Charter Acts of Company (1793 to 1858) and Its Criticism!

Charter Act of 1793:

By the Charter Act of 1793, the Company’s commercial privi­leges were extended for a further period of twenty years. Lord Cornwallis was given special power at the time of his appointment, to override his Council but it was not extended to all Governors or Governors-General by the Charter of 1793.

Greater emphasis on the power of the Governor-General over the other two Presidencies, Bombay and Madras, was given in the Charter Act of 1793.

The Governor-General was given the power to appoint a-Vice-President to act in his place during his absence from Bengal, from amongst the civilian members of his Council. When the Governor-General would be present in Bombay or Madras he was to supersede the local Governor as the head of the administration during the period of his stay there.


The Charter Act of 1793 also effected some change in the Home Government. The Board of Control was to consist of a senior mem­ber who was designated as President and two other junior members were not necessarily to be members of the Privy Council. All mem­bers of the Board of Control were to be paid their salaries from the Indian revenues and not out of the British Exchequer.

Charter Act of 1813:

On the eve of the renewal of the Charter Act in 1813 a controversy was raised as to whether the Company should continue to enjoy commercial monopoly in India. English traders demanded a share in the Indian trade, particularly in view of loss of trade in the Conti­nent due to the Continental System of Napoleon Bonaparte who sought to cripple England commercially.

The English traders want­ed to compensate their loss by sharing the Indian Trade. It was also thought if the East India Company which had vastly extended its territories in India should be allowed to continue as a monopolis­tic trading Company besides its political responsibility; it was ulti­mately decided that the Company’s commercial monopoly should go and by the Charter Act of 1813 the Company was deprived of its commercial monopoly and laid down ‘the undoubted sovereignty of the Crown’ in and over the possessions of the East India Company.

The East India Company was, however, allowed to enjoy the monopoly of China trade and trade in tea. The share-holders of the East India Company vehemently opposed abolition of Com­pany’s commercial monopoly and ultimately a guarantee of 10i% dividend out of the revenues of India was given them should the commercial account fail to provide this amount. Separate accounts were to be maintained of the territorial revenues and commercial transactions and gains.


The Charter Act of 1813 devised as well as extended the power of direction and superintendence of the Board of Control. One of the most important clause of the Charter Act of 1813 was that a sum of rupees one lakh annually was provided for the revival and improvement of literature and encouragement of the learned natives of India and for the introduction and promotion of knowledge of the sciences among the inhabitants of the British territories in India. This was the first step towards acceptance of the principle of State responsibility for education. Needless to say, that this clause was one of the most significant steps taken by the British Government with regard to India.

The evangelicals forced the Company, by getting included in the Charter Act of 1813 to appoint a bishop whose headquarters were to be in Calcutta and his see the whole of British India. The whole of the country (India) was to be open to the Christian missionaries.

Charter Act of 1833:

Before the time of the renewal of Charter arrived great changes had taken place in Great Britain. The result of the Industrial Revo­lution showed itself in the coming of Machine Age in Britain and unprecedented hugeness of production of finished goods which were being exported to foreign countries. There was a great influx of wealth through export trade. The labouring class began to agitate for improvement of their economic condition. With the coming of the Whigs to power in 1830 the way for the triumph of liberal prin­ciples was opened. Laissez Faire was accepted as the principle of government’s attitude towards industrial enterprise. The liberal movement resulted in the Reform Act of 1832.

In this atmosphere of liberalism and reforms the Parliament was called upon to renew the Charter in 1833. There was a wind­ing up of the Company and the British Crown should take over the administration of India. But majority opinion in the Parliament did not share this opinion which agreed with Lord Macaulay’s conten­tion that the Company would continue to exist with certain changes in matters of control and the renowned historian James Mill, a Ben­thamite, was also associated with the India House. The Charter Act of 1833 is replete with their personal influence.


The Charter Act of 1833 gave another lease of life for twenty years to the East India Company which was to administer the Indian territories “in trust for His Majesty, his heirs and successors”. The Company’s commercial privileges were all abolished and henceforth it was to function as a political organisation. India was to pay the Company’s debts and the Company’s share-holders were to receive 10½% dividend per annum till 1874 as compensation for the aboli­tion of the Company’s Commercial privileges.

The Directors of the Company were to enjoy the right of patronage to a limited extent, their nominations to seats in Haileybury College would be twice the number of vacancies in services of the Company. Those joined the Haileybury College were appointed to the Company’s services on merits and only the topmost among them were selected to fill in vacancies. This loss of patronage so long enjoyed by the Directors who would select persons for appointment to Company’s services became a sore point with the Directors and the great row it gave rise to led to an amendment to the Charter Act of 1833 in 1834 by which the patronage of the Directors was conceded for another twenty years.

Under the Charter Act of 1833, the President of the Board of Control became Minister for Indian affairs. Other members of the Board were not to continue but the Minister was to have two Assis­tant Commissioners who were not to be his colleagues but only his assistants. The Secretary to the Minister occupied considerable power as he represented and spoke in the House of Common on behalf of his boss when the latter sat in the House of Lords. All this was a prelude to the appointment of the Secretary of State for India. The Directors of the Company were to act as expert advisers to the Presi­dent of the Board of Control.

The Charter Act of 1833 centralised the Indian administration and the Governor-General of Bengal was now made the Governor-General of India. The Governor-General in Council was empowered to superintend, control and direct both the civil and military affairs of the Company.

The Presidencies of Calcutta, Bombay and Mad­ras and other territories of the Company were placed under the fullest control of the Governor-General in Council and all revenues were to be raised under the authority of the Governor-General in Council and expenditure was also to be controlled by the same body. All powers—administrative and financial—were centralised in the hands of the Governor-General in Council.

Before the Charter Act of 1833 there was much confusion in the administration of law and justice as there were diverse laws of conflicting nature in force. For instance, the Acts passed by the British Parliament, the Charter Acts, laws made by the Governors-in-Council of different Presidencies, orders of the Supreme Court which differed in many respects and were even conflicting in some cases and there was no uniformity between the laws passed by dif­ferent Presidencies.

All this created much confusion in the adminis­tration of law and justice. “The result was utter chaos and confu­sion in administering criminal law” in particular. Influx of a large number of Europeans who settled in different parts of India made it all the more necessary that a uniform system of law should be intro­duced. The Charter Act of 1833, therefore, provided that the Governor-General in Council would make laws for India, and the for­mer law-making powers of the Bombay and Madras Presidencies were abolished.

The laws passed by the Governor-General in Council were to be enforced by all law courts in British Indian territories. The Governor-General in Council was also empowered to amend, repeal or otherwise modify laws passed hitherto before as also make laws for all the servants of the Company, whether residing within the Com­pany’s territories or in the territories under the native Princes in alliance with the Company.

Code of Military conduct and disci­pline, Articles of War as well as making provisions for the adminis­tration of justice were all placed within the powers of the Governor- General in Council which was not, however, empowered to alter the constitution of the Company or amend the Charter Act, nor could it alter the prerogatives of the Crown nor enact against laws passed by the Parliament or do anything that would militate against the autho­rity of the Parliament. The Mutiny Act was also beyond the Gover­nor-General in Council.

The Charter Act of 1833 enlarged the Executive Council of the Governor-General by adding to it a fourth member—Law Member, for legislative purposes only and the fourth member was to give professional advice to the Council in matters of law-making, and could cast his vote only for the purpose. A special arrangement was, however, made in case of Lord Macaulay who was the first Law Member and he was permitted to attend all meetings of the Gover­nor-General in Council. A Law Commission was formed for the purpose of consolidating, codifying and improving the Indian Laws.

One of the most important provisions of the Charter Act of 1833 was that it removed the distinction between Indian and the natural born subject of the British Crown residing in India and no one would be disqualified for any place in the Company’s service by reason of his religion, place of birth, descent, or colour. As the Directors pointed out the aim of this provision was not to ascertain qualification but to remove disqualification. There was to be no governing caste in British India and whatever might be the test of qualification, “distinction of race or religion shall not be there”. Fit­ness would be only criterion of eligibility.

It may be pointed out that this provision removed the short-sighted policy of excluding Indians from the high posts in the Company’s service which was also endorsed in the Charter Act of 1793. The Act of 1833 also en­joined upon the Government of India to take measures for the abo­lition of slavery and improvement of the condition of the slaves. This provision was acted upon in 1843.


The Charter Act of 1833 by abolishing the Company’s commer­cial monopoly altogether completed the earlier step in this regard taken by the Charter Act of 1813. This gave opportunity and direc­tion to the Company to concentrate on administration. The sepa­ration of administration from commercial speculations “gave a more elevated tone to the views and policies of the Court of Directors” and imparted a “mere efficient character to their administration”, observed Marshman.

Confusion and imperfection in the laws were removed by arrang­ing for a uniform policy of law-making and administration of justice.

The Law Commission appointed in pursuance of the Act of 1833 with Macaulay, the first Law Member, prepared the Indian Penal Code which as Alfred Lyall remarks “is a standing tribute to Macaulay’s legal acumen and proficiency”. Besides the Penal Code the Commission codified the Civil and Criminal Procedures. These Codes simplified the substantive and procedural laws of the land.

The Apt by abolition of distinction between the subjects by reason of caste, birth, race or religion in matters of appointment to services of the Company had done away with the most glaring injus­tice done by Lord Cornwallis and the Charter Act of 1793 by ex­cluding the Indians from the high posts of the Company’s services. This declaration of equality of the subjects became the sheet-anchor of Indian political agitations in the subsequent history of India.” Abolition of slavery was also a very commendable feature of the Act of 1833.

Charter Act of 1853:

As the time of the renewal of the Charter was approaching, a demand was voiced that the parallel arrangements in England for the administration of the Company through a Board of Control and a Court of Directors should be abolished as it was both cumbersome and wasteful, and often led to unnecessary delay.

The Presidencies of Calcutta, Bombay and Madras in a petition demanded appointment of a Secretary of State for India with a Council to deal with all mat­ters relating to India. The legislative machinery provided by the Charter Act of 1833 having been found inadequate better arrange­ments were demanded.

It was also pointed out that the Governor of Bengal must not be the Governor-General of India simultaneous­ly, for in that case the Governor-General was likely to be a little partial to Bengal. Between the Charters of 1833 and 1853 Sind and the Punjab had been annexed to the Company’s territories (in 1843 and 1849) and a number of Indian States had been annexed to the Com­pany’s territories by Lord Dalhousie, Burma and Pegu likewise had been annexed. Constitutional changes were naturally called for in order to meet the changed situation due to vast annexations. There was also a demand for decentralisation of powers and giving the Indians share in the management of their own affairs.

The demand had moral support in a section of the people of England itself. Lord Derby in his speech in the Parliament in 1852 remarked “it is your bounden duty in the interest of humanity, of benevolence and of morality and religion’ that as fast as you can do it safely, wisely and prudently, the inhabitants of India should be gradually entrusted with more and more of superintendence of their own internal affairs”. In the same year (1851) the Parliament had appointed two Com­mittees to go into affairs of the Company. The two committees sub­mitted their reports on the basis of which the Charter Act of 1853 was enacted.

The Charter Act of 1853 renewed the authority of the Company and allowed it to retain possession of its Indian territories to be “held in trust for Her Majesty (Queen Victoria) and her heirs and successors”, until the Parliament should otherwise decide. Thus no specific time was allotted to the Company to retain its powers and authority as was done in earlier Charters.

The Act provided that the salary of the members of Board of Control, its Secretary and other officers would be fixed by the Bri­tish Government but the payments would be made out of the Com­pany’s funds.

The number of the Directors of the Court of Directors was re­duced from 24 to 18 of whom 6 were to be nominated by the Crown. The Court of Directors was divested of its right to patronage and Company’s services were thrown open to competition and no dis­crimination of any kind was to be made. A committee with Macau­lay was formed in the’ following year (1854) to give effect to the scheme of appointment through competition.

The Court of Directors was, however, permitted to constitute new Presidencies or to alter the boundaries of the existing Presidencies in order to incorporate the newly acquired territories of the Com­pany. Pursuant to this provision a Lieutenant Governor’s Province was created for the Punjab after a few years.

The Act empowered the British Crown to appoint Law Com­mission in England to examine the drafts and reports of the Indian Law Commission which had ceased to exist by then.

Law member was now made a full member of the Governor-General’s Executive Council and this Council’s membership was en­larged by inclusion of six members who would sit in the Council when it would function in its legislative capacity and a puisne judge of the Supreme Court at Calcutta and one each from Bengal, Mad­ras, Bombay and North Western Provinces. The representatives from the Provinces were to be civil servants of not less than ten years’ standing.

The Governor-General was empowered to appoint two civil servants to the Council. This provision was, however, not acted upon. The procedure of the Governor-General’s Council in matters of legislation was to be same as followed by the British Parlia­ment. Questions could be asked and the policy of the Executive Council could be discussed.

The Executive Council was, however, given right to veto a bill passed by the Council in its legislative capa­city. Legislative business was conducted in public and the discus­sion was oral. Bills were referred to Select Committee rather to any individual member.


The Act of 1853 struck a balance between the two opinions strongly voiced before the renewal of the Act, namely, one which wanted the Company to retain its authority over its territories and the other which wanted the Crown to step in.

The Act allowed the Company to retain its authority over its territories not for another twenty years or specified time but until the Parliament would decide otherwise. The number of the members of the Court of Directors was reduced to 18 from 24 and out of the 18 six were to be Crown nominees. Thus both the views were more or less met by the Act of 1853. The Directors also lost their privilege of patronage.

The Legislative Council contrary to the intentions and expecta­tions of the Indian and British opinions relegated itself into an “Anglo-Indian House of Commons” questioning the Executive and criticism its actions and compelling it to lay all confidential papers before the Council.

It also did not get its legislative plans passed by the Secretary of State before considering it and at times even refused to pass legislative measures required either by the Court of Directors or the Secretary of State. It asserted independence in matters of legis­lation. Charles Wood, President, Board of Control felt very much disturbed at the turn of events and in order to emphasize the inten­tion behind the Act, declared that he did not intend the Legislative Council, as some of the young Indian had thought to be “the nucleus and beginning of constitutional Parliament in India”. Lord Dalhousie, however, contended that the Legislative Council did not exceed the rights conferred on it by the Act of 1853. The fact remains that Charles Wood could not limit the consequences of the Act of 1853. This Act created a functioning Legislative Council and was decidedly a very important constitutional measure of the nineteenth century.

The defect of the Act of 1853 was its exclusion of the Indians from the Legislative Council and Sir Bartle Frere’s’ apt remark is worth quoting: “The perilous experiment of continuing to legislate for millions of people with few means of knowing except by rebellion, whether the laws suit them or not”. All the same Act of 1853 was an important measure in the history of British India.

Charter Act of 1858:

The Charter Act of 1853 by extending Company’s authority over its territories until the Parliament would decide otherwise kept it open for the Parliament to step into authority over the Company at any time. The revolt of 1857-58 offered the opportunity as the demand for divesting the Company of its authority over the Company’s terri­tories.

This time the demand could not be allowed to go un-headed and the control of the Company’s territories was transferred to the Crown both in “appearance and authority”. The Company protested against this decision in a petition drafted by John Suart Mill in which the services rendered by the Company in laying the foundations of the Indian Empire had been recounted. It was claimed that while the British Crown was losing control of an empire on the other side of the Adantic, i.e., America, the Company had laid the foundations of a vast empire in India.

It was also pointed out that taking over directly of the Government of India by the Crown would be attended by many dangers and it was not likely to be more free from error if the administration of India was conducted by a Minister and if it was run without the aid of the Court of Directors.

The Chairman of the Court of Directors Ross Mangles expressed his surprise that the Com­pany was divested of its political power without a Parliamentary en­quiry and asserted that “an intermediate non-political and perfectly independent body like the Company was an indispensable necessity for good government of India”.

All these protests .and assertions were unavailing and Lord Palmerston introduced the bill for the Better Government of India in February, 1858 in which his plea was that the principle all adminis­trative functions should be accompanied by ministerial responsibility to Parliament but the functions of the Government of India were com­mitted to a body not responsible to the Parliament, not appointed by the Crown but elected by persons who have no more connection with India than consists in the simple possession of so much Indian stock” Before the Bill was passed into an Act Palmerston Ministry was thrown out and Lord Derby with Disraeli as Chancellor of Exchequer came to power. The Act was passed under this ministry and received royal assent on August 2, 1858.

The Act laid down that “India shall be governed by and in the name of the sovereign through one of the Secretaries of State (namely Secretary of State for India) assisted by a Council of 15 members”. The Secretary of State for India was to exercise all powers so long exercised by the Court of Directors and the Board of control. In this way the double government, i.e., the control of the Company by the Court of Directors and the Board of Control as introduced by Pitt’s India Act, 1784 was abolished.

Of the 15 members of the Council of the Secretary of State 8 were to be appointed by the Crown and 7 to be elected by the Court of Directors. At least 50 per cent of the members of the Council must have served in India for not less than 10 years and must riot have been away from the Country for 10 years at the time of appoint­ment. In case of vacancies among Crown nominees would be filled in by the Crown and those among the nominees of the Court of Direc­tors would be filled in by the Council by co-option.

The members would continue to be in office during good behaviour and could be removed on petition by both Houses of the Parliament. The Council was to function more or less in an advisory capacity and initiative and final decision lay with the Secretary of State. Another provision of the Act was to invest the Governor-General with the title Viceroy and he became direct representative of the Crown in India.

The prestige and status of the Governor-General was increased manifold. Patronage was divided between the Crown and the Secretary of State in Council and the authorities in India. Appointment to the Civil Service was to be made by open competition under rules to be framed by the Secretary of State with the help of the Civil Service Commis­sioners. The Secretary of State was declared a legal person who could sue and be sued in England and India.


The situation that the Act of 1858 had ratified was culmination of what had been in the process since 1813. The Act of 1858 only made a formal change rather than any substantial change, for already the legitimate authority of the Crown on the Company’s territories had been systematically emphasised. It has been rightly observed that the Company as a political power had long been dead, what the Act of 1858 did was to give its corpse a decent burial. “When the British Government stood frankly forth as responsible for the welfare of India, it was as if a ventriloquist were to throw aside his absurd doll and speak in natural voice”. The Act of 1858 only got rid of the form which had for all practical purposes had become meaningless.

As the Parliament assumed full control of the Company’s Indian territories it felt satisfied since a Secretary of State had been placed in charge of the Indian possessions who was answerable to it. This brought about a sense of complacency and consequent slackening of former control and willing supervision by the Parliament. It was, of course, true that the Secretaries of State for India were far able person than the members of the Board of Control. But Parliamentary control over the affairs of India had slackened from the very beginning and there was a growing tendency of trusting men on the spot.

Charter Act of 1833:

At the time of the renewal of the Charter in 1833, the British industrial and the merchant firms put up demands for freedom of trade to all British industrialists and merchants, and abolition of the monopoly of the Company’s trade in opium with China. The Parliament had in the mean time (1829) appointed a Select Com­mittee to submit report on the Company’s work in India. The Select Committee submitted its report in 1832.

The Opposition in the Parlia­ment demanded abolition of the Company’s authority on the territories acquired in India and establishment of British Government’s direct authority instead. But the British Government granted the Company trading right in India for a further period of twenty years and allowed the Company to administer the territories acquired in India, on behalf of the British Crown.

The Company’s monopoly in opium trade with China was not, however, renewed. Thus by the charter. Act of 1833 the Company was transformed into a political organisation.

The Indian administration was now permitted to enact laws; for­merly it could only pass Regulations. The Governor General of Bengal was now given the designation of Governor General of India. The Madras and the Bombay Councils were no longer permitted to enact any legislative measure. The Europeans were now permitted to acquire landed properties in India.

This gave a spurt to Indigo cultivation by the Europeans by acquiring landed properties in the rural areas of India, in Bengal in particular. With the increase in indigo cultivation there was increase in inhuman torture of the indigo cultivators who were compelled to cultivate indigo in their paddy lands. The torture of the indigo cultivators was the theme of Dinabandhu Mitra’s Nil Darpan. Ultimately the indigo cultivators revolted against the indigo planters during 1859-60.

The Charter Act of 1833 increased the membership of the Gover­nor General’s Council from four to five and the Law Member who was now appointed was to be the fifth member (ex-officio). This charter also permitted the creation of a new province called North-West Frontier Province with Agra and the neighbouring areas. This province was not, however, created.

The Charter Act of 1833 also laid down that no distinction would be made on the basis of race, religion, birth or caste in appointment of the Indians to Company’s service.

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