•   The dual system of government administration in Bengal came up after the Treaty of Allahabad (1765).

•   It was a treaty between Robert Clive and Mughal Emperor Shah Alam II.

•   Under this system, the Company got both the Diwani (revenue) and nizamat (civil administration) functions of Bengal from two different sources-

o  Diwani from the Mughal emperor and,

o  Nizamat from the nawab of Bengal.

•   The Company was authorized to collect revenues of the province as the diwan, while through the right to nominate the deputy subahdar it was in a position to control the nizamat or the police and judicial powers.

•   The company expected large amount of revenue and Robert Clive appointed two naib (deputy) Diwans i.e. two Indians for this task.