The English East India Company was established on 31 December 1600 as per the Royal Charter issued by the Queen of England, Elizabeth I. The Company had sent Captain Hawkins to the court of the Mughal Emperor, Jahangir in 1608 to secure permission to establish a 'factory' (store house of goods) at Surat. It was turned down initially. However, in 1613, Jahangir issued thefirman permitting the East India Company to establish its first trading post at Surat. Subsequently, Sir Thomas Roe obtained more trading rights and privileges for the East India Company. Accordingly, the English set up business centres at Agra, Ahmedabad andBroach. Slowly the English East India Company succeeded in expanding its area of trade.
n 1639, Francis Day established the city of Madras and constructed the Fort St. George. On the west coast, the Company obtained Bombay on lease from their King, Charles II for a rent of 10 pounds per annum in 1668. By the year 1690, Job Charnock, the agent of the East India Company purchased three villages namely, Sutanuti, Govindpur and Kalikatta, which, in course of time, grew into the city of Calcutta. It was fortified by Job Charnock, who named it Fort William after the English King, William III. The factories and trading centres which the English established all along the sea-coast of India were grouped under three presidencies namely Bombay, Madras and Calcutta.
After the Battle of Plassey in 1757 and the Battle of Buxar in 1764, the Company became a political power. India was underthe East India Company's rule till 1858 when it came under the direct administration of the British Crown. Robert Clive was the first Governor of Fort William under the Company's rule. He was succeeded by Verelst and Cartier. In 1772, the Company appointed Warren Hastings as the Governor of Fort William.
When Warren Hastings assumed the administration of Bengal in 1772, he found it in utter chaos. The financial position of the Company became worse and the difficulties were intensified by famine. Therefore, Warren Hastings realized the immediate need for introducing reforms.
The East India Company decided to act as Diwan and to undertake the collection of revenue by its own agents. Hence, the Dual System introduced by Robert Clive was abolished. As a measure to improve the finances of the Company, Warren Hastings reduced the Nawab's allowance of 32 lakhs of rupees to half that amount. He also stopped the annual payment of 26 lakhs given to the Mughal Emperor.
After the abolition of the Dual System, the responsibility of collecting the revenue fell on the shoulders of the Company. For that purpose, a Board of Revenue was established at Calcutta to supervise the collection of revenue. English Collectors were appointed in each district. The treasury was removed from Murshidabad to Calcutta and an Accountant General was appointed.
became the capital of Bengal in 1772 and shortly after of British India.
The Board of Revenue farmed out the lands by auction for a period of five years instead of one year in order to find out their real value. The zamindars were given priority in the auction. However, certain good measures were taken to safeguard the interests of the peasants. Arbitrary cesses and unreasonable fines were abolished. Besides, restrictions were imposed on the enhancement of rent. Yet, the system was a failure. Many zamindars defaulted and the arrears of revenue accumulated.
The judicial system at the time of Warren Hastings' ascendancy was a store-house of abuses. The Nawab who was hitherto the chief administrator of justice, misused his powers. Often, his judgments were careless. The zamindars who acted as judges at lower levels within their own areas were highly corrupt and prejudiced. On the whole, the judicial institution suffered from extreme corruption.
Warren Hastings felt the necessity of reorganising the judicial system. Each district was provided with a civil court under the Collector and a criminal court under an Indian Judge. To hear appeals from the district courts two appellate courts, one for civil cases and another for criminal cases, were established at Calcutta. The highest civil court of appeal was called Sadar Diwani Adalat, which was to be presided over by the Governor and two judges recruited from among the members of his council. Similarly, the highest appellate criminal court was known as Sadar Nizamat Adalat which was to function under an Indian judge appointed by the Governor-in-Council.
Experts in Hindu and Muslim laws were provided to assist the judges. A digest of Hindu law was prepared in Sanskrit by learned Pandits and it was translated into Persian. An English translation of it - Code of Hindu Laws - was prepared by Halhed.
Warren Hastings abolished the system of dastaks, or free passes and regulated the internal trade. He reduced the number of custom houses and enforced a uniform tariff of 2.5 percent for Indian and non-Indian goods. Private trade by the Company's servants continued but within enforceable limits. Weavers were given better treatment and facilities were made to improve their condition. He also introduced a uniform system of pre-paid postage system. A bank was started in Calcutta. He improved the police in Calcutta and the dacoits were severely dealt with.
The Regulating Act of 1773 opened a new chapter in the constitutional history of the Company. Previously, the Home government in England consisted of the Court of Directors and the Court of Proprietors. The Court of Directors were elected annually and practically managed the affairs of the Company. In India, each of the three presidencies was independent and responsible only to the Home Government. The government of the presidency was conducted by a Governor and a Council.
The following conditions invited the Parliamentary intervention in the Company's affairs. The English East India Company became a territorial power when it acquired a wide dominion in India and also the Diwani rights. Its early administration was not only corrupt but notorious. When the Company was in financial trouble, its servants were affluent. The disastrous famine which broke out in Bengal in 1770 affected the agriculturists. As a result, the revenue collection was poor. In short, the Company was on the brink of bankruptcy. In 1773, the Company approached the British government for an immediate loan. It was under these circumstances that the Parliament of England resolved to regulate the affairs of the Company. Lord North, the Prime Minister of England, appointed a select committee to inquire into the affairs of the Company. The report submitted by the Committee paved the way for the enactment of the Regulating Act.
The Regulating Act reformed the Company's Government at Home and in India. The important provisions of the Act were:
The term of office of the members of the Court of Directors was extended from one year to four years. One-fourth of them were to retire every year and the retiring Directors were not eligible for re-election.
The Governor of Bengal was styled the Governor-General of Fort William whose tenure of office was for a period of five years.
A council of four members was appointed to assist the Governor-General. The government was to be conducted in accordance with the decision of the majority. The Governor-General had a casting vote in case of a tie.
The Governor-General in Council was made supreme over the other Presidencies in matters of war and peace.
Provision was made in the Act for the establishment of a Supreme Court at Calcutta consisting of a Chief Justice and three junior judges. It was to be independent of the Governor-General in Council. In 1774, the Supreme Court was established by a Royal Charter.
This Act prevented the servants of the Company including the Governor-General, members of his council and the judges of the Supreme Court from receiving directly or indirectly any gifts in kind or cash.
The significance of the Regulating Act is that it brought the affairs of the Company under the control of the Parliament. Besides, it proved that the Parliament of England was concerned about the welfare of Indians. The greatest merit of this Act is that it put an end to the arbitrary rule of the Company and provided a framework for all future enactments relating to the governing of India.
The main defect of the Act was that the Governor-General was made powerless because the council which was given supreme power often created deadlocks by over-ruling his decision. However, many of these defects were rectified by the Pitt's India Act of 1784.
Warren Hastings was known for his expansionist policy. His administration witnessed the Rohilla War, the First Anglo-Maratha War and the Second Anglo-Mysore War.