Introduction

• Following the Treaty of Allahabad (1765), Robert Clive set up the infamous dual system of administration in Bengal.
• On August 12, 1765 Clive secured from Shah Alam II, the powerless Mughal Emperor, a farman granting to the English Company the Diwani of Bengal, Bihar and Orissa, stipulating in return to pay the Emperor an annual subsidy of 26 lakhs of rupees.
• The Nawab of Bengal became a mere pensioner: the Company was to pay him annually a fixed sum of 53 lakhs of rupees for the support of the Nizamat
• Clive thus established a Double Government in theory, with the Company as Diwan, and the Nawab as Nizam.
• During Dual System, Nawab-ud-Daulla and Saif-ud-Daull were the Nawabs of Bengal.
• Under this system, the administration of Bengal was divided into Nizamat and Diwani.

• Diwani:
  • The Diwani was concerned with revenue and civil justice.
  • It was the right to collect revenue  which was given to East India Company.
  • The British administration acquired the functions of the Diwani or revenue Diwani (Fiscal) in Bengal, Bihar and Orissa from the Mughal emperor.
• Nizamat:
  • Nizamat was concerned with police, criminal justice etc.
  • Nizamat (administrative responsibility) was entrusted to Bengal Nawab.

• Though the administration theoretically divided between the Company and the Nawab, the whole power was actually in the hand of the Company.
• Under the Dual system, the fiction of sovereignty of Mughal emperor and formal authority of Nawab was maintained.
• As the diwan, the Company was authorised to collect revenues of the province, while through the right to nominate the deputy Nizam (deputy subahdar), it was in a position to control the Nizamat or the police and judicial powers.
• The deputy subahdar (appointed to help Nawab) could not be removed without the consent of the Company.
• English Resident at the Durbar decided every matter of importance.
• The Nawab, having lost all independent military or financial support for his executive actions, became in fact a mere figurehead.
• However, at this point of time, the Company was neither willing nor able to collect the revenue directly. Hence, it appointed two deputy diwans for exercising diwani functions:

• Mohammad Reza Khan for Bengal and
• Raja Sitah Roy for Bihar.

• Mohammad Reza Khan also functioned as deputy Nizam.
• In this way, the whole administration of Bengal was exercised through Indian agency, although the actual authority rested with the Company.
• The establishment of this ‘masked system’ was a sign of the Company’s unwillingness to recognise that it had ceased to be a mere trading body and become a ruling power.
• In England, the aspect of the arrangement which attracted chief attention was the immense wealth which the Company was expected to derive from the revenues of Bengal, estimated at £ 4,000,000 per annum.
• The system of government associated with the name of Clive continued under his successors Verelst (1767 69) and Cartier (1769-72).
• The Mughal emperor Shah Alam hands over the treaty of Allahabad to Robert Clive which transferred tax collecting rights in Bengal, Bihar and Orissa to the East India Company, August 1765.