Explanation:

Correct Option: (b) Explanation:  Statement 1 is incorrect: Under this system, the Company directly controlled the fi nances and the army while indirectly controlled the administration of the province. Dual System of Administration of Bengal  The East India Company became the real master of Bengal from 1765. Its army was in sole control of its defense and the supreme political power was in its hands.  The Nawab depended for his internal and external security on the British.  As the Diwan, the Company directly collected its revenues, while through the right to nominate the Deputy Subahdar; it controlled the Nizamat or the police and judicial powers. The virtual unity of the two branches of Government under British control was signi fi ed by the fact that the same person acted in Bengal as the Deputy Diwan on behalf of the Company and as Deputy Subahdar on behalf of the Nawab. This arrangement is known in history as the Dual or Double Government.  It held a great advantage for the British: they had power without responsibility. They controlled the fi nances of the province and its army directly and its administration indirectly.  The Nawab and his offi cials had the responsibility of administration but not the power to discharge it. The weaknesses of the Government could be blamed on the Indians while its fruits were gathered by the British.  The consequences for the people of Bengal were disastrous: neither the Company nor the Nawab cared for their welfare. Topic: Modern History Sub-Topic: Dual Administration after battle of plassey