but lacked real power.
- Issues During Dual Governance:
- Corruption: Company’s employees exploited private trading to amass personal wealth.
- Oppression of Peasantry: Excessive revenue collection led to peasant hardships.
- Company’s Financial Troubles: Despite employees thriving, the Company faced financial difficulties.
Need for Regulation
- British Government’s Decision: To bring order to the Company’s operations, the British government decided to regulate the East India Company.
- Implementation of Controlling Laws: A gradual increase in laws aimed at oversight and control.
Constitutional Developments Under the Company’s Rule (1773 – 1858)
The Regulating Act of 1773
The Regulating Act of 1773 marked the British government’s formal involvement in Indian affairs, aiming to oversee and manage the East India Company’s operations. It recognized that the Company’s role in India extended beyond trade into administrative and political realms, introducing a centralized form of governance.
Background
- Period of Dual Government (1765-1772):
- Neglect of People’s Well-being: British rulers neglected governance, leading to oppression by appointed officers.
- Bengal Famine of 1770: Although not directly the Company’s fault, it exposed severe governance breakdown under their rule.
- Wealth of Company Servants:
- “Nabobs”: Company servants returned to England with immense wealth, often suspected to be spoils from Bengal.
- Integration into Aristocracy: Their extravagant lifestyles elicited mixed reactions in England.
- Financial Instability of the Company:
- Financial Recklessness: Despite debts of £6 million, the Company declared a 12% dividend.
- Lack of Transparency: Financial mismanagement highlighted the need for oversight.
Government Intervention
- Select Committee Formation:
- Led by General Burgoyne: Investigated the Company’s affairs.
- Findings: Pressing needs to rectify abuses and separate governance from commerce.
- Committees of Enquiry Reports:
- Damning Findings: Revealed financial instability and corruption.
- Passage of Two Key Acts:
- First Act: Granted the Company a £1.4 million loan at 4% interest under certain conditions.
- Second Act: The pivotal Regulating Act of 1773, despite opposition from the Company and its allies.
Key Provisions of the Regulating Act, 1773
Changes to the Company’s Constitution in England
- Voting Rights: Increased the right to vote in the Court of Proprietors from £500 to £1,000 shareholding.
- Court of Directors: Elected for four years instead of annually.
- Number of Directors fixed at 24, with one-fourth retiring each year.
Oversight of Indian Affairs
- Mandatory Reporting: Directors required to submit all correspondence related to revenues to the Treasury.
- Civil and military administration reports sent to a Secretary of State.
- Limited British Cabinet Control: Allowed some control over Indian affairs, though rights were limited.
Creation of a Collegiate Government in Bengal
- Establishment: A Governor-General (President) and four Council members formed the government.
- Decision-Making: Based on majority voting.
- The Governor-General had a casting vote in case of a tie.
- Quorum required three members.
- Appointments: First Governor-General Warren Hastings and Councillors named in the Act.
- Held office for five years; removal possible only by the King on the Court of Directors’ recommendation.
- Future appointments to be made by the Company.
Powers of the Governor-General-in-Council
- Authority: Granted control over the civil and military government of the Presidency of Fort William in Bengal.
- Supervised and controlled certain aspects of the subordinate Presidencies of Madras and Bombay.
Establishment of the Supreme Court
- Charter by the Crown: Empowered to establish a Supreme Court of Judicature in Calcutta.
- Composition: Consisted of a Chief Justice and three puisne judges.
- Jurisdiction: Functioned as a Court of Equity and Common Law, an Admiralty Court, and an Ecclesiastical Court.
- Authority over all public servants of the Company.
- British subjects in Bengal, both European and Indian, could seek redress for oppression.
- Held both original and appellate jurisdiction.
- Trial Procedures: Cases heard with assistance of a jury of British subjects.
Anti-Corruption Measures
- Prohibition of Gifts: Barred anyone holding civil or military office under the Crown from accepting any form of gift, donation, gratuity, or reward.
Salaries
- Generous Compensation for key positions:
- Governor-General: £25,000 per year.
- Council Members: £10,000 per year each.
- Chief Justice: £8,000 per year.
- Puisne Judges: £6,000 per year each.
Significance of the Regulating Act
- Historical Pioneering Effort: First significant attempt by the British to establish governance in India.
- Creation of Governing Authority: Delegated administration specifics to the East India Company while aiming for transparent and efficient governance.
- Judicial Safeguards: Established the Supreme Court of Judicature to prevent abuses by Company officials.
Challenges
- Lack of Contextual Understanding:
- The Act did not fully grasp the complexities of Indian governance.
- Ineffectiveness:
- Instead of strengthening Warren Hastings’ position, it added to his difficulties.
- Need for Nuanced Approach:
- Highlighted the necessity for more informed governance strategies.
Duration
- The Regulating Act remained in operation for eleven years until replaced by Pitt’s India Act of 1784.
- Warren Hastings, as Governor-General, navigated the challenges of administering India under this Act.
The Amending Act of 1781
Following the Regulating Act, several corrective and supplementary laws were enacted, including the Amending Act of 1781. This Act aimed to address the ambiguities and operational challenges posed by the earlier legislation.
Provisions of the Amending Act
Supreme Court Jurisdiction
- Limitation on Jurisdiction: Actions of the Company’s public servants in their official capacity were exempt from the Supreme Court’s jurisdiction.
- Authority over Residents of Calcutta: Supreme Court had authority over all residents of Calcutta.
- Administered the personal law of the defendant.
Respect for Religious and Social Customs
- Mandate for the Supreme Court: Required to consider and respect the religious and social customs and practices of the Indian population when enforcing decrees.
Governor-General-in-Council’s Powers
- Appellate Authority: Appeals from Provincial Courts were to be heard by the Governor-General-in-Council, serving as the ultimate court of appeal.
- Exception: Civil cases involving sums of £5,000 or more could be appealed to the King-in-Council.
Rules and Regulations
- Exemption from Supreme Court Registration: Rules and regulations made by the Governor-General-in-Council were not subject to registration with the Supreme Court.
- Departure from previous practice to prevent the Court from judging the legality of these measures based on English laws and customs.
Immunity for Government Servants
- Protection in Official Duties: Granted immunity to government servants for actions performed while carrying out their official duties.
Emphasis on Social and Religious Customs
- Respecting Subjects’ Practices: Reinforced the importance of acknowledging and respecting the customs and traditions of the Indian populace.
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Conclusion
The period between 1773 and 1858 was transformative in the constitutional development of India under British rule. The Regulating Act of 1773 and the subsequent Amending Act of 1781 were significant steps in establishing British governance structures in India. While aimed at creating a more transparent and efficient administration, these Acts often fell short due to a lack of understanding of the Indian context. Nevertheless, they laid the groundwork for future legislative reforms and highlighted the complexities involved in governing a diverse and vast territory like India.
