THE RISE AND FALL OF THE MUGHAL EMPIREfled to Shuja-ud-Daula. Together they led a large army to the east and
confronted the British at Baksar, southwestern Bihar, in 1764. Hector
Munro, the commander of the British troops, won the battle; Shuja-ud-
Daula was chased all the way to his capital, Lakhnau (Lucknow), and was
taken prisoner by the British. In subsequent years he became the main
instrument for the establishment of British rule in India. Thus the battle of
Baksar decided what the battle of Panipat had failed to settle. After the
major contenders had eliminated each other the British won the crucial
round in the struggle for supremacy in India. Clive returned to India and
the East India Company assumed the Diwani of Bengal; Shuja-ud-Daula
was reinstated in Oudh and had to give some territory to the Great
Mughal at Allahabad, where he lived on as a British pensioner.
Clive’s doubts about the suitability of the East India Company for the
task of the civil administration of Bengal were certainly justified. The two
years he spend in India on his third and last assignment (1765–7) did not
give him much time for a reorganisation of the administrative machinery of
the company, which was, after all, geared exclusively to commercial
purposes. Corruption was rampant among the company’s officers, who
plundered Bengal to their hearts’ content. Clive himself was certainly not
averse to lining his pockets: he disapproved of corruption not on moral
grounds, but for strategic reasons. Corruption is individualistic and
undermines collective discipline. Therefore Clive had the bright idea of
organising a collective plunder of Bengal by means of a company formed by
the servants of the East India Company in Bengal, which would have had a
monopoly of the inland trade of Bengal and provided a handsome income to
all its members. Bound by this common interest they would have maintained
the collective discipline which was necessary for the preservation of British
power. However, this plan did not materialise and corruption remained
chaotic and undisciplined. The British were lucky that no major challenger
appeared on the Indian scene in the wake of Clive’s final departure.
Otherwise, their future empire could still have been nipped in the bud.
The brilliant young Peshwa Madhav Rao, a great warrior like his
ancestor Baji Rao, said at that time that the British had put a ring around
India so as to put pressure on the country from all sides. But nobody was
able to break that ring: even Madhav Rao would have been unable to do
so, although he consolidated the power of the Peshwa once again and
achieved several important military successes. Initially, Madhav Rao had a
hard time in asserting himself against his ambitious uncle, Raghunath, who
was in league with the British. Madhav Rao’s aide in this struggle was his
diplomatic minister, Nana Phadnavis, who was similarly later to check
Raghunath’s ambitions following Madhav Rao’s early death. Instead of
concentrating on the defence against the British, Madhav Rao had to turn
his attention to another great challenger who appeared in southern India at
that time: Haider Ali of Mysore.