We must now turn to see how in India itself the position of the East India Company gradually developed. The obvious point of departure is the Treaty of Allahabad, by which Clive secured for the Company a grant of the diwanni, agreeing in return to pay to the emperor twenty-six lakhs of rupees a year besides giving him possession of Allahabad and the revenues of the neighbouring country. The emperor at the time when he made the grant was a fugitive from his capital, without money, without troops, dependent on the English for his daily bread. His grant gave them nothing which they could not very well have taken for themselves had they been so minded, and Clive’s reason for his generosity, as has been pointed out above, referred not to the position of affairs in India but to the Company’s relations with the crown and the French. The grant was, Hastings said, “a presumptuous gift of what was not his to give”, and “[t]he sword which gave us the dominion of Bengal must be the instrument of its preservation; and if. . .it shall ever cease to be ours, the next proprietor will derive his right and possession from the same natural charter (Dodwell 596-597).”
Dodwell, H. H. “The Development of Sovereignty in British India.” The Cambridge History of India: British India, 1497-1858. vol. 5, Cambridge University Press, 1962, pp. 589-608.