REGULATING ACT 1775

The Act was passed by the British parliament, sought to control and regulate the affairs of the British East India Company, both in England and India.

l  Why the Act was passed?

1.       The dual system of government in Bengal (Government jointly by the company and the Nawab of Bengal) called for remedial action.

2.       The ruling circles felt that the administrative set-up of the company in England was unsatisfactory. They feared that corrupt retired servants of the company would corrupt public life in England

3.       The company was on the brick of bankruptcy owing to the following factors

(A)  The Court of Proprietors had raised the dividend from 6% to 12% which drained the company’s resources.

(B)  The British Government required the company to pay it 400,000 pounds per annum from 1767 to 1772

(C)  The famine in Bengal and wars in south India left the company’s treasury empty

l  Major provisions

1.       The Act designed its chief as Governor- General of Bengal and a council of four members were appointed. The first Governor General (Warren Hestings) and Councilors (Philip Francis, Clavering, Monson, and Barwell) were named in the Act.

2.       The Government of Bombay and Madras Presidencies were subordinated to the Bengal Government in matters of making treaties or declaring war. Thus began a central Government in India.

3.       Establishment a Supreme Court at Calcutta (William Fort) consisting of a chief justice (Sir Elijah Impey) and three subordinate judges (Chambers, Lemaister and Hyde). The court was given both original and appellate jurisdiction. All the public servants, all British subjects in Bengal, European and Indian, were made amenable to its jurisdiction.

4.       The court of Directors, comprising 24 members, was to be elected for four years, with 1/4^th members retiring every year. Council could be removed by the King on the recommendation of the Court of Directors.

5.       Salaries fixed as Governor General (25000 pounds), member of council (10000 pounds), Chief Justice of Supreme Court (8000 pounds), Other judge (6000 pounds)

6.       The company was required to submit copies of all correspondence received from India to the British Government.

7.       The company’s monopoly over the trade with East Indies was extended for 20 yrs.

8.       The company’s servants were prohibited from accepting bribes or doing private trade.      

l  Importance of the Act

1.       It marked the beginning of British Parliamentary intervention in India Affairs.

2.       The East India Company was recognized as a commercial-cum-political body

3.       The Act opened new channels for Britain’s Imperial ambitions in India.   

l  Defects in the Act

A number of defects in the Act led to many complications, some of the defects were;

1.       The Act was a half measure. It left many points doubtful

2.       A conflict in the Governor General’s council caused administrative deadlock between 1774 and 1776.

3.       The Supreme Court’s jurisdiction was obscure leaving unclear

(I)                The law coming under its purview

(II)             The Court’s jurisdiction and judicial officers of the company.

(III)           The Court’s relations with the Governor General’s council.

4.       The Bengal Government’s control over subordinate presidencies was in practice ineffective.

5.       The Act failed to improve the functioning of the company in England.

                                                                                                                                             

WARREN HESTINGS (1772-1785)

                                      

(A) Administrative Reforms

·   The Court of Directors ended the Dual system of Administration in Bengal Then Hesting dismissed the two Deputy Diwans

·   The Governor and the council formed the Board of Revenue and the company appointed its own officer called “Collector” to manage revenue affairs.

·   The Treasury was removed from Murshidabad to Calcutta

·   He appointed Munni Begum, the widow of Mir Jaffer as the guardian of minor Nawab Mubarak-ud-Daula of Bengal.

·   Allowance of the Nawab reduced from 32 lack to 16 lacks

·   The district of Allahabad and Kora were taken back from emperor and sold to the Nawab of Oudh for 15 lacks rupees.

·   He stopped the payment of 26 lacks of rupees annually paid to the Shah Alam.

                (B) Revenue Reforms

·   In 1772 made a 5yr settlement (The Quinquennial Settlement) of land revenue.

·   By the crude method of farming out estate to the highest bidder.

·   Indian Diwans replaced the private trade involved and corrupt collectors in the districts.

·   The drawback of the settlement was, the land had been over assessed and the state demand fixed very high. The result was that many revenue collectors fell in heavy arrears.

·   In 1776, Abolished the system of Quinquennial Settlement and reverted to the system of Annual settlement on the basis of open auction to the highest bidder. Changes made in it in 1781.

·   The provincial councils were abolished

·   The Collectors were reappointed in the districts but were to have no power in the settlement on the basis of open auction, for that Qanungos were appointed.

(C) Judicial Reforms

·   Built up the frame work of Justice after the Mughal Model (in 1772)

Calcutta Level	District Level
President and Council supervised Deputy Nizam assisted by Chief Kazi, Chief Mufti and  3 Maulavis Sadr Fauzdari Adalat	Collector supervised Indian Officers of the Company assisted by Quazis and Mufties Fauzdari Adalat
Governor, two Members of Supreme Council assisted byIndian Officers Sadr Diwani Adalat	Collector  Diwani Adalat

·   Diwani adalat could decide cases involving sums up to Rs 500

·   In Diwani cases Hindus, he Hindu law was applicable and in case of Muslims the Muslim laws

·   The Mohammadan law was followed in Fauzdari adalats.

·   Fauzdari adalat could not award death sentence or order confiscation of property without approval of Sadr Diwani Adalat.

·   The Regulating act 1773 provided for the setting up of Calcutta. Where English law was administered. Therefore the Justice of the Supreme court and other courts often clashed Chief Justice of Supreme court. Impey had to resign in November 1782

·   He attempted to codify Muslim and Hindu laws. A translation of the code in Sanskrit titled ‘Code of Gentoo Laws’ (1776). William Jones and Colebrooke published ‘Digest of Hindu Laws’(1791) attempt were also made to translate ’Fatwa-i-Alamgiri’ into english.

(D) Commercial Reforms

·   All custom houses suppressed and only 5 custom houses at Calcutta, Hugali, Murshidabad, Dacca and Patna were to be maintained.

·   Duties were lowered to 2.2%

·   Checked the misuse of Dastak or free pass signed

·   Checked the exploitation of weavers by the company’s agents.

·   Tried to develop trade relations with Bhutan and Tibet.

(E) The Regulating and Conflict with the Council

·   The Regulating act 1773 formed a council of Governor with Warren Hesting, Barwell, Clavering, Philip Francis and Manson

·   Hesting always remained in conflict with council as the state of Imbalance of Power created.

(F) Nandakumar case

·   Nandakumar, forcedly retired by Diwan of Bengal, probed that Hesting and Nawab wazir having accepted Rs. 3.5 lacks gratification from Munni Begum for appointing her as guardian for minor Nawab of Bengal, Mubarak-ud-Daula. Nandakumar requested to produce himself before the council.

·   Hesting refused to recognize the right of the council to sit in judgment on him.

·   Counter offensive against Nandkumar.- 19 April 1775 one Kamal-ud-Din brought charges ‘Nandakumar coerced him to sign a petition against Hasings and Barwell’

·   Mohandas, a pleader alleging that a certain jewels bond purporting to be signed by Balaki Das and to be an acknowledgment by him of a debt due to Nandakumar was a forgery.   

·   On 6^th May 1775 Jury heade by Impey Hanged Nandakumar.

(G) External Relations and other

·   The First Anglo-Maratha War (1776-1782)

·   The Second Anglo-Mysore War (1780-1784)

·   Concluded treaty of Banaras (1773)with Nawab of Oudh.

·   The Rohilla War (1774) against Hafiz Rehamat Khan, Rohilla leader

·   The Affair of Chait Singh        

ROBERT CLIVE (1765 - 1767)

(A) Political settlement after Buxar war (23 Oct 1764)

First Treaty of Allahabad (16 Augustb1765)- with Shuja-ud-Daula, Nawab of Audh

1.Nawab surrenders Allahabad and Kora to Emperor Shah Aalam II

2.Pay Rs. 50 lacks to company as war indemnity

3.Balwant Singh, zamindar of Banaras in full possession of his estate.

Thus Nawab entered into an "Offensive and Defensive Treaty" with company

Second Treaty of Allahabad (16 Augustb1765) - with Delhi Emperor Shah Aalam II

1.He was assigned Allahabad and Kora ceded by the Nawab of Audh

2.He granted the company the Diwani of Bengal , Bihar and Orissa (12 August 1765)

3.In return company granted annual payment of Rs. 26 lacks to him and Rs.53 lack for the expenses of the Nizamat of the said provinces

Effect -

1.Nawab became a firm friend of Company

2.Clash with Afgans under Abdali and Marathas avoided

3.Audh became a buffer State

4.Emperor of Delhi became a pensioner means  "An useful rubber stamp" for company.

5.In Bengal,Najm-ud-Daula was allowed to succeed as Nawab of Bengal (After the death of his 
father Mir Jaffer) on the condition that to surrender Nizamat function.

(B)  Dual system

 

 (A) Nizamat  -  Military, Defense, Police and Administration of Criminal and Justice

                                              From -  Najm-ud-Daula, the Nawab of Bengal

   (B) Diwani   -  Financial activities and Revenue affaires

                                              From  -  Emperor Shah Aalam II

Company appointed two Deputy Diwans

        1.     Mohammad reza Khan  ........................................... for Bengal

        2.    Raja Sitab Rai  .............................................................. for Bihar

Clive's justification of Dual System

1.       Open assumption of authority may unite some Indian princes against the company.

2.       The duties on trade assigned by the French, the Dutch to the Nawab would hardly 
      acknowledged the company's Subhaship

3.       Assumption of political power would hamper the England's diplomatic relationship with France, Holland, Portugal and sweden.

4.       Company has not trained man power to run effectively the work of Administration and 
      available Administrators were ignorant of Indian practices, languages, and customs.

5.       Court of Directors also thought that it would adversely affect the trade and profit of the 
       company.

6.       It would pave the way to the British Parliament to interfere with the affairs of the company.

Adverse effects of the Dual System

1.       The Nizamat that is the Administration of the law and order virtually broke down and the administration of justice was reduced to its lowest ebb. Corruption become widespread from 1765 to 1784 under company's regime.

2.       The land revenue was annually framed out to the highest bidder. The tax collectors or 
    contractors had no permanent interest in the land and they rack rented the cultivators, which resulted in to decline of agriculture.

3.       Agriculture depression and privileges of trading duty free in Bengal granted since 1717 
      adversely affected the trade and commerce of the country.

4.       By monopolizing internal trade of India, the Company's servants forced up the prices of raw material like cotton and silk to the disadvantage of Indian producers. the skillful artisans persuaded and the traditional industries deserted as a result of it

5.       Moral degradation also set in Bengal society as their hard-work was being not awarded by sufficient emolument. Hopeless situation made society static, which initiated the process of decay.

   (C)  Administrative Reforms

Civil Reforms -
1.       The servents of the companyinvolved in private trade and missused the 
      company's 'Dustak' to seek exemption from payment of internal trade so Clive 
      compelled the servants to sign 'Covenants' prohibiting acceptance of presents.
      forbade from involving in private trade and made payment of internal 
       duties obligatory.
2.       To compensate the servants of the company for their low salary and 
       loss of income from cessation of private trade Clive formed a
       'Society of Trade' in August 1765 with monopoly of trade in salt, tobacco, 
       and betelnut (Pug). It started systematic plunder of Bengal so Clive 
       abolished society in Jan 1767.

Militery Reforms  -
1.        Clive announced from 1 jan 1766 double allowance would be paid 
        only to officers on service outside the frontiers of Bengal and Bihar 
       against which 'White Mutiny' takes place at Monghyr and Allahabad. 
       Clive effectively tackled with.

Clive was the true founder of British Political dominion in India.
First Governo-General of Bengal. 
Outdid his French adversary Duplex. 
Seige of Arcot(1751), Battle of Plassy(1757), 
against Siraj-ud-Daula. 
Charged for his money weakness in the British Parliment.

K.M.Pannikar said  - 
   "During 1765-1772 the Company established a Robber State in Bengal."