India Under Company Rule (1786 to 1805)


Lord Cornwallis, a warrior-statesman, succeeded Warren Hastings as Governor- General in 1786. He belonged to an influential and aristocratic family which had wider political connections. He was also a close friend of Prime Minister Pitt and of Dundas, the most influential member of the Board of Control. He distinguished himself as a remarkable soldier in the American War of Independence.

Although he surrendered at York Town in 1781 before the American troops, his reputation was not spoiled. He still enjoyed the confidence of the authorities at Home. After his return from America he was offered the Governor- Generalship in India.

Cornwallis was prompted by a strong sense of public duty and enjoyed the respect as well as the confidence of his fellow countrymen. The Parliament was prepared to give him extraordinary legal powers to carry out radical reforms in the administration of Bengal. It amended Pitt’s India Act in 1786 so as enable him to overrule the decision of the majority of his council, if necessary.

The appointment of Cornwallis was significant in one respect. A new tradition of choosing a person from an aristocratic family for the post of Governor-General was initiated. It was his good fortune that he had an excellent team of subordinates comprising John Shore, James Grant, and Sir William Jones.

Although Cornwallis commenced his work under beneficial circumstances, he had to carry out his policy with caution.

Tipu Sultan and the Third Mysore War (1790-92)

The Treaty of Mangalore (1784) exhibited the military strength of Mysore, exposed English weaknesses and increased Tipu’s strength. Like his father he wanted to eliminate the English from India.

His other designs were to wreak vengeance on the Nizam and on the Marathas as they had betrayed his father during the hour of need.

The chief causes for the Third Mysore War were:

  1. Tipu Sultan strengthened his position by undertaking various internal reforms. This created worries to the British, the Nizam of Hyderabad and the Marathas.
  2. Moreover, Tipu made attempts to seek the help of France and Turkey by sending envoys to those countries.
  3. He also expanded his territories at the cost of his neightbours, particularly the Raja of Travancore, who was an ally of the British.
  4. In 1789, the British concluded a tripartite alliance with the Nizam and the Marathas against Tipu.

War broke out in May 1790 between the English and Tipu. It was fought in three phases.

The first phase commenced when Medows, the Governor of Madras, initially directed the campaign to invade Mysore but Tipu’s rapid movements halted the progress of the English troops and inflicted heavy losses on them. In the meantime, Cornwallis himself assumed command in December 1790. This was the beginning of the second phase of the war. Marching from Vellore, he captured Bangalore in March 1791, but Tipu’s brilliant strategies prolonged the war and Cornwallis was forced to retreat to Mangalore due to lack of provisions. The third phase of the war began when timely aid from the Marathas with plenty of provisions helped him to resume his campaign and marched against Srirangapattinam again. This time Tipu was at a disadvantage. Swiftly the English forces occupied the hill forts near Srirangapattinam and seized it in February 1792.

Tipu Sultan concluded the Treaty of Srirangapattinam with the British. The terms of the treaty were as follows:

  1. Tipu had to give up half his dominions.
  2. He had to pay a war indemnity of three crore rupees and surrender two of his sons as hostages to the English.
  3. Both sides agreed to release the prisoners of war.

The Treaty of Srirangapattinam is a significant event in the history of South India. The British secured a large territory on the Malabar Coast. In addition, they obtained the Baramahal district and Dindugal. After this war, although the strength of Mysore had been reduced, it was not extinguished. Tipu had been defeated but not destroyed.


The internal reforms of Cornwallis can be studied under three main heads.

  1. Administrative reforms
  2. Revenue reforms or Permanent Settlement
  3. Judicial and other reforms

Administrative Reforms

The greatest work of Cornwallis was the purification of the civil service by the employment of capable and honest public servants. He aimed at economy, simplification and purity. He found that the servants of the Company were underpaid. But they received very high commissions on revenues.

In addition to that they conducted forbidden and profitable private trade in the names of relatives and friends. Cornwallis, who aimed at cleansing the administration, abolished the vicious system of paying small salaries and allowing enormous perquisites. He persuaded the Directors of the Company to pay handsome salaries to the Company servants in order that they might free themselves from commercial and corrupting activities.

Further, Cornwallis inaugurated the policy of making appointments mainly on the basis of merit thereby laying the foundation of the Indian Civil Service. To cut down on extravagances, he abolished a number of surplus posts.

Another major reform that Cornwallis introduced was the separation of the three branches of service, namely commercial, judicial and revenue. The collectors, the king-pins of the administrative system were deprived of their judicial powers and their work became merely the collection of revenue.

Judicial Reforms

In the work of judicial reorganization, Cornwallis secured the services of Sir William Jones, who was a judge and a great scholar. Civil and criminal courts were completely reorganized.

  1. At the top of the judicial system, the highest civil and criminal courts of appeal, namely Sadar Diwani Adalat and Sadar Nizamat Adalat were functioning at Calcutta. Both of them were presided over by the Governor – General and his Council.
  2. There were four provincial courts of appeal at Calcutta, Dacca, Murshidabad and Patna, each under three European judges assisted by Indian advisers.
  3. District and City courts functioned each under a European judge. Every district was provided with a court. As already stated, Cornwallis had taken away from the collectors of their judicial powers and made them solely responsible for the collection of revenue. As a result, District Judges were appointed.
  4. Indian judges or Munsiffs were appointed to all the courts at the bottom of the judicial system.

In criminal cases, Muslim law was improved and followed. In civil cases, Hindu and Muslim laws were followed according to the religion of the litigants. In suits between Hindus and Muslims, the judge was the deciding authority. Cornwallis was merciful by temperament. He hated barbarous punishments and abolished those like mutilation and trial by ordeal. Cornwallis was better known as a law giver than as an administrator. With the help of his colleague, George Barlow, Cornwallis prepared a comprehensive code, covering the whole field of administration’, judicial, police, commercial and fiscal. This Code was based upon the principle of Montesquieu, “the Separation of Powers”, which was popular in the West in 18th century. In order to curb undue exercise of authority Cornwallis made all officials answerable to the courts.

Police Reforms

The effective implementation of judicial reforms required the reorganization of police administration. The District Judge controlled the police. Each district was divided into thanas or police circles each of which was about 20 square miles.

It was placed under an Indian officer called the daroga who was ably assisted by many constables. However, the police organization was not effective. In the words of Marshman, ‘the daroga enjoyed almost unlimited power of extortion and became the scourge of the country”.

Other Reforms

Cornwallis reformed the Board of Trade which managed the commercial investments of the Company. With the aid of Charles Grant, he eradicated numerous abuses and corrupt practices. Fair treatment was given to weavers and Indian workers. He increased the remuneration for honest service.

Estimate of Cornwallis

Cornwallis, a blue-blooded aristocrat, was an ardent patriot. He discharged his duties fearlessly, and his life was an embodiment of ‘duty and sacrifice’. He perceived the danger of Tipu’s growing power and curtailed it by boldly discarding the policy of nonintervention.

As an administrator, he consolidated the Company’s position in India and started the tradition of efficient and pure administration. Although there were defects in his Permanent Settlement of Land Revenue, his administrative and judicial reforms were solid achievements. He may be regarded the parent of the Indian Administrative Service and founder of an efficient and clean system of administration.

Sir John Shore (1793-98) succeeded Cornwallis as Governor General and his administration was uneventful.


The appointment of Richard Colley Wellesley as Governor- General marks an epoch in the history of British India. He was a great imperialist and called himself ‘a Bengal tiger’.

Wellesley came to India with a determination to launch a forward policy in order to make ‘the British Empire in India’ into ‘the British Empire of India’. The system that he adopted to achieve his object is known as the ‘Subsidiary Alliance’.

Political Condition of India at the time of Wellesley’s Arrival

In the north-western India, the danger of Zaman Shah’s aggression posed a serious threat to the British power in India. In the north and central India, the Marathas remained a formidable political power. The Nizam of Hyderabad employed the Frenchmen to train his army. The political unrest in the Karnatak region continued and Tipu Sultan had remained the uncompromising enemy of the British.

Moreover, the policy of neutrality adopted by Sir John Shore, the successor of Cornwallis, created a kind of political unrest in India and greatly affected the prestige of the English. His non-intervention policy contributed much to the growth of anti-British feelings. Further, Napoleon’s move for an Eastern invasion created a fear among English statesmen. It was in this light that Wellesley moulded his policy.

Preservation of British prestige and removal of French danger from India were Wellesley’s twin aims. He was also thoroughly convinced that only a strong British power in India could reduce and control the existing tyranny and corruption in Indian states. Therefore, he reversed the nonintervention policy of his predecessor and formulated his master plan namely the ‘Subsidiary Alliance’.

The Subsidiary System

The predecessors of Wellesley concluded alliances with Indian princes like the Nawab of Oudh and the Nizam of Hyderabad. They received subsidies from the Indian rulers for the maintenance of British troops, which were used for the protection of respective Indian states. Wellesley enlarged and consolidated the already existing system. However, his originality was revealed in its application.

Main Features of Subsidiary Alliance

  1. Any Indian ruler who entered into the subsidiary alliance with the British had to maintain a contingent of British troops in his territory. It was commanded by a British officer. The Indian state was called ‘the protected state’ and the British hereinafter were referred to as ‘the paramount power’. It was the duty of the British to safeguard that state from external aggression and to help its ruler maintain internal peace. The protected state should give some money or give part of its territory to the British to support the subsidiary force.
  2. The protected state should cut off its connection with European powers other than the English and with the French in particular. The state was also forbidden to have any political contact even with other Indian powers without the permission of the British.
  3. The ruler of the protected state should keep a British Resident at his court and disband his own army. He should not employ Europeans in his service without the sanction of the paramount power.
  4. The paramount power should not interfere in the internal affairs of the protected state.

Benefits to the British

Wellesley’s Subsidiary System is regarded as one of the master- strokes of British imperialism. It increased the military strength of the Company in India at the expense of the protected states. The territories of the Company were free from the ravages of war thereby establishing the stability of the British power in India. The position of the British was strengthened against its Indian and non-Indian enemies. Under the system, expansion of British power became easy. Thus, Wellesley’s diplomacy made the British the paramount power in India.

Defects of the Subsidiary System

The immediate effect of the establishment of subsidiary forces was the introduction of anarchy because of the unemployment of thousands of soldiers sent away by the Indian princes. The freebooting activities of disbanded soldiers were felt much in central India where the menace of Pindaris affected the people.

Further, the subsidiary system had a demoralizing effect on the princes of the protected states. Safeguarded against external danger and internal revolt, they neglected their administrative responsibilities.

They preferred to lead easy-going and pleasure- seeking lives. As a result, misgovernment followed. In course of time, the anarchy and misrule in several states had resulted in their annexation by the British. Thus, the subsidiary system proved to be a preparation for annexation.

Furthermore, the British collected very heavy subsidies from the protected princes and this had adversely affected their economy.

Enforcement of the Subsidiary System

Hyderabad: Hyderabad was the first state which was brought under Wellesley’s Subsidiary System in 1798. The treaty concluded in 1798 was an ad hoc measure. It fixed the amount to be paid annually at Rs.24 lakhs for the subsidiary force. In accordance with the treaty, all the French troops in Hyderabad were disbanded and replaced by a subsidiary British force. A new treaty was concluded in 1800 by which the Nizam ceded large territories to the Company and this constitutes the famous Ceded Districts.

Oudh: The threat of invasion by Zaman Shah of Afghanistan was the pretext for Wellesley to force the Nawab of Oudh to enter into a subsidiary treaty. Accordingly, the Nawab gave the British the rich lands of Rohilkhand, the lower Doab and Gorakhpur for the maintenance of an increased army which the British stationed in the capital of Oudh. The strength of Nawab’s own army was reduced. For the maintenance of law and order the British were authorised to frame rules and regulations. By this, the British acquired the right to interfere in the internal matters of Oudh. Although the Company obtained a fertile and populous territory, which increased its resources, the highhanded action of Wellesley was severely criticized.

Tanjore, Surat and the Karnatak

Wellesley assumed the administration of Tanjore, Surat and the Karnatak by concluding treaties with the respective rulers of these states. The Maratha state of Tanjore witnessed a succession dispute. In 1799, Wellesley concluded a treaty with Serfoji. In accordance with this treaty the British took over the administration of the state and allowed Serfoji to retain the title of Raja with a pension of 4 lakhs of rupees.

The principality of Surat came under British protection as early as 1759. The Nawab of this historic city died in 1799 and his brother succeeded him. The change of succession provided Wellesley an opportunity to take over the administration of Surat. The Nawab was allowed to retain the title and given a pension of one lakh of rupees.

The people of Karnatak had been suffering for a long time by the double government. The Nawab, Umadat-ul-Umara was an incompetent ruler noted for his extravagance and misrule. He died in the middle of 1801 and his son; Ali Hussain became the Nawab. Wellesley asked him to retire with a liberal pension leaving the administration to the English. Since he refused, Wellesley signed a treaty with Azim-ud Daula, the nephew of the deceased Nawab in 1801. Accordingly, the entire military and civil administration of the Karnatak came under the British.

The Fourth Anglo-Mysore War (1799)

The circumstances which led to the Fourth Mysore War can be summarized as follows: Tipu Sultan wanted to avenge his humiliating defeat and the terms imposed on him by the British. He also aimed at making Mysore a strong state. Tipu worked continuously to secure help to fight British imperialism. He took efforts to seek the help of the France, Arabia, Kabul and Turkey. He corresponded with the Revolutionary French Government in July 1798. At Srirangapattinam, a Jacobian Club was started and the flag of the French Republic was hoisted. The tree of Liberty was also planted. Later, when Napoleon came to power, Tipu received a friendly letter from Napoleon (who was in Egypt at that time).

It was at this juncture that Wellesley reached Calcutta with a mind already filled with fear of Napoleon. Therefore, he prepared for a war against Mysore. As a part of his strategy, Wellesley tried to revive the Triple Alliance of 1790 with the Marathas. Though his proposal was not accepted by the Marathas, they promised to remain neutral. However, a Subsidiary Alliance with the Nizam was concluded by the British and as a consequence, the French force at Hyderabad was disbanded.

Wellesley set out to persuade Tipu to accept a pact of subsidiary alliance and wrote letters requesting the Tipu to dismiss the French, to receive an English envoy, and to make terms with the Company and its allies. Tipu paid scant attention to Wellesley’s letters and thus the Fourth Anglo-Mysore war started.

The war was short and decisive. As planned, the Bombay army under General Stuart invaded Mysore from the west. The Madras army, which was led by the Governor-General’s brother, Arthur Wellesley, forced Tipu to retreat to his capital Srirangapattinam. Although severely wounded, he fought till his capital Srirangapattinam was captured and he himself was shot dead.

Mysore After the War

With the fall of Tipu Sultan the kingdom of Mysore fell at the feet of Wellesley. He restored Hindu rule at the central part of the kingdom. A five-year-old boy, Krishnaraja III, a descendant of the dethroned Hindu Raja, was enthroned at Mysore, which became the capital almost after two hundred years. Purnaiya, the previous minister, became Diwan. The remaining parts of the kingdom were divided between the British and the Nizam. The whole of Kanara, Wynad, Coimbatore, Dharmapuri and Srirangapattinam were retained by the British whereas the Nizam was given the areas around Gooty and a part of Chittoor and Chitaldurg districts. A British Resident was stationed at Mysore. Tipu’s family was sent to the fort of Vellore.

Wellesley and the Marathas

The only power that remained outside the purview of the subsidiary system was the Marathas. Nana Fadnavis provided the leadership to the Marathas. He was responsible for the preservation of independence of his country from the onslaught of the British. By extending a helping hand to Cornwallis against Tipu he was able to acquire a large slice of territory as the share of the Marathas from the kingdom of Mysore. His death in 1800 removed the last great Maratha leader.

Peshwa Baji Rao II, despite his stately appearance and immense learning, lacked political wisdom. The infighting among the Maratha leaders proved to be self-destructive. Jaswant Rao Holkar and Daulat Rao Scindia were fighting against each other. The Peshwa supported Scindia against Holkar. Holkar marched against the Peshwa. The combined forces of Scindia and the Peshwa were utterly defeated.

The city of Poona fell at the feet of the victor who did not hesitate to commit all sorts of atrocities, including the torturing of rich inhabitants. With rich booty Holkar returned to his capital.

Peshwa Baji Rao II was in great danger, so he fled to Bassein where he signed the Treaty of Bassein with the British in 1802. It was a subsidiary treaty and the Peshwa was recognized as the head of the Maratha kingdom. Although it was nominal, the treaty was considered the crowning triumph of Wellesley’s Subsidiary System. In accordance with this document, the foreign policy of the Marathas came under British control and therefore any action of the Maratha chiefs against the British was successfully prevented. That is the reason why the Marathas considered the treaty as a document of surrendering their independence.

As an immediate response to the Treaty of Bassein, the British troops marched under the command of Arthur Wellesley towards Poona and restored the Peshwa to his position. The forces of Holkar vanished from the Maratha capital.

The Second Maratha War (1803-1805)

Daulat Rao Scindia and Raghoji Bhonsle took the Treaty of Bassein as an insult to the national honour of the Marathas. Soon the forces of both the chieftains were united and they crossed the river Narmada. Wellesley seized this opportunity and declared war in August 1803.

Arthur Wellesley captured Ahmadnagar in August 1803 and defeated the combined forces of Scindia and Bhonsle at Assaye near Aurangabad. Subsequently, Arthur Wellesley carried the war into Bhonsle’s territory and completely defeated the Maratha forces on the plains of Argaon. As a result, the Treaty of Deogaon was signed between Bhonsle and Wellesley. The former signed the subsidiary treaty which forced him to give up the province of Cuttack in Orissa.

The campaign of British commander Lord Lake against the forces of Scindia was rather dramatic. Lake triumphantly entered the historic city of Delhi and took Shah Alam, the Mughal Emperor under British protection. Lake was quick in consolidating his conquests. By negotiating with the Raja of Bharatpur, he occupied Agra. Sadly, this military engagement proved to be a battle of great slaughter in which thousands of Maratha soldiers perished. Scindia signed a subsidiary treaty with the British. It is known as the Treaty of Surji –Arjungaon.

During the war against Bhonsle and Scindia, Holkar remained aloof because he was Scindia’s enemy. However, when Wellesley offered an alliance, Holkar made extreme demands. This made Wellesley to declare war against Holkar. The campaign against Holkar was well-organised but the English generals for the first-time committed blunders. Holkar remained unsubdued.

Estimate of Wellesley

An unscrupulous annexationist and an advocate of forward policy, Wellesley was one of the greatest empire-builders that England had ever produced. Wellesley converted the British Empire in India to the British Empire of India. The establishment of British paramountcy in India was his supreme task. He located the weak spots of the Indian powers and applied his political technique (namely Subsidiary Alliance). By the annexation of Karnatak and Tanjore he paved the way for the formation of the Madras Presidency. He rightly deserves to be called the maker of the erstwhile Madras Presidency and the creator of the Province of Agra.

In this manner a great part of the Indian subcontinent was brought under Company protection. “He turned the East India Company from a trading corporation into an imperial power”.


  1. Module-3 ModernIndia by NIOS
  2. Modern India by Bipin Chandra
  3. Class-12 Tamil Nadu State Board History Book

Related and Sponsored Posts