How the Nawab of Arcot was fleeced by British East India Company - colonial India

Arcot Nawob Muhammad Ali Khan Wala-Jah(1752 to 1795)

Above image: Arcot Nawab (Nawab of the Carnatic; portrait by George Willison)............................ 

Carnatic territories.History Discussion

Muhammad Ali Khan Wallajah (7 July 1717 – 13 October 1795), was the Nawab of Arcot in S. India and was  a close  ally of the British East India Company that ran a proxy government in India on behalf of the British Crown. He maintained close contact with the  Mogul ruler 
Emperor Shah Alam II and often referred to as the Subedar of the Carnatic.

He had military alliance with Nasir Jung, and the British in opposing his own relative Chanda Sahib, who sought Subadarship with French support. However, Chanda Sahib  made a futile attempt  to seize the control and it was an ignominious defeat for the French in the middle of 18th century.  An Imperial firman confirmed 
Muhammad Ali Khan Wallajah's control over the Carnatic and  on  21 January 1751 he became Naib to Viceroy of the Deccan. Later in 1763 the Treaty of Paris recognized him  as an independent ruler, so was the  Emperor of Delhi,  Shah Alam II on 26 August 1765.

The twenty years' struggle between the French and the English ended in 1763 and as per the peace treaty, the settlement of Pondicherry and a few other places were restored to the French, but the English remained a force to reckon with  in Southern India. Muhammad Ali,  was recognized as Nawab of the Carnatic,


The Nawabs of Arcot -  The kingdom in the Carnatic region now forming part of Tamil Nadu, South India  ruled between 1761 and 1818 during the reign  of Charlotte of Mecklenburg, wife of King George III (1760-1820) and Queen Consort of Britain. The Nawabs  were the official  agents of the Delhi Mughal empire in the Carnatic region from 1692 to 1744 but were more or less independent rulers on their own headed by  Nawab  Anwaruddin Muhammad Khan from 1744 to 1749. The ruler was  initially  an ally of the French  from 1749 to 1855, and later became close to the British. The rulers' military and administrative alliance with the English company  from 1752 to 1855 is an important part of British India history with respect to southern states.

The Nawabs of Arcot were reasonably rich and  had a large collection of jewelry and precious stones, besides good revenue from lands. In 1777, the ruler presented one of the valuable diamonds then to Queen Charlotte, wife of King George III (1760-1820) and Queen Consort of Britain  as a token of the Nawab's loyalty and allegiance - a sort of "Nazrana" in Urdu to the English Crown. It was an expression of gratitude to the British company for their timely military assistance against the French aggression  backed by their local Indian allies during their most tested period of their rule. The Arcot diamonds get their name from the owner. They were mined in the Golconda kingdom, close to Hyderabad, Telangana. Actually, the mines were in Kollur, near the Krishna river, now part of  Andhra state.

 The Nawab, being an  ally of the British East India Company, with beefed up army  was quite ambitious to expand his rule over southern India, a  task beset with difficulties, But it was a tough  endeavor  for him because he had to tackle powerful neighbors  Hyder Ali of Mysore, the Marathas, and the Nizam of Hyderabad who happened to be his  rivals, all forming the roadblock in tandem, in particular, Hyder Ali. The latter had  many confrontations with the British because in 1751 Nawab's refusal to surrender Tiruchirappalli to Hyder Ali as promised  before soured the relationship between Hyder Ali and East India Company.

The simmering revelry between Hyder Ali and Arcot Nawab finally began to boil over. As the British provocation in the aftermath of the seizure of the French port Mahe (which was under Hyder Ali) angered Hyder Ali, he, with a powerful army estimated at roughly 100,000 men,  on  23 July 1780  raided Arcot  and much of the ensuing war was fought on the Nawab's territory.

Being in a tight corner and to wiggle out of this quite disturbing situation, facing a formidable enemy,  Nawab of Arcot sought the help of the EIC's army. Just for  the defense of his territory, the Nawab paid the British 400,000 pagodas per year (about £160,000). The British sent 10 out of 21 battalions of the Madras army to the  garrison there. The huge income fleeced by the British came  from Nawab's  jagirs (land grants).  This is the first step by the British to strip the Nawab  to fill the British coffers to the

Officially the Company  enjoyed all real power though Muhammad Ali remained nominally the Dewan or revenue administrator, as well as the Nizam or military governor, while the Company took care of country's military defense.  To meet the cost of maintaining the military, etc  part of  Nawab's revenues was assigned for this purpose. The financial problem started when  EIC  demanded more and more money with each war. Having insufficient revenue and to meet the increasing demand of  military alliance fees the Nawab turned to  the servants of the Company, a wrong step taken by the ruler not worthy of his exalted status.

It is an interesting historical fact that the Arcot Nawab was a key factor in Westminster politics. The Nawab, to suite his style of functioning and building palatial palace, etc  had borrowed heavily and many of his creditors happened to be East India Company officials, in India or in the United Kingdom. It is quite surprising that  elections in the UK had a close link with  money from Nawab's treasury. Consequently, about a dozen Members of Parliament formed a  political group for promoting   "Arcot interest", as it was called. In the 1780s financial and other issues affecting Arcot had  a direct impact on British politics, especially the mounting debts the Arcot ruler owing to the company and individuals. The Nawab was like a man caught in the quick sands, slowly sinking with no solution in sight.

During the years of 1783-1830, the issue of the Nawab of Carnatic`s debts became  a subject of discussion and debate in the House of Commons and  Fox`s India Bill of 1783 was discussed  in detail. From 1767 to 1777, the Nawab owed to the servants of the British East India Company to the tune of 3,440,000 pounds, in deed a huge sum equal to the total annual income of some  important  European countries. The Company arranged for the Nawab to make annual payments of 480,000 pounds and saw  to it that the debt  was paid off by 1804. However at that time, the Nawab's fresh loan commitments stood at 30,000,000 pounds, a whooping sum one can ever imagine. In 1805 a commission of Bengal civilians, after through investigation into nature of loans, etc.,   determined that 2,687,000 pounds represented a valid total.

Arcot nawab's residence Amir mahal, Chennai.

The Nawab of Arcot was careless about his finances and gave more importance to the trappings associated with his royal status than his annual expenditure and revenue collections, a part of his administrative work. Being  a luxurious prince, Muhammad Ali moved from his own capital in Arcot to live amidst  luxuries of the British town of Madras. He had a palatial palace Amir Mahal (part of it is controlled by the state government) built closer to Ft St. George. His assumption was he would be much safer in Madras, a major British trading town.

Stringer Lawrence and Muhammed Ali Khan

 Above image: Major-General Stringer Lawrence (6 March 1697 – 10 January 1775) was an English soldier, the first Commander-in-Chief, India. He had a life-long friendship with Robert Clive and was the creator of Indian Army. .................................... 

With a view to freeing himself from debt that strangled him, Muhammad Ali assigned  his land revenues to his British money-lenders, as a result  virtually the whole of his territories passed into the hands of his creditors.  In this respect the British were ungrateful to the generous ruler Nawob Muhammad Ali Khan Wala-Jah (1752 to 1795) when he was unable to pay heavy debts - the annual fee of   £160,000.00 incurred as a result of  military assistance provided by the British and for the restoration of throne and kingdom from Chanda Sahib and his French alley. To  compensate unpaid  heavy debts, the British East India Company, under duress, took over the kingdom of the Carnatic, forcing the rich Nawob royal family to become a mere titular ruler, receiving one-fifth of the total revenue of the State for the maintenance of his palaces. The British cunningly shared the major portion of the pie. 

A diabolical diplomacy they had been following since the take-over of Bengal in the late 1700s, their first victim was Siraj-ud-Dualah, the Nawab of  Bengal.  The English company, under Robert Clive, set his own relatives against  the ruler and finally had the Nawab killed by them. However, it  took a while for the British to topple the Bengal Nawabs though there was no unity among the royal members. But in the case of Nawab of Arcot, a man of affable disposition, he fell like nine pins in the Bowling Ally before the scheming and diabolical British East India Company officials.

The British control over  the Carnatic had not only impacted the ruler and his country but also the people.  The Nawab's methods of collection of tax were, though  harsh, there was some kind of flexibility and consideration;  tax demands were made depending on the soil and  the produce from the land year to year. But when the Nawab's creditors appeared on the scene, they were harsh and no mercy was shown on the tillers/land owners.  The creditors were rude and very particular about collecting the revenue from the land owners. Remember the great Indian patriot Veerapandiya Kattabomman of Panchalamkuruchi (Thirunelveli District) who was hanged to death on 16 October 1799  by the British (under military officer Col. Bannerman) when he refused to pay the tax (Kisti) on the lands owned by him as a local ruler (Palayakaarar). The great early freedom fighter  refused to accept the sovereignty of the British East India Company.

The crux of the matter is the revenue  collected by the Nawab came back to the people by way of civil work, road or canal construction, etc. When the British money-lenders scooped the entire revenue from the lands, they left the country for good leaving the people, cottage industries, etc., in bad shape from which redemption was impossible.

Muhammad Ali lived a glorious life before the arrival of the British on the scene. Being an honest man lacking shrewdness, he fell a victim to the diabolical and dishonest tactics of the English company. He died from gangrene poisoning, at Madras on 13 October 1795. He was buried outside the gate of the Gunbad of Shah Chand Mastan, Trichinopoly.