Correct Answer - Option 2 : Act of 1858
The East India Company was an English company formed for the exploitation of trade with East and Southeast Asia and India. Incorporated by royal charter on December 31, 1600, it was started as a monopolistic trading body so that England could participate in the East Indian spice trade.
The Government of India Act 1858 was an Act of the Parliament of the United Kingdom passed on 2 August 1858.
- Its provisions called for the liquidation of the British East India Company (who had up to this point been ruling British India under the auspices of Parliament) and the transference of its functions to the British Crown.
- Lord Palmerston, then-Prime Minister of the United Kingdom, introduced a bill for the transfer of control of the Government of India from the East India Company to the Crown, referring to the grave defects in the existing system of the government of India.
- However, before this bill was to be passed, Palmerston was forced to resign on another issue.
- Later Edward Stanley, 15th Earl of Derby (who would later become the first Secretary of State for India), introduced another bill which was originally titled "An Act for the Better Governance of India" and it was passed on 2 August 1858.
- This act provided that India was to be governed directly and in the name of the Crown.
Hence, the correct answer is the Act of 1858.
Provision of the bill:
- The Company's territories in India were to be vested in the Queen, the Company ceasing to exercise its power and control over these territories.
- India was to be governed in the Queen's name.
- The Queen's Principal Secretary of State received the powers and duties of the Company's Court of Directors.
- A council of fifteen members was appointed to assist the Secretary of State for India.
- The Secretary of State for India was empowered to send some secret despatches to India directly without consulting the Council.
- The Crown was empowered to appoint a Governor-General and the Governors of the Presidencies.
- An Indian Civil Service was to be created under the control of the Secretary of State.
- Hereto all the property and other assets of the East India Company were transferred to the Crown.
