The Act of Settlement 1781 & The Pitt’s India Act (1784) | History Optional for UPSC (Notes) PDF Download

Introduction

• The Act of Settlement, also known as the Declaratory Act of 1781, was an amending legislation passed by the British Parliament on July 5, 1781. It aimed to rectify the deficiencies of the Regulating Act of 1773.
• The primary goal of the Act of Settlement 1781 was to establish a system of courts to address grievances against the Supreme Courts and to mitigate the failures of the Regulating Act 1773 in controlling administration through judicial mechanisms.

Circumstances Leading to the Act of Settlement

• Despite the significant changes brought about by the Regulating Act of 1773 in regulating affairs and the judiciary, there were notable loopholes that persisted. The Act of Settlement 1781 was enacted to address these defects.
• Serious issues arose during Warren Hastings' administration, exemplified by cases such as Patna, Cosijurah, and particularly the Nand Kumar case, where Nand Kumar was executed. These instances attracted substantial criticism towards Hastings' administration.
• A significant conflict between the Supreme Court and the Governor-General in Council disrupted the balance of administration.
• Interference in the personal laws of various communities caused public agitation.
• In 1777, the directors of the company lodged a complaint against the Supreme Court, claiming difficulties in administration. In response, the House of Commons established the Touchet Committee to investigate the administration in Bengal, Bihar, and Odisha.
• The findings of the Touchet Committee ultimately led to the enactment of the Act of Settlement in 1781.

Aims of the Act:

• The main objectives of the Act were:
• To clarify ambiguities in certain provisions of the Regulating Act and the Charter that had caused a rift between the court and the government.
• To support the legitimate government of Bengal, Bihar, and Orissa to facilitate smooth revenue collection.
• To safeguard and uphold the laws and customs of the native populations.

Key Provisions (features) of the Act

Change in the powers of the Supreme Court:

• The servants of the company, who were previously under the jurisdiction of the Supreme Court, were exempted from it.
• The Act limited the court's geographical jurisdiction to Calcutta only.

Non-interference in Revenue matters: The court no longer had jurisdiction over revenue matters, making the government independent in these matters.

Shift of Appellate Jurisdiction: Appellate jurisdiction shifted from the court to the Governor-General and Council, with appeals going from Provincial Courts to the Governor-General in council.

Application of Personal Laws: The Act asserted that Mohammedan law should be applied to Mohammedan cases and Hindu law to Hindu cases.

Impacts of the Act of Settlement:

• The Act gave superior authority to the council over the court, strengthening the council's position.
• It marked the first attempt to separate the executive from the judiciary by defining their respective areas of jurisdiction.
• Despite these changes, the Act did not have a significant impact and did not rectify all the flaws of the Regulating Act of 1773.

Defects of Act of Settlement, 1781:

• The Governor-General lacked veto power and was accountable to the directors for all administrative acts in India, without independent authority to adjudicate.
• The Governor was effectively subordinate to the Governor-General.
• There was confusion regarding the powers and jurisdiction of the Supreme Court.
• The Act did not address the concerns of people of Indian origin, who were the primary victims.
• The issuance of writs caused confusion within the jurisdiction of the Supreme Court, with varying provisions in the charter.

Pitt's India Act (1784)

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  • The East India Company Act of 1784, commonly known as Pitt's India Act, was enacted by the British Parliament to rectify the issues of the Regulating Act of 1773.
  • It aimed to bring the East India Company's governance in India under greater British government control.
  • Pitt the Younger, who became the youngest Prime Minister of England at 24 in 1783, was instrumental in this reform.
  • He was known for his efficient administration and efforts to introduce a new generation of capable administrators.
  • Background:
  • The British Government initially implemented the Regulating Act in 1773 to oversee the East India Company's activities.
  • This Act established a supervisory system over the Company's operations without transferring power to the government.
  • However, it proved ineffective within a few years, prompting the government to seek a more active role in the Company's affairs.
  • In 1781, both a Select Committee and a Secret Committee were formed to investigate the Company's operations.
  • The Select Committee focused on the relationship between the Supreme Court and the Council in Bengal.
  • The Secret Committee examined the causes of the Maratha War.
  • Their extensive reports were used as ammunition against the Company by parliamentary orators.
  • Parliamentary intervention in the Company's affairs was once again deemed necessary.
  • This came especially when the Company Directors admitted their financial distress due to the war.
  • They sought another loan of a million pounds from the State.
  • Pitt's India Act established a system of dual control over India by the British government and the British East India Company.
  • This system remained in place until 1858.

Provisions of the Pitt's India Act (1784)

• The Act did not alter the Company's territorial possessions but placed its public affairs and administration in India under closer government oversight.
• The Pitt's India Act of 1784 separated the East India Company's political functions from its commercial activities.
• The Company, which had previously operated with a degree of sovereignty, was made directly subordinate to the British government in political matters.
• Board of Control: A Board of Commissioners, known as the Board of Control, was established to oversee the Company's political activities.
• Members of the Board: The Board consisted of six members, including the Chancellor of the Exchequer, the Secretary of State, and four Privy Councilors nominated by the King.
• The Secretary of State served as the President of the Board of Control.
• Authority of the Board: The Board was empowered to control all civil, military, and revenue matters.
• The Board had access to the Company's records and could send and alter Governors in India.
• Outcome of the Board of Control: The Act established a joint government in India between the Company and the British Crown.
• The Company was represented by the Court of Directors, while the Crown was represented by the Board of Control.
• A Secret Committee of three Directors acted as a link between the Board of Control and the Court of Directors, transmitting orders to India.
• The Court of Proprietors lost the right to rescind, suspend, or revoke any resolution approved by the Board of Control.
• The Board of Control had no independent executive power and was not involved in patronage.
• The Board's approval was necessary for all non-commercial dispatches, and in emergencies, it could send its own draft through the Secret Committee.
• The Court of Directors retained their patronage and the right to dismiss their servants.

In India

• The Governor General of India was given more power, with a council of three members. One of these members had to be the commander-in-chief of the King's army in India.
• The Governor General could cast the deciding vote in case of a tie in council meetings. Although he could still be overruled by the council, his casting vote allowed him to prevail if he had at least one supporter.
• The Act of 1784 placed the presidencies of Madras and Bombay under the authority of the Governor-General and Council of Bengal in matters of diplomacy, revenue, and war, making Calcutta the effective capital of British possessions in India.
• The Governor General and his council were subject to the Court of Directors and the Board of Control, establishing a clear hierarchy and direct parliamentary control over Indian administration.
• Only covenanted servants could be appointed to the Governor-General's Council, as previous experiments with outsiders had failed.
• The Act prohibited aggressive wars in India and treaties of guarantee with Indian princes, although this was often ignored in practice.
• After the Pitt’s India Act of 1784, there was a temporary parliamentary prohibition on imperial expansion, focusing instead on protecting British possessions and promoting trade.
• This cautious policy changed with Lord Wellesley becoming Governor General in 1798, who pursued a strategy of conquest.
• All civil and military officers of the East India Company had to provide a full inventory of their property in India and Britain to the Court of Directors within two months of their appointment. Corrupt officials faced severe penalties.
• The constitution established by Pitt’s India Act remained largely unchanged until the end of the Company's rule in India in 1858.

Assessment of Pitt's India Act 1784

• Pitt's India Act of 1784 brought significant changes to the structure of the British East India Company.
• It created a Board of Control in England to oversee the Company's policies, establishing a Dual System of government that lasted until 1858.
• The Act subordinated the Company's civil and military government to the British government.
• It corrected issues from the Regulating Act of 1773 by making the Governor-General supreme over the Bombay and Madras governments.
• By reducing the Governor-General's Council to three members, it made decision-making easier and gave the Governor-General the final say in case of a tie.
• Pitt's India Act set the framework for the Company's governance in India and Britain until 1858.
• The Act was seen as a political compromise, skillfully balancing interests.
• However, it had flaws, such as creating confusion between the powers of the Board of Control and the Court of Directors.
• The division of responsibilities was unclear, leading to ineffectiveness and disputes.
• The Act was viewed as a failure because the boundaries between government control and the Company's powers were vague and subjective.
• Despite its intentions, the Act highlighted the challenges of governing British-occupied territories and the complexities of the British administrative system in India.
• The British Government felt compelled to address humanitarian concerns regarding the treatment of local populations in British-controlled areas.
• The Board of Control faced accusations of nepotism in its operations.

The Act of 1786

• In 1786, a supplementary bill related to India was presented in Parliament by Pitt to persuade Cornwallis to accept the position of Governor-General in India.
• Cornwallis sought to hold the powers of both the Governor-General and the Commander-in-Chief. The new Act addressed this by making the Governor-General also the Commander-in-Chief.
• This change allowed Warren Hastings to simultaneously hold both positions for the first time.
• The Act established an effective and authoritarian system of control that remained in place until 1858 with only minor modifications.
• The Governor-General was also granted the authority to override his Council in exceptional cases, acting on his own responsibility.