Battle of Buxar The Battle of Buxar was fought on 23 October 1764 between the forces under the command of the British East India Company led by Hector Munro and the combined army of Mir Qasim , the Nawab of Bengal ; Shuja - ud - Daula the Nawab of Awadh and the Mughal King Shah Alam II The battle fought at Buxar , then within the territory of Bengal , a town located on the bank of the Ganges river about 130 km west of Patna , was a decisive victory for the British East India Company . Battle . British troops engaged in the fighting numbered 7 , 072 comprising 857 British , 5 , 297 Indian sepoy s and 918 Indian cavalry . The alliance army ' s numbers were estimated to be over 40 , 000 . By other sources , the combined army of the Mughals , Awadh and Mir Qasim consisting of 40 , 000 men were defeated by British army consisting 10 , 000 men . The Mughal camp was internally broken due to a quarrel between the Mughal Emperor Shah Alam II and Shuja - ud - Daula the Nawab of Awadh ; Mir Qasim was reluctant to engage the British and went off collecting tribute . The lack of basic co - ordination among the three desperate allies was responsible for their decisive debacle . Mirza Najaf Khan commanded the right flank of the imperial army and was the first to advance his forces against the anticipating Hector Munro at daybreak , the British lines quickly formed within twenty minutes and reversed the advance of the Mughals . According to the British , Durrani and Rohilla cavalry were also present and fought during the battle in various skirmishes . But by midday the battle was over and Shuja - ud - Daula blew up large tumbrils and three massive magazines of gunpowder . Leaving 6 , 000 fellow Mughal loyalists and 133 pieces of artillery on the battlefield . Hector Munro divided his army into various columns and particularly pursued the Mughal Grand Vizier Shuja - ud - Daula the Nawab of Awadh , who responded by blowing up his boat - bridge after crossing the river , thus abandoning the Mughal Emperor Shah Alam II and members of his own regiment . Mir Qasim also fled with his 3 million rupees worth of Gemstone s and later even committed suicide . Mirza Najaf Khan reorganized formations around Shah Alam II , who retreated and then chose to negotiate with the victorious British . British losses are said to have been 1 , 847 killed and wounded , while the three Indian allies accounted for 2 , 000 dead ; many more were wounded . The victors captured 133 pieces of artillery , 6 , 000 Mughals and over 1 million rupees of cash . Immediately after the battle Hector Munro decided to greatly assist the Marathas , who were described as a " warlike race " , well known for their relentless and unwavering hatred towards the Mughal Empire and its Nawab s and the Sultanate of Mysore . Aftermath . Treaty of Allahabad . The prime victim , Shah Alam II , signed the Treaty of Allahabad that secured Diwani Rights for the Company to collect and manage the revenues of almost of real estate , which form parts of the modern states of West Bengal , Odisha , Bihar , Jharkhand , and Uttar Pradesh , as well as in the neighbouring areas of Bengal . He was also forced to pay a war indemnity of five million rupees . However , all his pre - war possessions were returned except for the districts of Karra and Allahabad . Shah Alam II became a pensioner with a monthly stipend of 450 , 000 rupees towards upkeep of horses , sepoy s , peons , barkandazi s ( matchlock men ) and household expenses . Mir Qasim , who was not a general , was quietly replaced . He also received a small share of the total land revenue , initially fixed at 2 million rupees . The Treaty of Allahabad heralded the establishment of the rule of the East India Company in one - eighth of India proper with a single stroke . The battles of Plassey and Buxar secured a permanent foothold for the British East India Company in the rich province of Bengal , and secured its political ascendancy in the entire region . Buxar should be seen in conjunction with the third battle of Panipat in January 1761 in terms of its impact on consolidating British presence in north - east India . By the treaty of 1752 , the Marathas had essentially taken over administration of all the subahs of the Mughal empire , and had established their right to collect Chauth across these subahs . In return , they would protect the north - west frontier of the Mughal empire from Afghan invasion . This resulted in nine years of Maratha - Afghan struggle to establish control over the empire , and the subah of Punjab , which was claimed by both . However , due to the Marathas ' defeat at the third battle of Panipat , and their subsequent ten - year hiatus from North Indian affairs , the British were able to establish a foothold in North Indian affairs . Buxar was an important step in that direction . Nawab Shuja - ud - Daula was restored to Oudh , with a subsidiary force and guarantee of defence , the emperor Shah Alam II solaced with Allahabad and a tribute and the frontier drawn at the boundary of Bihar . For Bengal itself the Company took a decisive step . In return for restoring Shah Alam II to Allahabad , the Company got from him the imperial grant of the diwani or revenue authority in Bengal and Bihar . This had hitherto been enjoyed by the nawab of Bengal . Thus now there was a double government , the nawab retaining judicial and police functions but the Company exercising the revenue power . The Company was acclimatised , as it were , into the Indian scene by becoming the Mughal revenue agent for Bengal and Bihar . There was as yet no thought of direct administration , and the revenue was collected by a Company - appointed deputy - nawab , Muhammad Reza Khan . But this arrangement made the British East India Company the virtual ruler of Bengal , since it already possessed decisive military power . All that was left to the Nawab was the control of the judicial administration . But he was later forced to hand this over to the Company in 1793 . Thus the company ' s control was virtually complete . In spite of all this the East India Company was again on the verge of bankruptcy , which stirred the British to a fresh effort at reform . On the one hand Warren Hastings was appointed with a mandate for reform ; on the other an appeal was made to the British state for a loan . The result was the beginnings of state control of the Company and the thirteen - year governorship of Warren Hastings . Hastings ' s first important work was that of an organiser . In the two and a half years before the Regulating Act came into force he put in order the whole Bengal administration . The Indian deputies who had collected the revenue on behalf of the Company were deposed and their places taken by a Board of Revenue in Calcutta and English collectors in the districts . This was the real beginning of British administration in India . It should also be noted that when the Marathas finally did send a large force back into North India in 1771 , they were able to persuade Shah Alam II to leave British protection and enter Maratha protection . They then established Maratha regency over Delhi , which they essentially held till their defeat in the Second Anglo - Maratha War of 1803 .