What was the Diwani Rights?
Diwani Rights were the rights granted to British East India Company to collect revenues and decide the civil cases.
As soon as the war with Mir Qasim (also Mir Kasim) began, the British reinstituted Mir Jafar on the throne (1763-65). Mir Jafar died in 1765, succeeded by his minor son, Najm-ud-daulah. After signing a treaty, he too was a powerless Nawab, living off Company’s allowances, and his political and administrative powers were usurped by the Company.
In 1765, Clive returned as the Bengal Governor and entered into a pact with the vanquished Nawab of Oudh, Shuja-ud-daulah, and Shah Alam II, the emperor of Delhi. The First Treaty of Allahabad (1765) made Shuja-ud-daulah an ally of the Company. As war compensation, he was forced to pay the Company Rs 50 lakhs and hand over Kara and Allahabad districts. The Second of Treaty Allahabad was signed (1765) with Shah Alam II. He granted the British the Diwani rights (i.e. right to collect revenues and decide civil cases) of Bengal, Bihar and Orissa in lieu of Kara, Allahabad and an annual tax of Rs 26 lakhs.
Significance of acquisition of Diwani Rights
The acquisition of the diwani rights by the. Company is an important event in the history of India.
The British control over Bengal, Bihar and Orissa was now legally acknowledged.
The diwani rights went to the Company leaving foujdari and administrative authority to the Nawab. The “powerless” Nawab had powerless responsibilities while the British enjoyed powers without any responsibilitieAllowed to collect revenue in Bengal, Bihar and Orissa, the Company was now a richer lot. It used the money to consolidate business, organizing and increasing the armed forces.
Once they got the diwani rights, the Company stopped receiving money from England to buy merchandise in India. The revenue received from Bengal was used for this purpose, and the money earned by selling these goods went back to England — not spent in Bengal. Clive, in the name of the Mughal emperor and with the approval of the Bengal Nawab, served the business and political interests of the Company.