Unit 1 – British Paramountcy in India

1. Decline of Mughals & Arrival of British East India Company

1.1. Decline of The Mughals – 18th century debate
The early historians of Mughal India viewed the events of the 18 th century as being integral
to political developments in the Mughal empire. The early historiography of decline
focused on the administrative & religious policies of individual rulers & their nobles. Both
the British administrators & scholars and the Indian nationalist historians of the late 19 th &
20th centuries assessed the empire in terms of the character of the ruling elites.
In the works of Sir Jadunath Sarkar, the spotlight remained on Aurangzeb, the emperor
who oversaw the imperial downfall. His religious policy in particular & later his Deccan
campaigns were identified as the chief factors. These referents continued to provide
explanations for the subsequent decline of Mughal economy, institutions, & society. Sir
Jadunath Sarkar characterized the peasant rebellions that ultimately destroyed Mughal
political stability, as a Hindu reaction to Aurangzeb’s Muslim orthodoxy. The religious policy
of the rulers constituted the chief explanatory point in the subsequent Mughal studies of
Shriram Sharma & Ishwari Prasad as well. The 18 th century emerged as a politically chaotic
& economically crisis prone period.
From the late 1950’s, Marxist oriented historians began to provide explanation of Mughal
decline in material terms. Satish Chandra held that the structural flaws in the working of
the Mughal institutions of Jagir (territory over which have control) & Mansab (rank or
position in a hierarchy) responsible for the fiscal crisis of the late 17 th century. He argued
that the efficient functioning of these 2 institutions depended on the availability of the
revenue & its collection & distribution. The Mughal failure to ensure the smooth functioning
of these institutions became most pronounced during Aurangzeb’s reign & was to herald
the process of imperial collapse. This is because these institutions form the backbone of
the Mughal empire.
From 1960’s onwards some economic historians, in particular Irfan Habib, explained
Mughal decline & the consequent political & social unrest in fiscal terms. Habib argued that
the high rate of land revenue demanded by Delhi caused large scale rural exploitation,
leading to peasant migration & rebellion. This created an agrarian crisis that resulted in
the weakening of empire’s political might. Athar M. Ali accepted Habib’s model of fiscally
centralized state but attributed its decline not so much to the high land revenue demand
but rather to a shortage of jagirs. According to him the deficit was created due to the
political expansion of the empire into less fertile lands, especially in the deccan. This
problem is called ‘Bejagiri’. This increased the number of nobles without a corresponding
augmentation in Jagir lands. The shortage of Jagir’s generated an administrative problem
which in its turn fueled the economic crisis. However, John F. Richard’s study of the Mughal
administration in Deccan challenged the idea that there was a shortage of usable Jagir’s in
the region. His conclusion that the Deccan wasn’t a deficit area questioned the belief that
‘Bejagiri’ (the absence of Jagir’s) was a major cause of the crisis of empire.
In the 1980’s the later works of Satish Chandra once again shifted the focus to the
economic aspects of the politico-administrative imperial crisis. He argued that as Jagir’s
became few & relatively infertile, the discrepancy between the estimated revenue (Jama)
& actual yield (Hasil) intensified. This had an adverse impact on the ability of state
functionaries to ensure the regularity of revenue collection. A Jagirdari crisis with distinct
economic undertones finally created problems in Mughal stability.
The downfall of the empire is also viewed as a cultural failure. Culture is seen in terms of
technological, intellectual, & economic referents/context. Here, the economic crisis that
underlined the decline is attributed to the relative economic, technological, & intellectual
rise of Europe in the period between 1500’s to 1700’s as a center of world commerce. As
Europe emerged as the principal market for luxurious crafts manufacturers of the world, it
attracted high value products from the traditional eastern markets. This increased the cost
of luxury items in India & intensified the financial difficulties of the ruling classes. This was
compensated through intensified agrarian exploitation. This is Athar M. Ali’s concept.
In addition, the intellectual & technological aridity of India did not allow towns to emerge
as safety valves for the people. There was therefore no escape from the fiscal arm of the
state. All these reasons made the empire politically & economically vulnerable. The follies
of imperial policy, threw the empire out of gear & paved the way for its eventual demise.

All these scholars projected the 18 th century as a dark age, its hallmark being political
chaos & economic decline. The fixing of the historians’ gaze on the imperial center alone
took no cognizance of the diverse ways in which Mughal institutions were being modified &
transformed at local & regional levels, so as to pave the way for a subtle shift of power
away from Delhi to the regions. This historiography saw the emergence of regional outfits
such as the Marathas, the Satnami’s, & the Sikhs also as a consequence of the support
extended by the exploited peasantry to the Maratha zamindars, to peasant leaders such as
Banda Bahadur, or to religious sects such as the Satnami’s, all of whom peppered their
rhetoric of political mobilization with the monotheistic bhakti ideology of social equality.
Alongside there also existed alternate views of the 18 th century political economy. These
moved beyond Mughal agrarian system & the machinery of revenue extraction to other
kinds of non-economic production & politico-economic engineering by Mughal
functionaries. These kinds of views can be traced in the works of Hermann Goetz on 18 th
century music & architecture and Bernard S. Cohn’s study of Banaras. Goetz documented
the resilience of Mughal society as reflected in the evolving musical & architectural style in
the wake of imperial collapse. Bernard Cohn on the other hand pieced together the efforts
of Mughal functionaries such as zamindars & amildars to manipulate both the imperial &
regional level power structures so as to carve out independent niche for themselves.
It was on these carefully crafted administrative and fiscal networks that English rule later
structured itself. Both these studies, though different in their objectives, offer similar
suggestive implications for understanding both the Imperial collapse as well as the
emergence of regional powers. They indicate the continued survival and growth of social
and economic referents of the Empire. Even when the edifice of its revenue extension
structure has collapsed, architecture, music, fiscal institutions, and social groups emerged
as the new fulcrums of regional state buildings. Such studies also provoke a
reconsideration of the centralized nature of Mughal governance. It is difficult to conceive of
a centralized bureaucratic state model where economic and social markers of growth
outlive political decay.
J. C. Heesterman, in his work, argues for the resilience and durability of Mughal society by
explaining the overarching Indian political forms through the self-explanatory organic
scheme of the rise, decline, and fall that characterized power in Hindu political theory.
Thus, according to Heesterman, the Mughal Empire did not fall, rather it was simply
swallowed by a larger political organism, so a cyclical re-alignment rather than a collapse
characterized the change in the 18th century. But, Heesterman stands alone in his
explanation of 18th century society with his emphasis on the inevitability of change that
derives from the dilemma within the Indian notion of kingship.
Scholars who produced regional studies were not convinced by Heesterman’s somewhat
meta-physical argument. In contrast, they emphasized a range of factors that fueled
imperial decline & encouraged regional, economic & political growth. The emphasis was on
different non-agricultural strands that sustained the local economies.
Ashin Das Gupta indicates that corporate mercantile institutions transcended political
boundaries for over seeing the transportation of goods & the provision of credit &
insurance services in the period of decline. Even though inland trade increased, export
trade & port cities suffered relative eclipse in the face of European advances. The port city
of Surat in Gujarat declined around 1720 as did Masulipatnam in Madras, & Dhaka in
Bangladesh. Whereas colonial port cities such as Bombay, Madras & Calcutta rose to
prominence.
B.R. Grover maps a general picture of rural commerce in 18 th century north India. He
concludes that the change caused by foreign invasions, European & English competition in
trade, & the ruination of Mughal nobility & aristocracy, local rural commercial production
found new avenues in the provincial markets within the subcontinent. This greatly
compensated for the comparative lust of foreign trade with respect to handicraft & cottage
industries. Because foreign exports from India to England were highly taxed, while exports
from England to India were not taxed at all, so Indian industries ruination was prevented
slightly by internal trade going on at the local level.
According to Karen Leonard, the movement of mercantile from Delhi to regional centers
were critical to buoyancy of the regional centers’ political economy & the relative decline
of Delhi. The shift of credit and trade of the great banking firms to the regional centers was
accompanied by the emergence of a mobile service class with multiple functions like trade,
accounting as well as revenue collection.
Chetan Singh suggests that the political unrest in some provinces such as the Punjab, was
linked to tensions generated between the agrarian economy of the Mughal Plains, on the
one hand, and fringe tribal societies as they moved towards a sedentary existence, on the
other. The process of tribal societies being sedentary altered the structure of tribal
societies and the increased pressure on the agrarian economy, which was already under
stress. Thus, the events of the eighteenth century were rooted in the economic processes
that shaped the functioning of empire from its very inception.
The much neglected cultural dimension of both the empire’s functioning as well as its
eventual demise is also now central to the field of 18 th century studies. Central to
discussion’s is the cultural interface between regions & the empire. In this context, John F.
Richards & V. Narayan Rao emphasized the need to juxtapose Persian with vernacular
source material, & oral with written tradition, to understand the complexity of Mughal
functioning at the lowest level. J.F. Richards, V. Narayan Rao & Muzaffar Alam suggest that
evidence of resistance of Mughal rule may not be available in the Persian material, but
may lie instead in vernacular texts & oral traditions generated in the regions.
The linguistic component of this critical cultural interface between regions & empire is
elaborated upon by Muzaffar Alam in a recent essay on the making of Persian as the
imperial language, he shows that the tensions between region & empire were also
expressed as friction between Persian & vernacular. Yet Persian documentation alone, both
court chronicles & revenue records continue to constitute the research base of those who
postulate a centralized fiscal state model. The evidence from most of the regions indicate
economic realignment that ensured the dissociation of the regions from imperial control.
These studies considerably alter the notion of the 18 th century as a dark age.
At the same time, these new studies also indicate that trajectories of regional
disassociations form the center were diverse, even though some general features can be
identified across the board. The common attributes are articulated most clearly in the
study of C.A. Bayly. His book, “Rulers, Townsmen & Bazaar”, suggest that regional-political
crystallization was a consequence of 3 important developments.
1. The emergence of a vibrant cross-caste mercantile organization & its involvement in
politics. The proliferation of the Mughal practice of revenue farming (ijaradari
system) meant a coalescing of merchant & agrarian interests.
 2. The gentrification process which brought together a class of scribes, accountants &
other Mughal service groups that served the new powers locally & sank their feet
deep into society, investing in the small towns & kasbas.
3. The practice of military fiscalism which meant the maintenance of large armies &
their deployment in revenue collection.
The emphasis in Bayly’s work is on the rise of intermediaries complete with the trappings
of royal power, drawing on the Mughal military & fiscal institutions and their emergence as
new power centers.
 2. Early Charters
1453 – watershed moment - arrival of ottoman empire- biggest impetus to search for
alternate routes to trade with east
Other factors – mercantilism (increase exports & minimize imports), spread of Christianity,
development of cartography & advanced ship building, state sponsored expeditions for
example henry the navigator (esp. by Spain & Portugal to look for alternate ways not
monopolized by Italian city states like Florence, Milan, Rome, Naples etc.), myth of El Derado,
renaissance’s impact – rationality & humanism which led to decline of feudalism (closed
economy) & 3 G’s i.e. gold, glory & god.
Diaz found the southernmost tip of south Africa & named it cape of good hope, which greatly
helped other travelers in reaching India. First to arrive were the Portuguese.
31st Dec – charter of 1600 – led to est. of EIC, originally named as Governor and company of
merchants of London trading to East Indie’s.

Charter of 1600
 On 31st of December, 1600, Queen Elizabeth I granted charter to the company which
incorporated the London East India Company to trade into the East Indies and also the
countries & parts of Asia & Africa for a period of 15 years subject to a power of
determination of 2 years notice if trade was found unprofitable. The name of the company
was ‘The governor & company of merchants trading into the East Indies’. Thus, the
company became a legal entity with exclusive privilege of trade with the East Indies.
 The same charter further granted legislative power to the company to make laws &
ordinances etc. for the good governance of company & its servants and to punish offences
against them by fine or imprisonment according to the laws & customs of the realm.
 15 years were given to this company for trade. The company was given full monopoly & if
any person starts trade without prior permission of the company as well as the Queen, will
be punished with fine, imprisonment, forfeiture of ship & goods or same punishment as
Queen so thinks fit.
 The company was permitted to make general laws. It was the first time where any non-
governmental body was authorized to make laws. The company was allowed by this
charter that it could give simple imprisonment & fine & physical punishment in order to
maintain the law & order of the company.
o But the company was prohibited to make laws on following cases- murder, treason,
dacoity. And the laws must not be unjustifiable & unreasonable laws.
o The company could not make laws which were inconsistent with the parliamentary
laws & the customs.
 Limitations of the charter:
o The legislative powers conferred on the company was very limited.
o Serious crimes could not be adequately dealt with.
o There was no power with the company to govern any territory.
 Despite its limited scope, the early grant of legislative powers to the company was of
historic interest because it is out of this modest beginning in the year 1600 that the vast
powers of legislations grew in course of time.
 The affairs of the company were to be conducted on democratic lines.
 The mercantile successes of some of the European powers in the 15 th & 16th centuries
inspired a group of merchants of London to form a company to trade with the East, it was
called the London East India Company. On Dec 31 st, 1600, Queen Elizabeth I granted them
a charter empowering the governor & the company to make reasonable laws for the good
government of the company & for the better advancement & continuance of the trade & to
provide such pains & penalties by imprisonment or fine as might seem to them necessary.
 The laws & penalties were to be reasonable and not to be repugnant to the laws, statutes
& customs of England.

Charter of 1609
 James I renewed the same powers by his charter, granted in 1609. It was with these
powers & limitations that the English traders came to India & set up a factory at Surat.
 In 1612, Captain Best secured from the Mughal emperor an imperial decree granting
permission to the English to trade there on payment of customs duty.
 The company secured its next territorial foothold in 1639 at Madras when Francis Day built
Fort St. George.
 In 1662, Bombay was given by Portugal to Charles II as part of the dowry of Catherine De
Braganza of Portugal. The king turned it over to the company.
 The third leg of the tripod on which England built up her system of administration in India
was obtained in 1669 when Job Charnock & his followers established a permanent
settlement in Calcutta.
 But the personal character of the law of India & the nature of many of its principles &
penalties made it impossible for men of a different culture & habits of thought to adopt the
treaty between Capt. Best & the Mughal governor.
 In 1615, Sir Thomas Roe managed to secure from the Mughal emperor Jahangir certain
facilities for the English, including the right to be governed by their own laws & to have
disputes settled by their own tribunals.
 But disputes between an Englishman on one hand and a Muslim or Hindu on the other,
were to be settled by established local authorities.
 European Christians have usually been allowed by the indulgence or weakness of the
rulers of those countries to retain the use of their own laws & their factories have for many
purposes been treated as part of the territory of the sovereign from whose dominions they
come. Thus, though the English factories were part of the dominion of the Mughal
emperor, their own law was administered in the settlements. It was at least administered
according to the current English notions of justice & fair play.

Dual system of government

 In 1765, the company obtained from the Mughal emperor the grant of Diwani over Bengal.
This was the right to administer the revenue of Bengal which carried with it the duty of
administering civil justice while the Nizamat or the right to administer criminal justice
remained with Naib Nasim, a minister of Nawab. In practice, the inconvenience of
separating these powers proved so grave that the company encroached upon and
ultimately usurped the power to administer criminal justice.
 In these circumstances, it became necessary even before the company could claim
dominion over any part of India, that the crown should grant to them certain legislative &
judicial powers to be exercised by them over the English servants of the company & such
Indian settlers as placed themselves under their protection.

 For each voyage, the crown used to grant the general or commander of the fleet the right
to inflict punishment for capital offences & to enforce martial law. The royal grant of 14 th
December, 1615 provided that in cases involving capital offences, a verdict must be found
by a jury.

 James I, on February 4th, 1623 empowered the east India company to issue commissions to
any of its presidents and his council to punish & correct all & every subject of the company
or their heirs employed by the East India company.
 The death penalty could only be inflicted for mutiny, after trial by a jury of 12 or more
Englishmen.
 In spite of this grant of power, the company in 1624 applied to the king for authority to
punish their servants abroad by marital law as well as by municipal law.
 By charter granted in 1661, Charles II empowered the governor & council of each factory
to judge all persons belonging to the said government & company, or that should live
under them in all causes whether civil or criminal according to the law of the kingdom & to
execute judgment accordingly. This general provision placed judicial power in the hands of
the executive & restricted the law to be administered to that in force in England.
 According to G. Rankin, the first provision for the exercise of judicial powers by the East
India company was made by the charter of Charles II, and its responsibility for the
administration of law in India was confined until 1765 to the factories of the company &
their branches.
 The provision of charter of 1661 were interpreted as applicable only to the European
servants of the company. The English crown at this time clearly had no jurisdiction over
native subjects of Mughals & the charter was admitted to apply to the European servants
of the company.
 The charter of 1661, issued by Charles II increased the authority of the company. By the
charter of 1661, the company was empowered to appoint governor & council to decide
civil & criminal cases of all persons of the company. The governor & his council were given
general judicial authority to judge all persons belonging to the said government &
company or, that shall live under them, in all cases whether civil or criminal according to
the law of this kingdom & to execute judgement accordingly.
 The right to administration was one of the main feature of charter of 1661. The charter
empowered the company to administrate over the fort, colonies & cities. If it is expedient
to maintain the administration, it could indulge in the war with Indian local kings & could
make peace treaties.
 The company was also authorized for, that if any person who interferes in the trade
monopoly of the company, be sent to Britain for starting litigation. Apart from that the
company was also authorized to appoint governor’s and officers for judicial administration
over all subjects as well as workers of the company.
 The company was enabled by this charter that it could keep the arm forces, weapons, and
fighter ships for its security. Company could also keep commanders and other officers who
were suitable for governor & his council.
 Through this charter, judicial administrative rights were also given to the governor & his
council which they could adjudicate & execute in accordance with the English law in case
which it is related to:
o A) cases concerned with company
o B) matters within the limits of the company
o C) all cases of civil and criminal nature
 The direction was given by this charter that the governor and his council will apply the
English law in all cases. Those Indians who were residing in their colonies will also be
governed by the English law. It was very arbitrary compliance of English law upon the
Indians.
 The charter of 1600 provided very simple punishments but charter of 1661 enabled
governor & his council to penalize with capital punishment in heinous crimes. Wherever
the governor & his council wasn’t constituted, the accused was sent to nearby governor &
his council or sent to Britian for trial.

 The charter of August 9, 1683 while giving full powers to the company to make peace &
war with any of the nations of Asia, Africa & America within the charter limits, empowered
them to raise such military forces as seemed necessary & to execute marital law for the
defense of their forts, places, & plantations against foreign invasion or domestic rebellions.
 James II on April 2, 1686 authorized the company to appoint admirals & other naval
officers on their ships within the charter limits. The officers were given the power to raise
naval forces & exercise within their ships martial law for the defense of their ships when
engaged in open hostility with other nations.
 William III’s charter of 1698 gave the company the right to appoint generals and other
officers for their forces on sea & land, to raise forces & to exercise martial law in time of
war or open hostility.
 The company had complained of its lack of authority to keep its military forces in proper
order, and it may be that this renewed recognition of existing authority wasn’t wholly
satisfactory to them.
 The royal charter of September 24, 1726 provided for the establishment at forts of Madras,
Calcutta & Bombay. And establishment of civil & criminal courts that derived their
authority from the King instead of the company.
o The charter recites that representation was made by the company that there was a
great want at these places of a proper and competent power & authority for the
speedy & effectual administration of justice in civil causes and for the trying &
punishment of capital & other criminal offences.
o Thus, was introduced into each presidency town a mayor’s court, not a court of
company as had there been in Madras since 1687, but a court of the King of
England, though exercising its authority in a land to which the King of England had
no claim to sovereignty.
 According to G. Rankin the law intended to be applied by these courts was the law of
England. This is clear enough from the terms of the charter, though this is not expressly
stated and it has long been accepted doctrine that this charter introduced into the
presidency towns the law of England.
 It was observed by the Privy council that the English law, civil or criminal, has been usually
considered to have been applicable to natives within the limits of Calcutta in the year 1726
by the charter. Neither that nor the subsequent charters expressly declared that the
English law shall be so applied but it seems to have been held the necessary
consequences of the provision contained in them.
o But English law in its entirety was not introduced into India.
 The charter of George II granted in 1753 expressly provided that the Mayor’s court was not
to try actions between Indians, unless both parties consented to submit the dispute for
determination by the mayor’s court.
 3. System of Dual Government of Robert Clive
Battle of buxar created an atmosphere, where company was forced. Though won over the Mughal emperor, only
demanded the Diwani rights over Bengal since its difficult to control the entire territory over a population where they
are a minority.

British merchants were given Dastaks which was a pass that gave them concessions when trading in their territories.
This was misused by company officers, who used it for conducting personal businesses as well outside of company
affairs.

Diwani rights entailed right to collect revenue. Nizamat means administration which was not claimed by the
company.
 4. Zamindari system of Cornwallis
Read from Plassey to partition
5. Subsidiary alliance of Wellesley
6. Doctrine of Lapse of Dalhousie
7. Drain of Wealth Theory of Dadabhai Naoroji