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 1/4th 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.
