When the news of the victory of Buxar reached England, everyone’s opinion was that the person who had laid the foundation of the British Empire in India should be sent to strengthen that empire. Therefore, Clive was sent as the chief general and governor of the British territories in India. Coming here, Clive saw that the entire political system of northern India was in a state of indecision. The administration of Bengal was a complete mess. The workers of the Company were so engrossed in the greed of money and the vices arising out of it that the Company’s business was coming to a standstill and the public was being oppressed.
Treaty with Awadh – Clive’s first task was to fix relations with the defeated powers. He went to Awadh and met the Nawab of Awadh, Wazir Shuja-ud-daula, at the place of Allahabad and signed the treaty of Allahabad (16 August 1765). Accordingly, Shuja-ud-daula was returned to his territories on the following conditions:
1- The Nawab should give the districts of Allahabad and Kada to Emperor Shah Alam.
2- He should give 50 lakh rupees to the company as compensation for the war.
3– He should replace Balwant Singh, the vassal of Banaras, in his jagir.
Apart from this, he made an attack and defensive treaty with the company, due to which he would have to provide free assistance as per the requirement of the company and the company would give military assistance to the Nawab to protect the borders, for which the Nawab would have to pay money.
Treaty with Shah Alam — According to the Second Treaty of Allahabad (August 1765), the fugitive Emperor Shah Alam was taken under English protection and was kept in Allahabad. The districts of Allahabad and Kara which the Nawab had left were given to Shah Alam. Shah Alam, by his decree of 12 August, granted the Diwani of Bengal, Bihar, and Orissa to the Company permanently. In return, the company will give 26 lakh rupees to the emperor and 53 lakh rupees for the expenses of the Nizamat.