Early Company Revenue Collection and Judicial Practices in Bengal: 20 MCQs for Competitive Exams

The establishment of the East India Company’s political authority in Bengal after 1757 required the Company to develop systems for collecting revenue, administering justice and supervising local officials. The transition was gradual: the Company initially worked through existing Indian institutions and intermediaries before moving toward more direct administrative control.

The acquisition of the Diwani in 1765 was a decisive fiscal development. The Company obtained authority over revenue collection in Bengal, Bihar and Orissa, while the administrative machinery continued to involve Indian officials and institutions. After the abolition of the Dual Government in 1772, Warren Hastings introduced significant changes in revenue and judicial administration.

This period is important for understanding the foundations of the later colonial administrative system. It also illustrates the interaction between existing Indian legal and administrative traditions and emerging Company institutions.

The National Archives of India preserves public records from 1748 onward, including Finance Department records from 1750, Military Department records from 1756, Home Department records from 1758, and treaties involving the East India Company from 1765. These records constitute important primary sources for reconstructing early Company administration.

MCQs with Answers and Explanations

1. Which development gave the East India Company formal revenue-collecting authority in Bengal, Bihar and Orissa?

A. Battle of Plassey, 1757
B. Battle of Buxar, 1764
C. Grant of Diwani, 1765
D. Regulating Act, 1773

Correct Answer: C. Grant of Diwani, 1765

Explanation:
The Company’s acquisition of the Diwani in 1765 gave it the formal authority to collect revenue in Bengal, Bihar and Orissa. Mughal emperor Shah Alam II issued the relevant farman after the Company’s victory at Buxar. The grant transformed the Company’s financial position because it could now use regional revenues to support administration and military activities. The National Archives preserves an English copy of the 12 August 1765 farman.

2. In the context of early Company administration, what did the term “Diwani” primarily refer to?

A. Military command
B. Revenue and civil financial administration
C. Religious authority
D. Diplomatic relations with European powers

Correct Answer: B. Revenue and civil financial administration

Explanation:
Diwani referred principally to authority over revenue collection and civil financial administration. The grant of Diwani was therefore a major step in the transformation of the Company from a commercial organization into a fiscal and political power. It provided access to Bengal’s substantial revenue resources and helped finance the Company’s growing military and administrative establishment.

3. Who granted the Diwani to the East India Company?

A. Mir Jafar
B. Shah Alam II
C. Mir Qasim
D. Shuja-ud-daulah

Correct Answer: B. Shah Alam II

Explanation:
Shah Alam II, the Mughal emperor, granted the Diwani to the East India Company in 1765. The grant followed the Company’s victory at the Battle of Buxar in 1764 and the subsequent political settlement. The original documentary tradition surrounding this grant is important because it demonstrates how Company revenue authority acquired formal recognition within the contemporary political order.

4. Which arrangement characterized revenue administration during the Dual Government of Bengal?

A. The Company controlled revenue while the Nawab formally retained Nizamat
B. The Mughal emperor directly collected all Bengal revenue
C. The British Crown directly administered Bengal
D. Zamindars became independent sovereigns

Correct Answer: A. The Company controlled revenue while the Nawab formally retained Nizamat

Explanation:
Following the acquisition of Diwani, the Company controlled the principal source of state income while the Nawab formally retained the Nizamat, associated with criminal justice and executive functions. This arrangement became known as the Dual Government, associated with Robert Clive and lasting broadly from 1765 to 1772. Its central weakness was the separation of effective financial power from direct administrative responsibility.

5. Who abolished the Dual Government in Bengal in 1772?

A. Robert Clive
B. Warren Hastings
C. Lord Cornwallis
D. Lord Wellesley

Correct Answer: B. Warren Hastings

Explanation:
Warren Hastings abolished the Dual Government in 1772 after becoming Governor of Bengal. He sought to bring revenue and judicial administration under greater direct Company supervision. This represented an important transition from indirect arrangements through the Nawab’s administration toward a more centralized Company administrative system.

6. What was one major objective of Warren Hastings’ revenue reforms after 1772?

A. To abolish all land revenue
B. To bring revenue administration under greater Company supervision
C. To return the Diwani to the Mughal emperor
D. To end the role of zamindars completely

Correct Answer: B. To bring revenue administration under greater Company supervision

Explanation:
After abolishing the Dual Government, Hastings attempted to reorganize the Company’s revenue administration. The Company increasingly sought to supervise revenue collection, assessment and financial management directly. These reforms were part of a broader attempt to make the Company’s political authority correspond more closely with its fiscal power.

7. Which body was established in Calcutta in 1772 as part of Warren Hastings’ revenue reorganization?

A. Board of Revenue
B. Board of Control
C. Supreme Council of India
D. Council of State

Correct Answer: A. Board of Revenue

Explanation:
Warren Hastings reorganized revenue administration after 1772, including the establishment of a Board of Revenue at Calcutta. The reform reflected the Company’s increasing effort to supervise revenue collection centrally. The Board of Revenue should not be confused with the Board of Control, which was created much later by Pitt’s India Act of 1784 to strengthen British governmental supervision over Company affairs.

8. What was the significance of the Company’s use of Indian revenue officials during the early revenue system?

A. The Company immediately replaced all Indian officials with British officers
B. The Company relied extensively on existing Indian administrative knowledge and intermediaries
C. Indian officials had no role in revenue collection
D. Revenue administration was transferred entirely to the Mughal emperor

Correct Answer: B. The Company relied extensively on existing Indian administrative knowledge and intermediaries

Explanation:
The Company did not initially possess a large European bureaucracy capable of administering Bengal directly. It therefore relied considerably on Indian revenue officials, accountants, zamindars and other intermediaries. This demonstrates that early colonial administration was not simply an entirely new system imposed overnight; it incorporated and reorganized several existing administrative practices.

9. Which institution was particularly important in the traditional collection of land revenue in Bengal?

A. Zamindars
B. British Parliament
C. Supreme Court
D. Board of Control

Correct Answer: A. Zamindars

Explanation:
Zamindars played important roles in the existing land-revenue structure of Bengal. Their precise legal and administrative position changed over time, and later British policies substantially reshaped their relationship with the state and cultivators. During the early Company period, the Company continued to depend on established revenue intermediaries while gradually increasing its own supervision.

10. Which statement best describes the early Company’s judicial approach in Bengal?

A. It immediately abolished all existing Indian legal traditions
B. It initially operated through existing institutions and Indian legal personnel while gradually developing Company-controlled courts
C. It established a modern uniform legal code in 1757
D. It placed all judicial authority under Parliament

Correct Answer: B. It initially operated through existing institutions and Indian legal personnel while gradually developing Company-controlled courts

Explanation:
The development of colonial justice was gradual. The Company initially worked through existing Indian judicial institutions, officials and legal traditions, while increasingly introducing its own supervisory structures. Under Warren Hastings, judicial reforms attempted to organize civil and criminal justice more systematically. This eventually contributed to the creation of a more centralized colonial judicial framework.

11. Which courts were associated with the judicial reorganization undertaken by Warren Hastings in 1772?

A. District Diwani Adalats and Faujdari Adalats
B. Supreme Court and High Courts
C. Privy Council and Federal Court
D. Sadar Parliament and Crown Court

Correct Answer: A. District Diwani Adalats and Faujdari Adalats

Explanation:
Warren Hastings’ judicial reforms of 1772 established a system of district-level courts. Diwani Adalats dealt primarily with civil matters, while Faujdari Adalats dealt with criminal matters. The reforms attempted to bring judicial administration under greater Company supervision while retaining significant roles for Indian judges and legal traditions.

12. What type of cases were primarily dealt with by the Diwani Adalats?

A. Civil cases
B. Criminal cases only
C. European diplomatic disputes
D. Military offences exclusively

Correct Answer: A. Civil cases

Explanation:
The Diwani Adalats were primarily civil courts. They dealt with matters such as property, inheritance, contracts and other civil disputes. In the early system, Hindu and Muslim legal traditions continued to influence personal-law matters, with learned Indian legal specialists assisting the judicial process.

13. What was the principal function of the Faujdari Adalats?

A. Revenue assessment
B. Criminal justice
C. European trade regulation
D. Foreign diplomacy

Correct Answer: B. Criminal justice

Explanation:
The Faujdari Adalats dealt with criminal cases. The term faujdari was connected with the older Mughal administrative and judicial tradition. Under the reforms of Warren Hastings, criminal justice continued to draw upon Islamic legal principles and Indian judicial personnel, although Company supervision increased.

14. Which legal traditions continued to influence judicial administration under the early Company system?

A. Only English common law
B. Hindu and Islamic legal traditions
C. Roman law alone
D. French revolutionary law

Correct Answer: B. Hindu and Islamic legal traditions

Explanation:
The early Company administration did not immediately impose a single European legal system throughout Bengal. Hindu law and Islamic law continued to influence areas of personal and civil law. Hindu pandits and Muslim maulvis or qazis could assist European Company judges in interpreting applicable legal principles. This illustrates the hybrid character of early colonial judicial administration.

15. Which institution was established under the Regulating Act of 1773 and began functioning at Calcutta in 1774?

A. Board of Revenue
B. Supreme Court at Fort William
C. Sadar Diwani Adalat
D. Board of Control

Correct Answer: B. Supreme Court at Fort William

Explanation:
The Regulating Act of 1773 provided for a Supreme Court at Fort William in Calcutta, which began functioning in 1774. It marked an important stage in the development of British judicial institutions in India. Its jurisdiction and relationship with the Company’s administrative authorities generated significant constitutional disputes, making it a frequent examination topic.

16. Who was the first Chief Justice of the Supreme Court at Calcutta?

A. Sir Elijah Impey
B. Sir William Jones
C. Warren Hastings
D. Philip Francis

Correct Answer: A. Sir Elijah Impey

Explanation:
Sir Elijah Impey became the first Chief Justice of the Supreme Court at Fort William. The court began functioning in 1774. Its creation was significant because it introduced a royal court of justice alongside the Company’s administrative and judicial institutions, producing jurisdictional tensions that became prominent during Warren Hastings’ administration.

17. Which institution was primarily concerned with the Company’s revenue administration rather than the administration of criminal justice?

A. Board of Revenue
B. Faujdari Adalat
C. Supreme Court
D. Sadar Nizamat Adalat

Correct Answer: A. Board of Revenue

Explanation:
The Board of Revenue was connected with the Company’s revenue administration. By contrast, the Faujdari Adalats were concerned with criminal justice, while the Supreme Court represented a separate royal judicial institution. Understanding the distinct functions of these bodies is important because early Company administration consisted of overlapping and evolving institutions rather than a single unified bureaucracy.

18. Which historical source is particularly valuable for studying early Company revenue and judicial administration?

A. Official consultations and administrative correspondence
B. Only archaeological monuments
C. Only modern newspapers
D. Only oral traditions

Correct Answer: A. Official consultations and administrative correspondence

Explanation:
Official consultations, revenue records, judicial proceedings, correspondence, treaties and administrative reports provide important primary evidence. The National Archives of India holds extensive records beginning in the eighteenth century. Its holdings include Finance Department records from 1750, Home Department records from 1758, Military Department records from 1756, and Company treaties with Indian rulers from 1765.

19. Which documentary source provides direct evidence concerning the Company’s acquisition of Diwani in 1765?

A. Farman of Shah Alam II
B. Charter Act of 1813
C. Regulating Act of 1773
D. Government of India Act of 1858

Correct Answer: A. Farman of Shah Alam II

Explanation:
The farman of Shah Alam II dated 12 August 1765 provides direct documentary evidence of the grant of Diwani to the East India Company. The National Archives of India preserves an English copy of this document. Such primary sources are important because they allow historians to study the formal political and legal foundations of Company revenue authority rather than relying only on later interpretations.

20. Which sequence correctly reflects the broad development of early Company revenue and judicial administration in Bengal?

A. Diwani → Dual Government → abolition of Dual Government → revenue and judicial reorganization
B. Judicial reorganization → Plassey → Diwani → Dual Government
C. Regulating Act → Plassey → Diwani → Dual Government
D. Permanent Settlement → Diwani → Plassey → Judicial reforms

Correct Answer: A. Diwani → Dual Government → abolition of Dual Government → revenue and judicial reorganization

Explanation:
The broad sequence is:

1765 – Diwani granted
↓
1765–1772 – Dual Government
↓
1772 – Warren Hastings abolished Dual Government
↓
1772 onward – Revenue and judicial reorganization
↓
1773–1774 – Regulating Act and establishment of Supreme Court

This sequence demonstrates the gradual movement from indirect fiscal control toward more systematic Company administration. It is particularly useful for chronology-based questions in UPSC, SSC, CUET, APSC and other competitive examinations.

Early Company Revenue Administration: Quick Revision

Early Judicial Administration: Important Terms

Diwani Adalat

A civil court dealing primarily with civil disputes such as property, inheritance and related matters.

Faujdari Adalat

A criminal court dealing with criminal cases under the early Company judicial arrangement.

Sadar Diwani Adalat

The higher appellate civil court associated with the Company’s judicial administration in Bengal.

Sadar Nizamat Adalat

The higher criminal appellate institution associated with the Nizamat side of administration.

Qazi

A Muslim judicial official traditionally associated with the administration of Islamic law.

Pandit

A learned Hindu scholar who could assist in interpreting Hindu legal principles in matters governed by Hindu law.

Diwani

Revenue and civil financial authority.

Nizamat

Executive and criminal-justice authority associated formally with the Nawab during the Dual Government.

Cultural and Legal Heritage Significance

The development of Company courts did not occur in a cultural vacuum. Early colonial judicial institutions interacted with established Persianate administrative traditions, Islamic jurisprudence, Hindu legal scholarship and local revenue practices.

The documentary record is therefore particularly valuable for understanding the interaction between British institutions and pre-existing Indian systems. The National Archives’ collections include farmans, parwanas, sanads and other documents that illuminate India’s political, administrative, judicial, religious, social and economic conditions.

The National Archives also preserves the Fort William–India House Correspondence, a major documentary series covering correspondence between the East India Company’s authorities in India and the Court of Directors in London from 1748 to 1800. The series provides evidence for the many-sided activities of the Company in eighteenth-century India.

The 1765 farman of Shah Alam II is especially important as an archival heritage document because it records the formal grant of Diwani to the Company.

Targeting Exams

CUET-UG / CUET-PG, UPSC Civil Services Examination (CSE), SSC CGL, SSC CHSL, IBPS PO, SBI PO, RRB NTPC, RRB Group D, CDS, NDA & NA, CAPF, APSC CCE, All State Government Exams, Assam Government Grade III & IV, Assam Police Recruitment, CTET, UGC NET

Frequently Asked Questions (FAQs)

1. What was the Diwani?

The Diwani was the Company’s authority over revenue collection and civil financial administration in Bengal, Bihar and Orissa, granted by Shah Alam II in 1765.

2. Why was the acquisition of Diwani important?

It gave the Company access to substantial regional revenues, strengthening its financial capacity to maintain its military and administrative establishment.

3. What happened to revenue administration after 1765?

During the Dual Government, the Company controlled the Diwani while the Nawab formally retained the Nizamat. After 1772, Warren Hastings moved toward more direct Company supervision.

4. Who abolished the Dual Government?

Warren Hastings abolished the Dual Government in 1772.

5. What was a Diwani Adalat?

A Diwani Adalat was primarily a civil court dealing with disputes involving matters such as property, inheritance and related civil issues.

6. What was a Faujdari Adalat?

A Faujdari Adalat dealt primarily with criminal justice under the judicial arrangements developed during early Company rule.

7. Did the Company immediately replace Indian legal traditions?

No. Early Company judicial administration continued to draw upon Hindu and Islamic legal traditions, with Indian legal scholars and officials participating in the process.

8. When was the Supreme Court at Calcutta established?

The Regulating Act of 1773 provided for the Supreme Court, which began functioning at Fort William in 1774.

9. What is the significance of the 1765 Shah Alam II farman?

It provides primary documentary evidence of the grant of Diwani to the East India Company. The National Archives of India preserves an English copy of the document.

10. Which archival sources are useful for studying early Company administration?

Important sources include revenue records, official consultations, judicial records, farmans, treaties and Company correspondence. The National Archives holds extensive eighteenth-century records relevant to these subjects.

Exam-Focused Key Facts

1757 → Battle of Plassey
1764 → Battle of Buxar
1765 → Diwani granted to the Company
1765–1772 → Dual Government
1772 → Warren Hastings abolished Dual Government
1772 → Revenue and judicial reorganization
1773 → Regulating Act
1774 → Supreme Court at Calcutta began functioning

Conceptual Chain

Political influence → Diwani → Revenue control → Dual Government → Administrative problems → Warren Hastings’ reforms → More direct Company administration

Understanding this chain is essential for studying the emergence of British revenue and judicial institutions in India and the gradual transformation of the East India Company into a territorial governing power.