According to the second Treaty of Allahabad (August, 1765), Mughal Emperor Shah Alam IT was taken under the company’s protection, and had to reside at Allahabad. Shah Alam II conferred Diwani (fiscal revenue collection authority) of Bengal, Bihar and Orissa to the Company by issuing ‘Farman’ on 12 August, 1765. In return, the company had to pay the emperor an annual sum of Rs 26 Lakhs and Rs 53 Lakhs for ‘Nizamat’ expenses. At that time, the Company was neither interested in taking responsibility for tax revenue collection nor it was capable to do so. Therefore, the company appointed two Diwans-Mohammad Raza Khan for Bengal and Raja Shitab Rai for Bihar. Thus, all business of Diwani and Nizamat was conducted by Indians but authorized by British Company.....Read more