HL Deb 20 March 1832 vol 11 cc488-97

On the Order of the Day being read for the second reading of the Bill relative to the claims of the creditors of the Zemindar of Nozeed, against the East-India Company, counsel were heard.

Lord Wharncliffe

moved, that this Bill be read a second time, in order that it might go into Committee, so that the promoters of it might have an opportunity of stating more particularly the circumstances of the case, and that those circumstances might be submitted to inquiry. It appeared to him, that to that extent—the going into a Committee—a sufficient case had been been made out. He would very shortly notice the objections which had been urged at the Bar against the second reading of this Bill; the principal allegation being, that the person who now came forward to claim the payment of this money was the representative of an individual who was a servant of the East-India Company, and who, in that capacity, had no right to make a loan to the Zemindar of Nozeed, and that his conduct in that respect had vitiated his claim. There had been an order made by the Company, that no servant of theirs should engage in such transactions; but, previous to the year 1779, it was very apparent that this order was not very rigorously enforced; and it was also clear, from the conduct pursued by the government of Madras, that it did not wholly discountenance the transaction in question; because, when the security was taken from Opparrow, the Zemindar of Nozeed, in respect of the loan, and under which the parties now claimed, they took care that the facts should be communicated to those who then exercised the government of India. It was matter of history, that Lord Macartney was sent out to Madras for the purpose of putting an end to the notorious abuses which then existed in that presidency, and he (Lord Macartney) had a very strong impression that no transactions of this sort should be permitted to exist. He, consequently, called upon the parties to give up certain villages which they then held as mortgagees in possession, and he said, if they were immediately given up, he would recommend their claim to the favourable consideration of the East-India Company: therefore, even supposing that this person lent this money as a servant of the Company, the circumstance of the Governor and Council of Madras having acknowledged the right to do so, did away, in a great measure, with the misconduct of the servant in the first instance. In consequence, therefore, of the representation of my Lord Macartney, this gentleman being in possession of these villages as mortgagee, upon giving them up, relinquished the security which he had against the Zemindar; and he would contend, that as there were large revenues in the hands of the Company, arising from the possession of this property, out of those revenues the demands of the representative of Mr. Hodges ought to be paid. These circumstances must have been all very well known to the East-India Company; because, in 1803, the Company called for a further statement of all the facts and circumstances connected with the transaction, and after that further statement, they restored this property to the descendants of Opparrow, without intimating any opinion as to the illegality of the claim made in respect of this loan. Sufficient was shown to allow this Bill to go into Committee, in order that the promoter of it might be permitted to establish these facts by proof. But then the counsel on behalf of the East-India Company said, that that which was done by the Governor and Council of Madras, in respect of this matter, was never confirmed and approved by those exercising the government of India at home. In answer to that observation he would say, that if the transaction in question had been so confirmed and approved, and if the Directors had acted as Lord Macartney held out the hope that they would, in that case there would have been no occasion for this Act of Parliament. The promoter of this Bill said, relief was held out as likely to be afforded on the performance of certain conditions: those conditions were performed, and all he now did was, to call upon the East-India Company to perform their part of the agreement. But what said the Company? They would give no relief at all; they would have nothing whatever to do with the matter; and, therefore, the promoter of this Bill ought to be put in a situation to prove these facts before a Committee of the House. Another argument had been used with respect to the time which had elapsed. It was quite true, that if a person slept upon his rights, and allowed a great number of years to pass away without bringing forward! Us claim, then, undoubtedly, it raised a strong suspicion as to the legality of it, and, by his own laches, he might be debarred of the remedy he prayed. But that was not the case here, because this claim had over and over again been pressed upon the notice and consideration of the East-India Company, for the purpose of inducing them to come to some arrangement with respect to it; and there was no fair ground for refusing to go into a Committee, where alone the promoter of this Bill could prove his case. He, therefore, trusted that their Lordships would not, in consequence of what had fallen from the counsel in opposition to the Bill, refuse to give it a second reading, but that they would, by reading it a second time, afford the person in question the opportunity of proving his case before a Committee of their Lordships' House.

Lord Ellenborough

said, that, in rising to move an Amendment—that this Bill be read a second time this day six months, he found himself placed in a situation of some difficulty, because he had supposed, even up to the moment that he entered the House that evening, that he should have been enabled to refer to the documents produced in another place, in reference to this Bill. He found himself, however, mistaken in supposing he could take advantage of those documents. But if he had been allowed the opportunity of refering to them, be should not have had the least difficulty whatever in persuading their Lordships to agree in opinion with him, that this Bill ought not to be read a second time. Under these circumstances, be found himself reduced to the necessity of referring to the preamble of the Bill, in order to find that upon which to found his reasons for asking their Lordships to refuse their acquiescence to the second reading. In spite of this difficulty, he considered it to be his duty to endeavour to convince their Lordships that, on their own showing—on the showing of the very promoters of this measure—it could not, and ought not, to pass into a law. The first circumstance which was stated in this Bill was this—that the individual on whose account this claim was made by his representative, was an original claimant for advances made by himself, and also in respect of a debt assigned over by others to him, for monies advanced to Opparrow, the Zemindar of Nozeed—this individual being at that time a member of the Council of Mazulipatam, and, from the nature of that appointment, specially intrusted, as a member of the Council of the Presidency of Madras, with the finances belonging and appertaining thereto; and it further appeared, that he was at the same time engaged in negotiating loans with the Zemindar, who was a party paying tribute to the East-India Company. It was also stated, that the Zemindar, by means of these loans, was enabled to pay such tribute to the Company; but it was shown, that these aids enabled him to persevere in a course of extravagance, ruinous to himself, and seriously injurious to the interests of the country, and of the India Company. How it happened that he was permitted to pursue such a course did not appear; and there was no allegation that the supplying of these loans was sanctioned by the Court of Directors, although it was stated, in a subsequent part of the Bill, that they were sanctioned by the local governments of Mazulipatam and Madras. But what he wanted to know was, how, even supposing these governments had so sanctioned these advances, that sanction could found a legal claim as against the East-India Company? He would deny the competency of the authorities of Mazulipatam to hind the Council of Madras, and the competency of either of them, individually or united, to bind the East-India Company. There was no person, however supreme in India, who could bind the Court of Directors. Nothing could be done by the subordinate governments of India, which might not be done away with by an order from the Board of Directors in this country; and that, too, at any period of time. If this principle was not admitted, a deadly blow was struck at once at the bond of union which existed between the governments, and the foundation upon which the peace, the happiness, and the prosperity of the people of India rested was endangered. For the short period that he had the honour of presiding at the Board of Control, he always thought the acknowledgment of this principle was essential to the welfare of India, and he had acted upon it accordingly. It was impossible to conceive that any government could feel itself authorised to sanction these loans, be- cause, allowing, for a moment, that they had been made only to the extent of enabling the Zemindar to pay his tribute, their advance would have been contrary to every principle of right and common justice; but there prevailed, throughout all the evidence, as to this transaction, proof so strong of the denial of any such sanction on the part of the Directors, as rendered this ground of claim null and void. He now came to the fact upon which the only probable ground of claim could be for a moment refused, namely, the transactions which occurred when Lord Macartney took upon himself the office of Governor of Madras, in 1783. In point of fact, these supplied the only ground upon which the claim rested; but, as he was not permitted to refer to the previous circumstances, as detailed in the documents produced elsewhere, he would not more particularly allude to the reluctance which Lord Macartney felt as to recommending this claim to the favourable consideration of the Court of Directors all he would say was, that that noble person was wholly unauthorized by the Company to do that which could stamp the claim with legality. His noble friend had said, that the parties who made these loans were mortgagees in possession. If their Lordships would afford him the opportunity, he would state bow far they were mortgagees, and how they came into possession of these villages, which were said to have been mortgaged to them. He would not, however, refer to facts which happened prior to the year 1779, but merely observe that, in the year 1779, the authorities of Mazulipatam were ordered to pay particular attention to the situation in which the Zemindar of Nozeed stood in respect of his payment to the Company; and, on the 5th of April of that year, the answer from the government of Mazulipatam, to the government of Madras, was this—that they had sequestrated the estates of the Zemindar, in consequence of his being unable to pay his tribute. The creditors were distributed into two classes. The first class of claims upon the Zemindar comprehended those of Mr. Hodges, and others, who contended that their claims ought to stand distinct from all others, on the ground that these loans had been effected advantageously for the interests of the East-India Company; and the second class of claims comprehended debts of much greater antiquity. There was also an annual allowance to be made to the Zemindar, out of his revenues, for his sub- sistence. And, after the payment of the tribute due to the Company, and these payments to the Zemindar, being satisfied, the surplus, whatever it might be, should go to the creditors of the first class. This arrangement was made by the government of Mazulipatam, and was acquiesced in by the government of Madras; but that arrangement was never communicated to the Court of Directors until six years after it had been so made. Under that arrangement, all the territories of the Zemindar were leased to a native; and this person agreed, after paying the tribute, &c., to fulfil the several conditions to which he (Lord Ellenborough) had alluded; but this covenant he failed to perform. Mr. Pringle and Mr. Hodges were, at this time, both members of the government of Mazulipatam, and they took these means for satisfying, by preference, their own claims, which amounted to no less a sum than upwards of 58,000 pagodas, contrary to every principle of justice. This arrangement took place in 1779, with these mortgages in possession, as they were termed; but, in the year 1777, all such transactions had been absolutely prohibited by the Court of Directors, and, therefore, the governments of Mazulipatam and Madras could not legally concur in such proposition: they ought to have acted upon the order which had been so issued by the Court of Directors in 1777. It was under these circumstances that Lord Macartney, knowing what was due to right and justice, called upon the above individuals to surrender up the villages of which they had possession. Now, how could Lord Macartney have done this? or, indeed, would he not have been ashamed to do so? would he not have altogether declined to ask these persons to give up a certain present security, by which they must he precluded from all possible chance of payment, for twelve or thirteen years—a payment which even then could depend upon a recommendation from Lord Macartney to the Court of Directors at home, unless Lord Macartney had been perfectly satisfied that this was a mortgage which could not stand? Mr. Hodges, and those with whom he acted, did not object to give up the district villages; and the fact of their so acquiescing in the call made upon them, proved that they were glad to have the opportunity even such an opportunity as that comprised in Lord Macartney's recommendation of their case to the Court of Directors, for favourable consideration, of obtaining some valuable consideration in lieu of this mortgage, which they well knew to be of no value whatever. All that my Lord Macartney did was, to say, that he would recommend these claims to the notice of the Court of Directors; and he (Lord Ellenborough) would maintain, that such undertaking on his part, was the only ground on which they could claim at all; a ground which could confer on them no legal right whatever. It was clear that the Zemindar could not then have fulfilled his engagements, and that the Company could not now be called upon to do so for him, and to say that, while upon the showing of this Bill, these loans were made, the better to enable the Zemindar to pay the tribute and Peecush, due from the said Zemindar to the Company—though, at the same time, they enabled him to persevere in a course of extravagance, ruinous to himself, and seriously injurious to the interests of the country and the Company—the latter could be required to defray improvident loans contracted by other parties, avowedly for such objects as these: to say this, was to affirm a principle, which never could, nor would be established in any court of justice. It was contended, that if this Bill of relief was not passed, there was no remedy at law, or in equity, for the parties interested in it; and that, therefore, these claimants, or their representatives, were to conic upon the Company. They had, however, no claim at law, and, therefore, could not come upon the Court of Directors; for, although Lord Macartney recommended their claims to the consideration of the government of India, it was clear that these persons had betrayed their trust to that government, by making these loans in contravention of a positive order from the Court of Directors. It was also said, that this claim ought to be discharged by the Court of Directors, in their political capacity, out of the territorial revenues of India. But he must observe, that, even were this a just claim, which it was not, he did not think that it could be so paid; because, at the times these loans were contracted, the territorial revenue of India were indivisible; and, even up to this moment, the home bond debt had never been assigned, in its due proportion to territory and to commerce. The proposition of 1813 had never, or only very partially, been carried into effect; and, therefore, he could not see what claim Mr. Hodges, or his representative, could have on the Company, in their political capacity, when, in point of fact, their political and commercial capacity were one and the same. Consistent with his duty, he had suggested such objections as occurred to him on the face of the Bill, not having thought it right to enter further than was necessary into, or take advantage of, the circumstances which were detailed in the documents produced in another place; and, in his opinion, it was the duty of that House to reject this Bill. He would not enter into a discussion upon the public inexpediency of so doing, because he was sure that justice would be done in the case. If a claim like this was to be sanctioned by the Legislature, many months would not elapse before similar claims would come before them. This claim was made in respect of loans entered into half a century ago—loans made by members of the local Indian government to a tributary of that very government—not only for the purpose of enabling him to pay his tribute—but to assist him in pursuing a course of extravagance which appeared, upon the showing of the claimants themselves, who made the loans, to have been ruinous to himself, and seriously injurious to the interests of the East-India Company; and yet, after the lapse of half a century only, this claim was brought forward—not against the individual who contracted the debt—but against the Supreme government of India; and it was made on behalf of the representative of that very servant who betrayed his trust by advancing such monies, contrary to the express orders of the government he served, by which he was prohibited from engaging in transactions like that in respect of which indemnity was now demanded at the hands of their Lordships. He would only move, that the word "now" be struck out of the Motion, for the purpose of inserting these words "this day six months."

Lord Wharncliffe

feared that an examination of the evidence into which their Lordships ought to go, would make it apparent that the party complaining in this case had really no other remedy than that which Parliament could afford. The loan that had been brought under their consideration was transacted before any express order to the contrary had been made by the East-India Company. The prohibitory order was not issued until long after 1773, in which year the transaction now under discussion occurred. It was in 4767 that the transfer to Mr. Hodges took place; and it was not till 1777 that the order to prevent the advance of money to the Zemindars was made. He was aware it had been said, that this bond was not executed till the year 1779, certainly the general bond was not executed till that year, but separate and distinct bonds were executed for the several portions of the debt; and, in that year, those bonds were all delivered up to be cancelled, and the general bond was executed. He would readily admit that there was a great deal in what had been said by his noble friend near him; but he thought the whole value of it would depend upon that which his noble friend seemed unwilling to agree to, namely, the proposition of that House going into Committee on the Bill. In Committee, they should have the means, not only of discussing the whole matter in detail, but also of estimating the grounds of those reasonings which they had just heard from his noble friend. This was really a question which their Lordships could only determine by hearing evidence; and, when that evidence had been heard, he could assure his noble friend that he would be ready to throw out the Bill, if such evidence should supply him with the means of making out a good case. Another ground in favour of hearing evidence was derived from what had been said about Lord Macartney, for there did seem no other mode of arriving at a just conclusion upon his conduct, or, indeed, on any thing relating to the matter, without weighing and sifting the facts. Upon these grounds he must ask their Lordships to go into Committee.

The Duke of Wellington

said, there was one point which had not yet been referred to, and which the House ought to decide, or have decided, before they proceeded further: it was this. Had, or had not, the complainant in this matter a remedy at law, or in equity, without coming to the Legislature? Suppose that this was a debt, and that the party complaining had a remedy in the courts of the Company in India; neither under that, nor under the opposite view of the question, ought the House to read this Bill a second time. The urging them to do so was calling on them to legislate without sufficient information.

Lord Ellenborough

wished to call their Lordships' attention to this fact, that, so far back as the year 1714, orders were issued against the negotiations of loans of any kind with the Zemindars.

The Lord Chancellor

said, their Lord- ships might probably expect that he should give an opinion upon the question which had been raised, as to the existence of a remedy either at law or in equity. He did not think there was any occasion for coming to a decision on that point at present, nor did he conceive it to be quite practicable until the evidence was before the House, which it could not be, unless their Lordships consented to go into Committee; and he was the more unwilling to pronounce an opinion, because, owing to the noise which prevailed in the House at the time, or to some other cause, he had not clearly comprehended the earlier portion of the argument which had just been addressed to their Lordships; but he wished it, at the same time, to be understood, that this was not owing to any want of care or exertion on the part of the learned Gentleman who addressed their Lordships. He fully concurred in the importance which had been attached to this question, and was, therefore, the more anxious that the statement of facts should be verified, if possible, and that the false portion of it, if any, should be altogether excluded from their Lordships' consideration; for, until they had brought the matter to that condition, the argument upon it could not be otherwise than unprofitable. He himself very much doubted that there was, in this case, a remedy at law or in equity, but on that point, for the reason he had already given, he felt indisposed to pronounce any decided opinion: however, assuming that such a remedy did exist, he had no hesitation in saying, that it would now be hardly possible to work it out, for the difficulties which would present themselves at every step must prove insuperable. Besides, so far as he did hear the argument of the learned Gentleman, he understood him to contend that no such remedy existed. He did not mean to assert, that its non-existence should determine their Lordships to pass this Bill, in the absence of other reasons, but he conceived that that non-existence was to be asumed from the facts that application had been made to this House to pass such a Bill; for applications of that nature were never made until the parties interested were prepared to admit—nay, to contend—that the law was silent or insufficient.

Their Lordships divided: Contents 20; Not-contents 6—Majority 14.

Bill read a second time.