The Diarchy form of Government introduced by Robert Clive

The Battle of Baxer which had on one side the East India Company and on the other side the
combined forces of the Nawab of Awad, Bengal and the Mugal Empire. The English East India
Company was headed Hector Munro. Before the Battle of Buxer one more battle was fought, the
Battle of Plassey. The Battle of Plassey was the start of the British rule in India. It was the victory
of the British East India Company and thus helped them to establish their dominance over the
Bengal. The then Nawab of the Bengal, Siraj-Ud-Daulah was dethroned and was replaced with his
Commander of the Army, Mir Jafar. This resulted for Mir Jafar to become the new Nawab of
Bengal. The British East India Company used Mir Jafar as their puppet until he shook hands with
the Dutch. But later Mir Jafar resigned in the favor of Mir Qasim. But what actually lead to the
battle that was that Mir Qasim actually was not happy with the Farman and Dastak was used by
the Company, they seemed to challenge the authority and sovereignty of the Nawab. Qasim also
intended to become independent. These factors lead for the war to break between the East India
Company and the Nawab.

British merchants came together to form the East India Company under the Charter of Queen
Elizabeth. It was formally known as the Governor and Company of Merchants of London Trading
into the East Indies. 1 The East India Company was originally established for the purpose of trade.
With the Royal Charter the Company attained to power to legislate, to make certain laws and rule
which would help in governing itself. The Royal Charter also gave them power to make criminal
laws. But the only restriction being that the laws and regulations that they would make should not
challenge the laws of England. The East India Company was also empowered to create military
establishments for the purpose of safeguarding their trade.

After winning the Battle of Buxar, the Mugal Emperor was forced to give the Diwani of the
provinces of Bengal, Bihar and Orissa to the Company. 2 The Diwani meant that the Company
could collect the revenue and could also administer civil justice in areas where the Company went.
This power to the Company was given by the Treaty of Allahabad. This Treaty was signed by
between the East India Company and the Mugal Emperor Shah Alam II. This treaty helped the

1
East India Company. Retrieved from https://www.britannica.com/topic/East-India-Company
2
Emergence of parliamentary system in India,
https://shodhganga.inflibnet.ac.in/bitstream/10603/139832/9/09_chapter%203.pdf
Company to establish its political presence as before this treaty the Company only had a strong
footing in the trade. This treaty was drafted by Robert Clive of the East India Company. This treaty
resulted due to the defeat of the Mugal Emperor and thus the Emperor had to submit to the rulings
of the treaty. The treaty gave access to around 40,000 sq kilometers of taxable land in one of the
most fertile belts.3 They could collect the taxes without the prior permission of the King, thus they
had full rights to collect taxes as per their wish but in return they had to pay an amount of 26lakhs
annually to the Mugals. Kora and Allahabad districts were returned beck to the Mugal Emperor.
The Nawab of Awadh was asked to pay Rs 53 lakhs in war indemnity. While the Nawab of Bengal
could retain the judicial powers but allowing for the Company to collect revenues.

This new setup of administration that was setup by the East India Company is known as the dual
form of government or diarchy. In this form of government the King is the de jure i.e. they handled
all the actual work of criminal, civil and police administration while all along getting a fixed
payment from the Company for the purpose of administration. While the ultimate authority was
vested in the East India Company making them the de facto rulers. They also had the responsibility
of defense on themselves. In this form of the setup the fiscal branch of the governance was under
the Company while the territorial jurisdiction remained with the Nizams. For the purpose of the
collection of the revenue the state machinery was retained with the native king but the ultimate
decision making authority was the Company. Thus two authorities were established one was with
the native the other with the British. This system of separate Diwan and Nizam came to be known
as diarchy. The diarchy made the Nawab the nominal head while the Company the real head.

3
Digital, I. T. (2016, August 12). The British rule in India started on this day, 251 years back. Retrieved from
https://www.indiatoday.in/education-today/gk-current-affairs/story/the-british-rule-india-started-this-day-250-years-
back-332469-2016-08-12