MID SEM ASSIGNMENT

Subject- Legal and Constitutional History

Name- Shobhit Shukla

Enrolment Number- 2019080

Section- B

Robert Clive of The East India Company signed a treaty with the Nizam of Bengal, Awadh
and the then Mughal Emperor Shah Alam II on August 1765 at Prayagraj. This treaty, the
first of its kind led to the infamous setting up of the Dual system- Dyarchy. The treaty vested
all the real power into the hands of the Company while all the administrative work was rested
on the shoulders of the Nawab of Bengal. The Nawab exercised functions like: (1) the
Diwani- revenue and civil justice and (2) Nizamat- military power and criminal justice, the
Nawab apart from the Diwani also handed the Nizamat function to the Viceroy, which
empowered the Viceroy to disband the nawab’s army and take over the state’s military
division. This is the aspect and scope of the “real powers” which was vested with the
Company. Clive was however not ready to exercise all the state’s sovereign right, thus even
though the foreign policy, the army and the treasury was under the control of the Company,
the duty of revenue collection and administration of justice was vested in the hands of the
Indian officers of the Nawab. This system of Governance came to be known as Dyarchy i.e.
rule of two, The Company and the Nawab. The company eliminated the possibility of any
clashes between the two facets by clearly defining the roles of both The Company and The
Nawab.

During this period the Company had a better financial position costing India a severe drain of
wealth due to the suffering of agriculture, trade and manufacturing industries. Without the
responsibility of the administration, the English had at their disposal all the economic
resources of the country. Hence the most striking observation and drawback of dyarchy was
that it separated powers from responsibilities. The British had all the powers vested upon
them without any “real responsibilities”. This arrangement made the local administration
stagnant and chaotic where trade and agriculture perished. The war between the East India
Company and Mir Qasim took place in 1763 through a series of encounters where the British
had a decisive victory over the Nawab and his French Allies. He fled to Awadh and formed
an alliance with Shuja-ud-Daula who was the Nawab of Awadh, Raja Balwant Singh of
Kashi and the fugitive Mughal Emperor Shah Alam II in a final attempt to oust the English
from Bengal. The allied forces clashed with the Company’s army at Buxar, a small town in
Bihar on 22nd October 1764, the British again attained a decisive victory over their combined
forces. It turned out to be the most crucial battle in the history of the Indian sub-continent as
it established the British firmly in Bengal, Bihar, and Orissa and Awadh (the whole Ganges
valley) was placed at the Company’s mercy. After the battle of Buxar, the Nawabs of Bengal
never challenged the might of the English. While the Battle of Plassey had made the English
a powerful factor in the politics of Bengal, the victory of Buxar made them a great power in
Northern India and the prime contenders for supremacy of the entire country. Robert Clive of
The East India Company signed a treaty with the Nizam of Bengal, Awadh and the then
Mughal Emperor Shah Alam II on August 1765 at Prayagraj. This treaty, the first of its kind
led to the infamous setting up of the Dual system- Dyarchy.1

The Constitutional Division of Power.

The treaty vested all the real power into the hands of the Company while all the
administrative work was rested on the shoulders of the Nawab of Bengal. Robert Clive gave
birth to the idea of the dual system of government. He would employ a shadow Nawab and
pay him monthly allowance. Shah Alam II was also provided “protection” at Prayagraj. The
company also paid him a certain allowance in exchange of the Diwani Rights or the Fiscal
administration. All the areas under this “dual government” were left under the hands of a
shadow government while The Company had real authority over those areas. But even this
didn’t satisfy Clive’s ambitions. The Nawab exercised functions like: (1) the Diwani- revenue
and civil justice and (2) Nizamat- military power and criminal justice, the Nawab apart from
the Diwani also handed the Nizamat function to the Viceroy, which empowered the Viceroy
to disband the nawab’s army and take over the state’s military division. This is the aspect and
scope of the “real powers” which was vested with the Company. Clive was however not
ready to exercise all the state’s sovereign right, thus even though the foreign policy, the army
and the treasury was under the control of the Company, the duty of revenue collection and
administration of justice was vested in the hands of the Indian officers of the Nawab. This
system of Governance came to be known as Dyarchy i.e. rule of two, The Company and the

1
SALMA AHMED FAROOQUI, A COMREHENSIVE HISTORY OF MEDIEVAL INDIA 369-370 (Pearson
2011).
Nawab. The company eliminated the possibility of any clashes between the two facets by
clearly defining the roles of both The Company and The Nawab.2

Critical Examination and Analysis.

During this period the Company had a better financial position costing India a severe drain of
wealth due to the suffering of agriculture, trade and manufacturing industries. Robert Clive’s
decision of making the administration a dyarchy was influenced by many smart decisions
like- The Company officials were not well versed with the language, culture, customs and
traditions of the foreign land, The Company had a very small number of officers and it
wouldn’t have been possible to rule a massive land such as India, Clive also made the rest of
India think that it was still the Nizam who was ruling while they just wanted to conduct
business this further proved beneficial in future treaties.

Without the responsibility of the administration, the English had at their disposal all the
economic resources of the country. One fallout of this system was that the Indian population
(traders and merchants) were reduces to mere beggars while there was a constant drain of
wealth towards Britain from the pockets of the locals. On one side the British enjoyed duty-
free trade while on the other hand the Indian merchants had to pay around 40-50% of the
revenue to their British superiors. Hence the most striking observation and drawback of
dyarchy was that it separated powers from responsibilities. The British had all the powers
vested upon them without any “real responsibilities”. This arrangement made the local
administration stagnant and chaotic where trade and agriculture perished. Everyone was
under the British revenue collection system, where the British left no stone unturned in
extracting every penny from those peasants. Since the revenue collection was under the
Company, the Nawab was unable to make any policies which could have proved beneficial
towards it’s people like providing improving irrigation, advancing loans and providing
remittances in farmer loans. This thus was one of the indirect causes of The Great Famine in
1770. There was zero activity in the name of growth and development, leaving the majority
population no choice but to turn to beggary. The Company destroyed many industries in this
process, where the local weavers and other labourers were only allowed to make goods for
the British, which were then transported and sold all over the world. The new administration
created confusion and chaos among the population, this confusion benefitted the officials of

2
The Establishment and Expansion of British Dominion in India, Mamta Agarwal, Viewed on 5th April, 2020.
< http://www.historydiscussion.net/british-india/the-establishment-and-expansion-of-british-dominion-in-india-
indian-history/704>
the Company, filling their pockets to the fullest. This was just the beginning of the Economic
loot from India, which made England the wealthiest country in the 19th and the 20th century.
The consequence of this drain was clearly visible, shaking the grassroots of the population.
The Nawab too failed to manage the administration of the area allotted to him. The Nawab
with a very small revenue of a mere 50 lakhs, could not work towards the betterment of the
people and could not do any work of public utility. The Nawab also had no power to enforce
or make any laws, thus the position of the Nawab was fully handicapped by the Company.
This ensured a constant state of lawlessness in most parts of Bengal where cases of theft and
robbery began to increase manifold. Almost everyone in their rule had to suffer due to
lawlessness and lack of justice. Even the judges were mainly influenced by the Company
stopping proper justice meted out to the common people. The judges failed to give unbiased
decisions which proved detrimental to the public.3 Thus, the system of dyarchy was just a
way for the Company to fill their pockets at the expense of the locals. The various fields, or
subjects of administration were divided between the councillors and the ministers, being
named reserved and transferred subjects, respectively. The reserved subjects came under the
heading of law and order and included justice, the police, land revenue, and irrigation. The
transferred subjects (i.e., those under the control of Indian ministers) included local self-
government, education, public health, public works, and agriculture, forests, and fisheries.
The dual system hence proved to be a disastrous and unsuccessful decision and thus has
removed by Lord Warren Hastings in 1772 by the direct orders of the company. Federalism is
a system of government in which states or provinces share power with the government at the
national position of that country. In Federalism there is two levels of government at equal
levels with coordination with each other. Federalism is the form of government in which
people of the state have a significant control over the government of the state, where the
whole government directly or indirectly in elected by the people it is governing over.4 While
Dyarchy is a state where there are two heads of the state, who have joint governance over the
state, a form of government where power is vested into two independent rulers. Clearly the
Dyarchy system introduced by the Company was never Federalism as there was no division
of powers, as Company directly or indirectly did have all the power and authority over the
people, while the Nawab was only a “shadow” ruler and did not have any “real” authority
over its people. Also, there was never any division of powers between the Government and
3
GYAN. P. AGARWAL, NEW HORIZONS OF GLOBALIZATION- INDIA AND CANADA 38-39 (Deep
and Deep Publications 2005).
4
Law and John, ‘How can we define Federalism?’, In Perspectives of Feminism, Vol 5. No.3, E105-106 (2013).
< http://www.on-federalism.eu/attachments/169_download.pdf>
its constituent powers but only between two rulers who are independent of the people who
they are governing over.

Public-Private Partnership Example.

Privatisation generally is referred to as the contract between a party and the government to
shift public responsibilities, assets and functions from the government’s shoulders to the
private venture, wholly or partly. A private prison is a joint venture between the Government
of a country and a private party to set up a prison-for-profit. In this enterprise prisoners are
kept in a place contracted to a third-party by the government. Private companies enter into
this venture to profit from this by entering into a contract with the government to commit the
prisoners to work for a certain amount of time for a certain rate paid monthly or on a daily
basis. Such contracts between the private party and the government may be for either
operation of the facility or construction and operation of the facility. With a private prison
many responsibilities and burdens are taken off the government and are instead taken up by
the private entity. Instead of spending the taxpayer’s money over administrating the prisoners
and taking care of all the resources and requirements of a prison, the government only has to
oversee the prison and supply it with prisoners. A public prison is a non-profit prison with an
aim to only house the prisoners and rehabilitate them while the corporation’s aim is to attain
profit from those prisoners by assigning them various works and paying them a stipend for
the work assigned. 5

The example I have taken is the Privatisation of Prisons in the United States of America.

Privatisation of prisons in America can be traced back to the times where America was still a
colony of Britain. Here Britain unable to ship a large number of prisoners, accumulated due
to the American Revolution signed a contract with land owners near ports to transform their
lands into makeshift prisons for the excess prisoners, which would then be shipped to the
United States of America. Then privatisation happened after the Civil War, where after the
freedom of the slaves to compensate for the freed workforce, prisoners were entered into a
contract with private parties to work for a monthly stipend. This system remained in place till
early 20th Century in the United States of America. The New Era of Privatisation began after
the American suffered due to their War on Drugs in the form of overcrowding of prisons,
rising costs of maintenance of prisons and shortage of personnel to deploy for the
overlooking of the prisoners. Private businesses saw this as an opportunity for making profit
5
Sean Bryant, The business model of Private Prisons, Viewed on 5th April, 2020.
< https://www.investopedia.com/articles/investing/062215/business-model-private-prisons.asp>
and expanding businesses. It all started with the government first contracting out specific
services such as transportation, food preparation, maintenance and medical services, but
being one of the side effects of the War on Drugs, soon in no time private enterprises were
contracted complete management and operation of the prisons. Thus, came the first private
prison of the world with complete operation given to a private party, the facility in Shelby
County, Tennessee was contracted to the Corrections Corporation of America by the
Government. Till 2013, According to the US Department of Justice there are 133000
prisoners held under private prisons contracted with the government, constituting almost
8.4% of the US prison population which exists in the country.6 The prison industry has
proved to be successful in America, with blooming revenue generation of 5 billion dollars as
of 2011. There are many more groups other than CCI now to level up the competition which
has proved to be for the betterment of the prisoners. Many Wall Street investors have now
started to invest in prison running private enterprises, which are then turning out to be great
investments thus encouraging more and more investors every passing year. Prison operating
private bodies have seen profits of more than 500% in the past few years, thus proving to be a
highly lucrative and a high profit-making body of organisation.7 Prison – Industrial Complex
is a term used to describe rapid expansion of the US prison population into private profit-
making prison management bodies. The utilization of labour into creating employment
opportunities while creating clear profit-making ventures at the expense of the incarcerated
population is one of the aspects of the Prison – Industrial Complex. This has a very economic
strong stronghold which is being grabbed by every company. In this the “underclass” or the
one not fit for the society are put to work and exploited as highly cheap labour. People have
argued that the trend of this hiring out of people of who are incarcerated is just another
simulation of the slavery culture which America fought so hard to remove from its roots. Jobs
that are required towards this prison industry no or little relevant skill set, have a high work
force with a not so high paying job. Criminologists argue that rehabilitation of prisoners
should be the main aim in having prisons and not economically gaining things from those
people who are incarcerated. This will thus have a negative effect on the population as the
prisoners not rehabilitated will continue to commit crime after their release, thus indirectly
increasing the crime rate of the country.

Changes Required in India to implement this model.

6
E. Ann Carson, Prisoners in 2013, US Department of Justice, Viewed on 5th April,2020.
< https://www.bjs.gov/content/pub/pdf/p13.pdf>
7
Varghese. K. George, The Booming business of private prisons, The Hindu, Viewed on 5th April,2020.
< https://www.thehindu.com/news/international/the-booming-business-of-private-prisons/article24241654.ece>
While India has huge number of legislations and a very elaborate framework of laws and
rules across the country, it still clearly does not answer the question of overcrowding prisons
and significant increase in crime rate across the country consistently. As a result, the backlog
of cases pending in the courts of justice have increased at an alarming rate, thus making it
evident that there surely needs to be some change in the way things are done around here.
The biggest problem in the prisons in India is the pressure on authorities to accommodate
more prisoners at the same time not forgetting about their rights which they as a human
should have. Despite many major prison reforms since independence, Indian prisons still
struggle to maintain basic rights of prisoners, proper hygiene, drug abuse and overcrowding
of the prisons. The plans of these privatisation of prisons was laid down by the NITI Aayog
when Amitabh Kant recommended that these jails should be “handed over” to private
individual parties. The Indian Constitution which is the highest authority of the land allows
for such privatisation as long as it is held under the rules of constitutional as well as
fundamental rights. In Akasi Pradhan v. The State of Orissa8 the Supreme Court stated that
“the creation of state monopoly should be made in public good.” This was interpreted to be
in support of nationalisation and privatisation. Thus, it can be interpreted that the Supreme
Court has no issues in any economically gaining privatisation of government enterprise as
long as it is respecting the boundaries of fundamental and constitutional rights. To measure
the overlooking power of the government over the prisons, we need to look at Zee Telefilms
Ltd. V. Union of India9, the minority opinion of the judges was that private entity performing
government functions such as maintaining and administering a prison should come under the
scope of writ jurisdiction.10

Prisons in India and all the related administrative works comes under the State List and not
the Central List. As per the item 4 in the seventh schedule of the Constitution of India.
According to the Prisons Act 1894, the management and caretaking of the prisons falls under
the State Government’s responsibilities too. Thus, the Centre’s being only of assistance to
improve the facilities and administration, while it’s the state which has the primary
responsibility and authority to make and change any laws towards the betterment of the
prisons and prisoners themselves. The power vested in Article 368 would have to be used by

8
Akasi Pradhan v. Orissa, 1963 AIR 1047
9
Zee Telefilms Ltd. v Union of India, (2005) 4 SCC 649
10
Yagnesh Sharma, Privatisations of Prisons and the Constitution in India, NLUJ Criminal Law Blog Viewed
on 6th April, 2020. < https://criminallawstudiesnluj.wordpress.com/2020/02/14/privatization-of-prisons-and-the-
constitution-in-india/>
the parliament to make changes in amending Article 12,14 and 21 to bring in the proposed
privatised model in play.11

The objective of a prison should be that it should be a reformative place of earning and
learning, as majority of the population in India commits crimes because they have no other
opportunity in order to survive. In order to maintain the prisoner’s healthy physical, mental
and emotional state, a prison needs to be a miniature simulation of the outside world, which is
difficult though not impossible. Countries all around the world are increasingly searching for
alternatives to this archaic method of confinement as very clearly it has not resulted in
improving the crime rate in the world, they have realised that assimilation of these inmates
are available in open societies and in teaching them how to live than to confine them in a
small cell with closed walls. This has not happened in India till now as governments are
consistently unsympathetic towards the prisoners and are given the lowest priority of the
land. The whole ideological spectrum is shifted towards treating them as deviants first and
humans last. Privatisation of prisons appears to be an effective and lucrative way of
managing and operating prisons. By doing this the Government can successfully let off some
responsibilities upon the shoulders of private parties while constantly overlooking and
governing these private bodies. Though the government should not relinquish all its
responsibilities and authority to the private enterprise but mere administrative or economic
responsibility of those prisons. Prisons would thus remain under the regulation and would be
overlooked by the Government itself. In India under this system the Government would
ensure proper maintenance of prisons, hygiene in these prisons, rights of the prisoners and the
well-being of the prisoners by contracting the prison to a private entity or party. At the same
time not losing control over the prisons and making rules, regulations and any act the
government seems necessary towards the betterment of the prisons. The government would
have a supervisory force over the prisons while it’s officials would be overlooking all the
necessary provisions required by those prisons. Present facts state that this type of Act should
be introduced in the parliament. As seen in the UK and USA the prison business has bloomed
and is now a multi-billion-dollar business, at the same time saving the taxpayer’s money
which was going into maintaining those prisons. India at first should adopt a legislature on an
experimental basis and then see to it whether it should be continued or not. There may be
several problems to it which should be meted out by amendments and changes in the
privatised reform. Considering the economic implications, the benefits are far greater than the
Banamali Barik, The Prison System and Human Rights in the era f Liberalisation and Privatisation, The
11

LawBrigade, Viewed on 6th April,2020. < http://thelawbrigade.com/wp-content/uploads/2019/05/Banamali.pdf>

probable shortcomings of this reform. As shown above even though the Government of India
has never shown any implications towards the privatisation of the prisons, the comment made
by NITI Aayog proves that the idea is not far from reality. As to the legality of it, the courts
would find it difficult to scrap any legislation towards privatisation of the prisons. Lastly, I
would just like conclude by saying that India has huge scope of this with undermanned,
overcrowded and sloppily administered prisons all over the country. Therefore, the
government should constitute a dedicated committee to see into this possibility of whole new
industry lying untouched. The committee should be dedicated towards coming up with best
possible models towards the betterment of the condition in Indian prisons while at the same
time be maintaining all the basic rights and quality of life towards the prisoners.

Critical Analysis and the perils of the proposed model.

Indian Judiciary also very progressively has come forward to protect the rights of the one
who are incarcerated. The judiciary were initially very reluctant in helping these “low-life’s”
rights but the adoption of liberal attitude towards these prisoners resulted in hearing of the
claims of various prisoners of basic rights and humane conditions in the prisons they were
held in. The courts then started to recognise and acknowledge these human rights concepts in
favour of the prisoners and started giving them reliefs. Many cases, arguments, decisions and
changes in the recognition of a prisoner’s rights led to the recognition of the various rights
like the Right to Counsel, Right to meet family members, Right to a speedy trial and Right
against unfair and cruel prison practices. A major turning point in this change was the case of
Maneka Gandhi v. Union of India12 where the Supreme Court give an interpretation of the
word “law” in Article 21 as “fair and reasonable law”. With interpretations from this case
with regard to basic prisoner’s rights were developed. Maneka Gandhi case along with the
decisions and pronouncements in Sunil Batra Etc v. Delhi Administration and Ors. Etc13 and
Charles Sobhraj v. State14 helped evolve a new jurisprudence about these prisons and the
prisoner rights in India. These cases helped India move towards attaining a balance between
“the basic dignity of a human who has been incarcerated within four walls and the power of
the management to rule and administer them”. A prisoner is also entitled and allowed by law
to get reasonable wages for the work he does while under imprisonment. If a prisoner is given

12
Maneka Gandhi v. Union of India, 1978 SCR (2) 621
13
Sunil Batra Etc v. Delhi Administration and Ors. Etc, 1979 SCR (1) 392
14
Charles Sobhraj v. State, 1996 IIAD Delhi 550
a not reasonable pay or non-payment of remuneration this comes under the scope of “forced
labour” under Article 23(1) of the Indian Constitution. Thus, the private party will have to
pay reasonable wages to its labour. In the Sunil Batra case, the judges were unanimous in
expressing their opinion towards changing the prison laws. The prisoners Right to turn to a
practicing professional while he is still in prison should be available to him. The Right to not
being exploited in contravention with Article 23(1) of the Indian Constitution is guaranteed to
every prisoner. Thus, all the prisoners already have rights against being unfairly exploited by
corporations or have been given unfair wages by those corporations. Thus, the framework for
the protection of the prisoner’s rights while privatising a prison has been indirectly laid down
in the constitution of India.

Two major problems with Privatisation of prisons in India is 1. The state would divert from
one of its core functions and 2. Regulatory Agencies may become dominating by their
interests in these prisons. (Regulatory Capture).15

Many criminologists fear that agencies and corporations assigned to work in public interest
by regulating these prisons would in turn regulate them for their own interests and against
public interests. One of the checks to keep in place to avoid such practises is to involve
multiple stakeholders who can balance out the power involved in handling these prisons.
Criminologists fear that in this system of privatisation of prisons the major consumer of the
toils of the prisoners – the Corporation would also be the regulator of that very prison, this
would inevitably create socio-economic problems among the prisoners and would be
detriment in public interest. 16

The protection enumerated in the Indian Constitution to check unfettered Capitalism.

By the start of the 19th Century the Company’s power was immeasurable, it had the ability to
make war or peace anywhere it ruled. It was an empire in itself, though acting as a
corporation. The Company went on to become the wealthiest Corporation that ever existed on
this planet, it could single handily take down kingdoms and empires with very little effort. Its
private security forces were stronger and bigger than most of the armies that existed in
kingdoms. Thus, the company became a model for today’s joint stock companies who can
only dream of achieving such economic greatness. But this greatness was only achieved by

15
James Austin & Garry Coventry, Emerging Issues on Private Prisons, US Department of Justice, Viewed on
6th April 2020. < https://www.ncjrs.gov/pdffiles1/bja/181249.pdf>
16
Alok Prasanna Kumar, Don’t Privatise our Prisons, Viewed on 6th April 2020.
< https://www.thinkpragati.com/opinion/1919/dont-privatize-prisons/>
rampant abuse of power and achieving through any means the shareholder’s interests in the
company. With no regulations to keep in check the Company’s power and the means through
which it achieved that power led to what the Company became.17

But obviously measures to keep such “unfettered capitalism” in check have been taken in
today’s world. In India the courts, in order to attain economic and political equality have
pressed on the concept of social justice. Article 14 and 16 along with the preamble makes
equal pay for equal work a Fundamental right of every citizen of India. The Constitution aims
to provide complete justice to every individual, may it be through economic, social or
political means. To keep in check the discrimination and inequality caused by capitalism, the
word socialist in the preamble plays a very important role in the Indian context. To
understand the reflection of socialism in the Constitution of India, state socialism is a very
important concept as it signifies a welfare state as one of it’s aims. State Socialism aims to
remove this discrimination and inequality caused by unregulated capitalism in societies.
Socialists aim for equal pay for equal work. Abolition of Zamindari system is one such
example of how rampant unchecked capitalism is taken into account and thus changes have
been brought in. The Indian Government has allowed mixed systems of administration, where
public and private partnerships take place. The Directive Principles of State mentioned in the
Indian Constitution guide the state on how to move towards a welfare state. It has provisions
which look to fulfil socio-economic goals of the people. The makers of the Constitution kept
in mind that mere democracy would have no meaning unless economic and political justice is
not given to the people. The Supreme Court has defined the word “socialism” in many cases
to help regulate the rampant abuse by corporations which would have taken place if not for
such judgements. The Constituent Assembly hoped for India to be an “egalitarian” society.
These principles seek to build a society which is a socially just society, with economic-
politically just society. The future caretakers of the Constitution have also gone on the same
path and added the 42nd Amendment, thus making India a socialist, sovereign, secular
democratic republic.

17
William Dalrymple, Lessons for Capitalism from the East India Company, Viewed on 7th April 2020.
< https://www.ft.com/content/0f1ec9da-c9a6-11e9-af46-b09e8bfe60c0>