There was no administration of Justice worth the name. In addition to this, the Marathas were a constant source of danger. The Moghal emperor Shah Alam had left the protection of the company and had gone over to Marathas. Haidar Ali in the south was planning to attack the company territory. The situation called for drastic strengthening of internal and external security. So the Governor-General confronted with formidable problems from all the sides.
Administrative Reforms:The first and foremost duty of Warren Hastings was to put an end to the dual system of Government in Bengal as established by Lord Clive. In 1765 Clives dual system was now thoroughly discredited, and the court of directors decided to stand forth as Diwan i.e., collect the revenues of the provinces of Bengal, Bihar and Orissa through the agency of their own servants. Mohammad Raza Khan and Raja Shitab Rai who were deputy Nawabs of Bengal and Bihar were tried for peculation and removed from their offices. The company was to take over responsibility of administration of the province.
Finally the treasury was removed from Murshidabad to Calcutta. Hastings appointed Muny Begum, the widow of the Mir- Jaffar, as the guardian of the Minor Nawab Mubarak-Ud-Daulla. He also reduced to from 32 Lakhs to 16 Lakhs.
Further he harshly treated the Moghal Empire. Hastings cancelled the payment of 26 lakhs of rupees annually paid to the Emperor Shah Alam. Two districts of Kora and Allahabad were sold to Nawab of Oudh for 50 lakhs of rupees. Behind this ill treatment to Moghal Emperor, Hastings put forward the argument that the Emperor accepted the protection of Marathas. But his clandestine motive hardly convinced anyone.
Revenue:The company had got the Diwani of Bengal, Bihar and Orissa in 1765. But it had not taken over the work of the collection of the land revenue into its own hands. The Amils who were assigned to collect revenue were no better than contractors and the sufferings of the tenants continued.
To tide over this situation Hastings appointed a committee, which toured different parts of the country to collect first hand information. According to the findings of the committee Hastings appointed Collectors for revenue collection and administration. In 1772, he made five year settlement of land revenue by forming out the estate to the highest bidders. In 1773, further changes were made in the revenue administration. The collectors who had been found to be corrupt and indulged private trade were replaced by Indian Diwan.
To supervise the work of Indian Diwan six provincial councils were set up. But the quinquennial settlement failed miserably and Warren Hastings reverted to the annual settlement on the basis of open auction to the highest bidder in 1776. Preference was given to the Zamindars in making the settlement. In 1781, further changes were made in the revenue administration. The provincial Councils were abolished and entire work of Supervision was concentrated in the hands of the committee of Revenue at Calcutta. Hastings trial and error policy in land revenue administrate ended in Fiarco.
His unsatisfactory policy may be clear from the Cornwallis’s in 1789 that “one third of the company territory in Hindustan is now jungle, inhabitated by will beasts”. Judicial:Hastings carried out some changes in the realm of judicial administration. Before Hastings the Judicial system in Bengal was unsatisfactory. Zamindar decided the Civil and Criminal cases and the system of arbitration was very unpopular. In 1772, he established Diwani Adalat and a Faujadari Adalat were set up at the district level. Collectors were presided over by Diwani A’dalat. Provision was made for appeal to the Sadar Diwani Adalat at Calcutta which consisted of Governor General and at least two members of the council. For criminal cases Faujadari court were established.
The Faujadari Adalat was presided by Kaji and Mufti of the District. It was the duty of the collector to see that in the criminal cases evidence was duly submitted and weighted and the decisions were fair and impartial. The Faujadari Adalat was supervised by the Sadar Nizamat Adalat which was presided by the Daroga Adalat appointed by the Nizam. Provision was made for the improvement of procedure in the court.
The court was not only keeping their records of proceedings but also send same to the Sadar Diwani Adalat. The head formers of the paraganas were empowered to try cases so that ryots may not have to travel long distance in search of justice. Provision was made for arbitration by consent. The decision of the mofussil adalat was final up to Rs. 5,000. The Regulating Act of 1773 provided for the setting up of a Supreme Court at Calcutta competent to try all British Subjects.
The jurisdiction of Supreme Court and other courts often clashed. In Supreme Court the English law was administered while the Sadar Diwani Adalat, Sadar Nizamat Adalat and other courts at the district level decided cases according to Muslim and Hindu laws supplemented by regulations formed by the president and supreme council in their legislative capacity. In order to remove the friction between Supreme Court all Sadar Diwani Adalat and Sadar Nizamat Adalat, in October 1780 Warren Hastings appointed Imply, Chief Justice of the Supreme Court, as the Superintendent of Sadar Diwani Adalat. But court of directors disallowed this appointment and Imply had to resign in November 1782. But the ambiguity in the legal system continued through-out the company rule. Codification of Muslim and Hindu law was also undertaken by Warren Hastings. A translation of the code in Sanskrit appeared in 1776 under the title of Code of Gento Laws, William Jones and Colebrook published in 1791 Digest of Hindu Law. Commercial:For the promotion and growth of internal trade Hasting abolished the internal trade barriers in Bengal.
The various custom houses in the Zamindaris were suppressed. Only five custom houses at Calcutta, Hugli, Murshidabad, Dacca and Patna were allowed to exist. Secondly, he lowered the duties to 2-1/2 % payables by all the merchants, both Europeans and Indians alike. Thirdly, the boost the company’s economy, Warren Hastings checked the misuse of dastaks or free passes signed by company officers exempting from the duties, the goods of the servants of the company indulging in private trade. Stages were also taken to check the exploitation of the wearers by the company’s agent’s trade relation with Bhutan and Tibet.