Grant of Diwani

The collapse of the Moghul empire after the death of Aurangzeb in 1707 provided opportunity for the company for its political advancement in Northern India. The defeat of Siraj-ud-daula by Clive in the Battle of Plassey in 1757 earned great prestige for the Company in Bengal. Again the English forces defeated the combined forces of Mir Kasim and Nawab Vazir of Oudh in the battle of Buxer in 1764 which marked the decline of Moghul empire. The victory of Clive in 1752 shattered the rising French influence in Deccan and the local conflicts also contributed to Company’s strength. There was political confusion due to frequently changing of Nawabs in Bengal and the English servants of the Company exploited the situation to their advantage. The Nawabs were virtually the puppets in the hands of English Company In pursuance of the victory in the Battle of Plassey and Buxer, the Company became a territorial sovereign and supreme authority in Bengal, Bihar and Orissa. It, however, desisted from taking over the reigns of this territory directly for two obvious reasons, namely-

(i) Direct assumption of the responsibility of administration might invite British Parliament’s interference because of the provision of the British Constitutional law that no British subject can acquire sovereignty for himself; and

(ii) Company’s coming to power might antagonise the indigenous population which may not be in the interest of the company. Besides, it might also arouse jealousy of the French and Portuguese who were rivals of the British Company.

With a view to avoid the above complications, the Company placed its nominee Mir Jafar as the Nawab of Bengal. But he soon lost favour of the Governor and Council of Calcutta and was therefore replaced by Mir Kasim in 1760. However, Mir Jafar was again made the Nawao replacing Mir Kasim in 1763. In 1765, Mir Jafar was replaced by his minor son Najm-ud-daula. Obviously, with every change of Nawab, the power and influence of the Company’s servants increased. The frequent changing of Nawab by the Company itself shows that the real power was vested in the Company. It was in 1765 that Moghul Emperor Shah Alam who still claimed sovereignty, transferred the Diwani of Bengal, Bihar and Orissa to the British Company in lieu of Rs. 26 lakhs per annum. ‘Diwani’ was a term used for fiscal administration and meant the collection of revenues and custones and administration of civil justice. Thus, by obtaining the grant of diwani, Clive gave to the Company’s Government of Bengal a de jure status of an official of the Moghul Emperor although it had real power to rule over this territory.

Company as Diwan (Dual System of Government)

The Company preferred to execute its Diwani functions through the natives under the supervision of its officials instead of appointing its own English servants for this purpsoe. It appointed Mohammad Raza Khan as Company’s Diwan at Murshidabad and Raja Shitab Roy was appointed as Company’s Diwan at Patna. The English officers were appointed at both the places to supervise the working of these two native Diwans. These Diwans were to discharge the functions of revenue collection and administration of civil justice. But, unfortunately the system failed miserably because of the fact that public welfare was totally ignored and  everyone tried to exploit the situation to his best advantage. The dual system of government introduced in 1765 by Clive, consequent to taking over of Diwani by the Company, did not prove a successful venture. The reasons were obvious. The Indian officials had no effective power to enforce their decisions nor could they dare to take action against the English servants of the Company. The English Servants of the Company, on the other hand, misused power for their own selfish ends. Corruption and bribery was rampant. In 1767, Governor Clive left India and Veriest was appointed as Governor of Calcutta in his place. He tried to improve the Diwani administration by appointing English servants of the company as Supervisors in districts but there was no significant improvement because these Supervisors misused their powers for their selfish ends and exploited the people.  These Supervisors also did not have adequate training and experience to perform their duties efficiently. The natural calamities like famine during 1770-71 made the situation worse. The Company put the blame squarely on the Indian officials and decided to perform its Diwani functions through its own English officials of the Company.

Thus, the collection of revenue and administration of civil justice were brought under the direct control of the company’s servants. The administration of criminal justice, however, continued to be in the hands of Nawab Nazim. The company on April 13, 1772 appointed Warren Hastings as Governor of Bengal to execute the changed policies regarding Diwani functions.


Also Read History of British settlement of Bombay and development of its administration of justice before 1726
Also Read Charter of 1726
Also Read Mayor’s Court under the Charter of 1687 and 1726
Also Read Charter of 1753
Also Read Regulating Act, 1773
Also Read Trial of Raja Nand Kumar
Also Read Warren Hastings Judicial Plan of 1772 and 1774
Also Read Judicial plan of 1790 and 1793
Also Read Judicial Reforms of Lord William Bentinck
Also Read Patna Case
Also Read Kamaluddin Ali Khan Case
Also Read The Act of Settlement 1781
Also Read Salient features of Mohammedan Criminal Law
Also Read Development of Criminal Law in India before the codification of I.P.C., 1860
Also Read History of writ jurisdiction in India
Also Read History of appeals to Privy Council from India
Also Read Recommendations made by First Law Commission in India
Also Read Main provisions of Indian High Court Act 1861
Also Read Federal Court: Its Constitution and Jurisdiction
Also Read Supreme Court of India: Establishment, Constitution and Jurisdiction
Also Read Main provisions of Government of India Act 1919
Also Read Main Provisions of Government of India Act 1935
Also Read Main Provisions of the Indian Independence Act 1947
Also Read Recorder’s Court
Also Read Simon Commission
Also Read East India Company Act or Pitt’s India Act 1784
Also Read Grant of Diwani
Also Read Second Law Commission
Also Read Choultry Courts
Also Read Main Provisions of Indian Council Act 1861
Also Read System of Administration and Justice at Surat before 1726
Also Read History of British Settlement of Madras and its Judicial Institutions Development
Also Read Cossijurah Case
Also Read Constitution and Recommendations of Third Law Commission
Also Read Supreme Court established in 1774 under the Regulating Act 1773
Also Read Constitutional History of India
Also Read Codification of Law in India
Also Read Introduction of English Law in India
Also Read Writ Jurisdiction of the High Courts before the commencement of the Constitution
Also Read Judicial System in British India after the Abolition of the Presidency Supreme Court and the Adalat System
Also Read Supreme Court at Calcutta
Also Read Administration of Justice in British India

Leave a Comment