Reza Khan at the zenith of his power, 1765–1767

Before the acquisition of the Diwani, Reza Khan had been merely politically useful to the Company; after it, he became the chief instrument of their administrative control of the country. Shah Alam had granted the Diwani sanad on 12 August 1765, and when, somewhat over a fortnight later, Clive returned from Allahabad to Murshidabad he had to take the practical steps needed to implement the agreement which had been concluded, in his absence, by Sykes, with the Nawab Najm-ud-daulah. The measures adopted during his brief stay served to raise Reza Khan to the zenith of his power, for, as Reza Khan put it later, ‘Lord Clive found it necessary to restore the ancient form of government and set one person at the head of the administration of public affairs’. That person was Muhammad Reza Khan. To Reza Khan, who was to act for the Nawab Najm-ud-daulah and so to control the public office of the Nizamat, was transferred charge of the Nizamat finances, fixed at Sicca Rs. 36,07,277-8-0. He was also given charge of the annual pension allotted to Mir Saidu, Miran's son. Clive, while at Murshidabad, fixed the amount of the pensions and allowances to the family and dependents of Mir Jafar. These were included in the household expenses of Najm-ud-daulah, but because of his known jealousy towards Mir Saidu, nominated as his successor by Mir Jafar in 1760 in preference to Najm-ud-daulah, the pension of Mir Saidu was placed in Reza Khan's hands.

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