HL Deb 12 August 1853 vol 129 cc1652-65

presented a petition from Jevanjee Pestonjee, and Rustomjee Viccajee, the sons and repesentatives of Viccajee Merjee and the late Pestonjee Merjee, British subjects and Parsee inhabitants of Bombay, lately carrying on the business of bankers and merchants at Hyderabad in the Deccan. This petition complained of wrongs done them by His Highness the Nizam's Government, and of certain acts of the Government of India, and prayed that the petitioners should be reinstated in the districts which had been mortgaged and assigned to them by the Nizam, and of which they had been dispossessed by violence, or that they might be allowed to seek a remedy for the wrong they had sustained by taking the law into their own hands, without interference from the British Government. The noble Lord said that the case of the petitioners had been brought so recently before the other House of Parliament, that many of their Lordships were probably familiar with its leading circumstances. The petitioners complained of certain acts of the Nizam as well as of the British Government in India, fraught with injustice and injury to them. These merchants were gentlemen by birth and education; though natives of Bombay, they were intimately conversant with the language and the usages of England. They were British subjects, and entitled to the protection of British law. They were members of a family long and honourably connected with the Government of India in the Bombay Presidency. The fathers of these gentlemen had been employed in the highly-confidential service of collecting the land revenues of extensive districts of the Bombay Presidency; they had ceased to hold that appointment, not from any misconduct or negligence on their part, but solely in consequence of certain great financial improvements effected in the revenue system of the Presidency, which had the effect of abolishing the duties these gentlemen collected. They were also engaged in banking, and in that branch of commerce they had accumulated a fortune little inferior to that of our great merchant princes in the city of London. Their engagement with the Bombay Government closed in 1836, and at the termination of it they received a most honourable testimonial of their faithfulness and zeal from the Government of Bombay. Being thus deprived of an official station in all respects suitable to their birth, position, and abilities within the British territories, they were induced to repair to the Nizam's country, which adjoins the Bombay territory, the sovereign of which is one of those native Princes who are virtually in a state of vassalage to the East India Company. Having entered into negotiation with the Minister of the Nizam, they formed an engagement for farming the revenue of certain of the districts of Berar within his dominions, the principal condition of their engagement being the advance of large sums of money on the security of these districts. In that situation of things the Nizam incurred a large debt to the petitioners, whose advances were chiefly employed in enabling the Nizam to pay the contingent of troops which he was by treaty bound to maintain for the defence of the East India Company. England herself was directly interested in the maintenance of the contingent at that particular period, for it was at the crisis of the Affghan war, when the presence of the Nizam's contingent in the field had a great moral effect throughout India, and when the defection of a great native Prince could not but have been attended with most calamitous consequences. Soon afterwards, the Nizam, being anxious to obtain more extended advances from these gentlemen, assigned them a distinct portion of his territories in pledge for the payment of the debt, by an instrument agreed to be deposited with General Fraser, the British Resident at the Court of the Nizam. Upon the execution of this instrument of mortgage, and its deposit at the Residence, the petitioners gave up to the Nizam a portion of the districts which they had till then actually occupied, conceiving that they had, by the acts of the Resident in thus becoming party to the negotiation, and becoming the depository of their mortgage deeds, obtained the specific sanction of the British Government, or at least their recognition of their right to the whole transaction, and to a retention of the remainder of the mortgaged lands. The instrument having been thus deposited with the Resident, the petitioners' fathers were furnished with authenticated copies given to them by the Resident himself for the satisfaction of their correspondents and of those connected with them in busness, that their credit might continue unimpaired throughout the Indian territory. On so doing the Resident notified the fact and his motives to the Nizam's Government, thus distinctly marking the Resident's recognition of the entire proceedings. The Parsees thus considered that they had obtained the approbation of the Resident to their transactions, and the virtual security of our Government; and it should be remembered, so strong were their feelings on this point, that, in order to obtain this recognition, they had actually lessened the extent of the mortgage which they actually held in security for their advance. But after this a change took place in the government of the Nizam: the Minister who negotiated the transaction retired from office, and another was appointed in his place. And then occurred a transaction where the despotism of the East was applied to a repudiation as unjust and cruel as had ever been heard of, even when compared with works of injustice committed in the Western world. The Nizam not only refused to pay his debt, but he sent bodies of troops into the districts which these Parsees held in mortgage, killed some of their officers and servants, and drove them out of these mortgaged possesions; while the position of the Parsees, as British subjects, precluded them from following the example of the Nizam's own subjects by enforcing justice for themselves, and retaining possession of their districts, by the strong hand, as had been successfully done by other of the Nizam's creditors, upon whom similar attempts had been made. This course would, on the part of British subjects, have been illegal towards a native Prince in alliance with England. The very contingent whose arrears of pay had been supplied from the funds of these Parsee merchants, would have been marched against them if they had dared to defend their own property. They suffered because they were our fellow subjects. It was this circumstance that gave them a peculiar claim to a hearing from their Lordships. Had these gentlemen been simply subjects of the Nizam, they could of course have had no claim upon the East India Company, or the British Government. But, as it happened, they were also British subjects, and it was in that capacity they were entitled to petition their Lordships' House for redress of the unexampled injuries they had suffered. The petitioners had represented their case to the Government of India, which had refused any interference. But more remains to be told. Further debts were contracted by the Nizam, not to the Parsees, but to the Company. The Indian Government enforce the payment of a large sum of money in satisfaction of a debt incurred by the Nizam to themselves, for the very same purpose as that for which the Parsees had made their advances, namely, the payment of the British contingent; and the Governor General demanded and obtained from the Nizam the perpetual cession of a district which comprises two-thirds of the very territories pledged to the Parsee merchants with the knowledge of our Resident, and from which these gentlemen had been ejected by force, fraud, and oppression; and the Indian Government now refuse to make any compensation to them for the lands which rightly belong to them, but of which we have taken possession. Was there ever a more crying injustice? But it had been said that the original loans were illegal, as being contrary to the Act of 1797, which prohibited British subjects from lending money to native Princes, except with the licence of Government. He blushed to think that so pitiful a defence could be resorted to by his countrymen. Was it denied that the advances were made and the debt contracted with the privity and consent of the East India Company, through their accredited agent? Was it denied that the proceeds of these loans were applied to the Company's benefit? Was it denied that General Fraser held their mortgage-deeds in trust? Was it denied that the Company knew these facts when they acquired possession of the very lands mortgaged to the Parsees? Dare they hold these lands and reject the debt to which they are justly liable? Was General Fraser prepared to repudiate an obligation accepted by him at the instance of the Nizam? No such thing. He was a man of honour, as well as a gallant soldier. He held in his hand a letter which General Fraser, the Resident at Hyderabad, had lately addressed to the petitioners, both parties being now in England, and the petitioners having appealed to him to assist them in obtaining relief. Surely, if the transactions were illegal, General Fraser, to whom they were known from the beginning, must have known this; but so far from saying one word of the illegality of the transaction, he expressed his regret that the petitioners were not able to obtain redress. The noble Lord then read the following letter from General Fraser:— Salterton, 9th July, 1853. My Dear Sirs—I much regret to hear that the authorities to which you addressed yourselves have not thought proper to interfere in your behalf, as I was induced to hope that a more favourable view might have been taken of your case. I am of opinion that, under the peculiar circumstances of your claim, as British subjects, upon a Prince in close alliance with ourselves, and over whom we assume the right of exercising a paramount influence, this might have been done without any danger of making an inconvenient precedent, any violation of treaty, and any necessity for saying a word that could have been offensive to His Highness' feelings, and regarded by him as an undue interference in the affairs of his Government. I may perhaps be under an erroneous impression in this matter; and I of course do not pretend to pronounce a positive judgment on the resolution adopted by Sir Charles Wood, as I remain ignorant of the grounds on which he has taken it.—Believe me, my dear Sirs, yours, very sincerely, (Signed) "J. S. FRASER. To Jevanjee Pestonjee, Esq., and Rustomjee Viccajee, Esq., London. Then it had also been said that the case had been decided against the merchants by Government in India, who were in possession of all the facts: that was true, no doubt. The claims were rejected on false grounds. He held in his hand the official letters, which proved this conclusive fact. The following was the letter from the Governor General of India to the Resident at Hyderabad:—"The petitioners appear to have advanced money without any guarantee on our part, or any communication with the British Resident." The decision of the Indian Government bore on the face of it that the claim of the petitioners was refused, because their transactions with the Nizam were without the knowledge of the Resident. This he had shown was not the fact, and General Fraser's letter, which he had just read, written as it was with the full knowledge of the allegations of the present petition, was conclusive.

He hoped he should not be told in reply, that however the Resident may have been cognisant of the transactions which were negotiating between the petitioners and the Nizam, no technical or legal guarantee had been given. If by a guarantee was meant a written legal instrument, pledging the security of the Government, he admitted that he had nothing of the kind to produce. But there was in this case as strong a moral guarantee as had ever been given or heard of. It was one which the Government was bound, in his opinion, to re- cognise, on the principle of honour and conscience. The present case could not be liable to the suspicion of having been brought forward in the spirit of party. The Motion made in the Commons had been seconded by an hon. Gentleman (Mr. J. A. Smith), was a personal, he might say an hereditary, friend of the Company. It was brought forward as a wrong that ought to be redressed; and if an injustice had been committed, the difficulty of finding a remedy ought not to be insoluble. The facts had been admitted by the Company. It had been suggested in the other House that an opportunity should be afforded to the petitioners of making out their case before the Judicial Committee of the Privy Council; but this suggestion was resisted upon a ground which he thought his noble and learned Friend on the woolsack would refuse to sanction. It was said that the Judicial Committee was a court of appeal only; and that as no suit had been instituted in this case, the claim of the Parsees could not be brought under the notice of the Committee. He thought, however, that a noble Duke on the Ministerial benches (the Colonial Secretary) would bear him out when he said that it had been usual to refer to the Judicial Committee of the Privy Council questions of any nature upon which Her Majesty might require advice. It had been asked, "Suppose the rights of the petitioners to be admitted, how are they to be enforced?" He believed many cases had occurred where the rights of British subjects, which had been withheld by native Princes, had been successfully enforced by the interposition of the British Government in India. He knew that there were such cases. He admitted the wisdom of the general principle upon which the Government of India had acted, in refusing to enforce debts which had been contracted by native Princes with British subjects; but that was a principle which had always admitted of exceptions. In Mr. Fox's Bill the rule was absolute as well as prohibitory. In Mr. Pitt's Bill the prohibitory clauses were altogether omitted. The subsequent Act, in introducing these clauses, contemplated exceptional cases. Accordingly, the Act of 1797 established the prohibition only in cases where the Government had not given their assent to the transaction. In the present case he contended that such assent had been virtually given on the part of the Government. The assent was implied by the acts of General Fraser, and was binding in conscience and equity. Another question arose, whether the Nizam was the only person subject to this liability; for in cases somewhat similar it had been held that where a wrong of this nature had been done by one independent State to a private subject of another, the Government of the latter was bound to obtain satisfaction, or to accept the liability. He regarded this case as somewhat analogous to that of the Danish claims; where the law officers of the Crown expressed their opinion that the wrong done to our merchants in seizing their book debts and goods ashore was contrary to the law of nations, and was consequently a wrong for which the British might have demanded redress, or have made war. He (Lord Monteagle) had considered, as Chancellor of the Exchequer, that, under this opinion, the British Government was bound to procure satisfaction for the wrong that had been inflicted upon its subjects, or that, in default of doing so, it was itself responsible to those of its subjects who had suffered loss. The House of Commons acted on this opinion. The consequence was, that Parliament, adopting the recommendation of Lord Melbourne's Government, granted a sum of 300,000l. to the sufferers. In the case of the present petitioners an undoubted wrong had been inflicted; and if the British Government declined to enforce a remedy as against the Nizam, he considered that the responsibility of affording reparation devolved upon them. He thought the Judicial Committee would be the best advisers to which the Crown could resort with respect to the extent and nature of their obligation. He would ask their Lordships not to leave the petitioners without a remedy. He would respectfully warn the House against a decision which, in the present position of their legislation in regard to India, might cast a doubt on their good faith towards the native inhabitants of that country. During the progress of the Bill for the better government of India, the declarations made by the Ministry, as well as by the Court of Directors, of their earnest desire to do justice to the native population, had been repeated, and, as he hoped, were sincere. Good will and kind intentions had been professed on both sides. But if an opportunity like the present were lost—if a wrong like that complained of by the petitioners were left without redress—he could not but fear that such an omission would furnish but a painful commentary upon the Act of Parliament about to pass, and would deprive the one hundred and fifty millions of our Eastern fellow-subjects of any sufficient grounds of confidence in their European rulers. He would conclude by moving that the petition should, for the present, be referred to the Select Committee on Indian Affairs, in order that its prayer and allegations should be made a subject of examination in another Session.


said, that as the case was brought before the House merely on the presentation of a petition, upon which no Motion was founded, and as some very important business yet remained to be transacted that evening, he would not trespass at any length upon their Lordships' attention. He must, however, say a few words to show that, although this was undeniably a case of great hardship and injustice, it was not clear that Her Majesty's Government had incurred the responsibility which the noble Lord had endeavoured to throw upon them. Entirely admitting hardship and injustice committed by the Nizam against the two gentlemen who were petitioners, he must say he thought the noble Lord had entirely failed in making out his case of alleged injustice on the part of the British Government. The case of the noble Lord, as he understood, was, that the petitioners, being British subjects, had lent money to the Nizam, and now sought to obtain it back through the pressure of the British Government; and although such loan was certainly contrary to the letter of the law, which expressly forbade any British-born subject lending money to any native Prince without a licence from the Government, the noble Lord contended that it was not contrary to the spirit of the law, which was intended to prevent Europeans, and not natives, from making these loans. Now, it appeared to him (Earl Granville) that all the evils arising from the advance of loans to native Princes by Europeans who were connected with the English Government, were just as likely to result in the case of loans made by natives of India who were British subjects. If the British Government undertook to interfere in one case, on behalf of such natives of India, to recover money due to them from native the Princes, the consequence would be that all debts due from native Princes would be transferred to British subjects, and the Government would be called upon to in- terfere in every case. The noble Lord had endeavoured to make out that the British Government had in some way given a licence to the petitioners to lend money to the Nizam. That he (Earl Granville) denied to be the case, although certainly there seemed to have been some knowledge of the transaction on the part of the Resident at Hyderabad, who had gone so far as to give an authenticated copy of the agreement to the petitioners. It was true the Resident had used some general, though rather doubtful, expression of opinion, that Her Majesty's Government might interpose in a friendly manner with the Nizam to obtain payment; but it was clear, from the papers in his (Earl Granville's) possession, that the Resident had never given the slightest guarantee of the nature referred to by the noble Lord. General Fraser, the Resident, in a letter to Major Oliphant, said— The Minister, Chundu Lall, informed me that certain districts assigned to the Parsees I should receive a portion of the monthly payments due on account of the contingent; but this was a matter entirely between the Minister and myself, and involved no intercourse, negotiation, or question whatever between the Parsees and the Resident. The main object of what I said to Mr. Smith and Sir C. Wood was to show that our interference, if called for at all, was so on the exclusive ground of that protection which is due from any Government to its subjects when seriously aggrieved by the act of another Government. I have stated distinctly the ground, and the sole ground as it appears to me, on which our interference could be justified, and this would extend no further than to suggest to the Nizam that it would be but an act of justice to the Parsees to cause their complaints to be inquired into, with a view to their being redressed if well founded. The present Minister by no means assents to the correctness of their accounts. Major Moore, who was then Military Secretary at Hyderabad, stated, that so far from considering that the interference of the British Government could be obtained to enforce the payment of this debt, he recollected having warned the Parsees as to the want of prudence they were manifesting in the transaction, and expressing to them his opinion that they would be ruined by it. If a British subject was seriously aggrieved, it was right that redress should be demanded; but in dealing with the native Princes of India, so paramount with them was the opinion of British Government, that if a sort of hint were given in support of a claim of this kind, it would be equivalent to a demand enforcing payment, and we should thus encourage a state of things which, for fifty years past, it had been our policy to prevent. This case had been well considered by Lord Hardinge, by Lord Dalhousie, by the Court of Directors, and by the Board of Control; and, if claims of this nature were admitted, they would, in fact, confiscate the whole property of the native Princes, whose debts would be transferred to British subjects. Although the case was one of undoubted hardship, he considered that the petitioners had no claim upon the British Government to aid them in enforcing their demand. With regard to the reference of the question to the Judicial Committee of the Privy Council, he (Earl Granville) believed he would be confirmed by the noble Duke to whom the noble Lord had appealed, when he said that the cases which were referred to that tribunal were only those in which questions of very doubtful and complicated law were involved. The present case was clear in law, and involved only a line of policy which had been long established, and the propriety of continuing which he saw no reason to doubt.


said, that having read the papers on this subject, he believed the statement of the case of the petitioners which had been laid before their Lordships was entirely correct. He agreed with the noble Earl in the opinion, that undoubtedly the case of the petitioners was extremely hard. These Parsee merchants were as respectable as any commercial men in the City of London, and they stood in the same position towards the Government. He must say, however, that while he admitted this, he could not admit that the British Government could be held in any way to have guaranteed the loan made by the petitioners; neither could he admit, that in consequence of our having taken possession—as it appeared we had done—of lands which had been placed under the management of the petitioners, we were liable for the debt incurred by the Nizam. In his opinion the Nizam still remained solely liable for the debt, and that it did not in any way attach to the land. He must say, however, that he thought, if this injury had been clone to any British subject by any State in Europe, such British subject would have received all the advantage which he could have derived from the friendly, interposition of the British Government, exercising its good offices in his behalf; but no such thing could be done in India in treating with independent Princes. In India what was in Europe diplomacy practically meant war, and the ultima ratio was the prima ratio also; and if we were to demand from the Nizam payment and satisfaction for the petitioners on account of the injuries they had sustained, we should be called upon to interfere in numberless similar cases. The result would be, the utter confiscation of the Nizam's territories, and a great political revolution. He had considered, if he had be India, what he would have done in this case; and he must say, he thought he could not have pursued any other course than that which had been taken by the Government. He could not have interfered. He understood that within certain districts which had been ceded by the Nizam to the British Government, and the revenues of which districts were to be applied to the support of the contingent were situated lands which had been assigned to the petitioners by the Nizam as security for their debt. He must say, had he been in India, that though he could not have entirely replaced these gentlemen in the position they had previously held with reference to the lands, he would exercising the power which was vested in the Government, have placed under their management, as collectors of the revenue, the districts from which they had been ousted, and would thus have enabled them, by the ordinary remuneration given to persons so employed, to derive some benefit from their services and their connexion with the Government. The noble Earl had mentioned the name of a Major Moore. Might he (the Earl of Ellenborough) be allowed to ask whether that Major Moore was a Director of the East India Company; and, if that was the case, whether Major Moore was not at this moment in the receipt of a pension from the Nizam? He (the Earl of Ellenborough) had been told this was the case; and, if it were true, he would ask whether the pension did not practically come within the spirit of the clause in the Act of 1797? Was it not just as bad to receive a pension from the Nizam as to lend money to the Nizam, if not much worse? He really wished the noble Earl (Earl Granville) would make some inquiry on this subject. He (the Earl of Ellenborough) knew nothing of the matter of his own knowledge; but he had been told that a Major Moore was to this hour in the receipt of a pension of 500l. or 600l. a year, which must have been extorted from the Nizam's Government, and which was certainly much worse than lending the Nizam money.


said, no one could but feel that it was a matter of deep regret that persons in the high position of these merchants in our East Indian possessions should be subjected to the grievous wrongs which they had no doubt sustained. As this question had only arisen upon the presentation of a petition, it was impossible to express distinctly an opinion whether any thing ought to be done, and, if so, then what course ought to be taken: the noble Lord who introduced the subject proposed that the case should be referred to the Judicial Committee of the Privy Council; but he thought the noble Lord must see that that course could not possibly be adopted. The noble Lord was perfectly right in saying that the functions of the Judicial Committee of the Privy Council were not confined to cases brought before it by way of appeal from the decisions of Courts in the Colonies or elsewhere; but all the matters referred to the Judicial Committee, so far as he was aware, had been matters of a judicial nature, to be decided upon judicial principles, and he would therefore ask their Lordships what the Judicial Committee could do in such a case as this. The difficulty was this, that these gentlemen had no right to enter into an arrangement of this kind with out the permission of the British Government. But it was said that British subjects, who were natives of India, were not included in this provision of the law. His opinion, however, was, that even if the petitioners had the sanction of the President, such sanction would not do away with the necessity of that licence. It was a different thing to give a licence beforehand, and to sanction it afterwards. But if there had been a complete licence, it would not have altered the case, for the petitioners would then be in the state of parties lending money to the Nizam before the Act of 1797 was passed. Another course to be taken was in the application of diplomatic pressure; but though the good offices of the Government might have been afforded in any case of the kind which might occur in Europe, it had been the policy of the Government not to interpose these offices in India. The only question, therefore, to consider was, whether we were to command the Nizam, or, in other words, to go to war with him? Was this a course which his noble Friend on the cross-benches was prepared to recommend? If this course were taken, it would be impossible to tell what other cases of the same kind might remain to be similarly disposed of. This was, no doubt, a case of extreme hardship and injustice perpetrated upon a British subject by a foreign State; but under circumstances which made it impossible, or nearly impossible, that the British Government could interpose.


said, that the facts were not quite in accordance with the statement of the noble Lord (the Chancellor), for the Government had frequently interfered in cases of this kind; and indeed it would appear that they had frequently done so in reference to this very Nizam. In proof of that, he would read some extracts from the papers on the table of the House. On a Petition from the Sahoocars (Bankers) of Sholapoor to the Government of Bombay, being referred to the Collector of Sholapoor, the Collector made a Report to the Government, dated 22nd August, 1848—No. 420 of 1848—in the words following:— The Collector begs to report from inquiries instituted by him. He finds that certain Sahoocars (Bankers) in Sholapoor have been in the habit, for twenty-five years past, of making large advances to the different farmers of revenue in the Nizam's dominions, at rates of interest varying from 12 to 60 per cent, and occasionally difficulties have arisen in the way of repayment, and it seems to have been usual on such occasions for the petitioners here to present a petition to the Collector to obtain a letter from him to the Resident at Hyderabad requesting that officer's assistance in realising their claims from the Nizam's officers. Under these circumstances, it will be for the Government to determine whether there is any particular urgency on the present occasion calling for more energetic measures than those that have usually been adopted in like cases. Instructions issued to the Collector by the Bombay Government, in reply to the above h Report, dated 9th September, 1848, No. 3,727 of 1848:— The practice of the Collector addressing the Resident at Hyderabad to procure payments of the debts in question, is one that never should have been adopted. As, however, it appears to have been acted upon for a long series of years, the Resident at Hyderabad will be addressed on the subject; but I am desired to request that you will immediately inform the Sahoocars (including the Petitioners) that in transactions of a similar nature subsequent to this time no petition will be listened to. He would further remind their Lordships that although the British Government did not guarantee advances which its subjects might make to foreign Powers in the way of loan, still it had always used its friendly offices to get a settlement of their claims; and if a specific revenue had been assigned in any case as security, how would it have been tolerated if the Government had appropriated the very revenue so pledged in repayment of some claim of its own? He ventured to recommend the case of the petitioners to the consideration of their Lordships, as he believed a gross act of injustice had been done them. These British subjects had a lien upon a certain territory, and the British Government had taken possession of the identical territory so mortgaged to them without noticing their prior claim. The fact was, that these parties were in a worse position than the other creditors of the Nizam, in consequence of their being British subjects; for had they been subjects of any other Power, they would have been enabled to urge their prior claim to the property which they had received as the guarantee of their debt. They could not against their own Government. Moreover, against others they could have held possession—against us they could not; and now, having ousted them from property to which they had a prior title to our own, we not only refused to do them justice ourselves, but refused to assist them in obtaining a satisfaction of the original claim for which that property was the security. This was surely a case of great hardship and injustice. Let it be remembered that this was not a claim of a purely private nature. The debt was contracted for an ally of the Government, and with the sanction of the representative of that Government, and the money was expended in pay and necessaries for an army which the Government compelled the Nizam to maintain; and the fact of the Government having taken possession of the land which had been pledged for the payment of the debt so incurred, implicated them still further in the whole transaction, and would warrant their interference did no other reason exist.


briefly replied, and moved that the petition be referred to the Committee on the Government of Indian Territories.

Motion agreed to.