Why was the british east india company empowered to act on behalf of the british crown?

Commercial company (1600 - 1858) chartered by Queen Elizabeth I and given a monopoly of trade between England and the Far East. In the 18th century, the company became, in effect, the ruler of a large part of India, and a form of dual control by the company and a committee responsible to Parliament in London was introduced by Pitt's India Act 1784. The end of the monopoly of China trade came in 1834, and after the Indian Mutiny of 1857 - 58 the crown took complete control of the government of British India. The India Act 1858 abolished the company. 

The East India Company set up factories in Masulipatam, near modern Madras (now Chennai), in 1611 ; on the west coast of India in Surat in 1612 ; on the east coast in Madras in 1639 ; and near Calcutta (now Kolkata) on the Hooghly (one of the mouths of the Ganges) in 1640. By 1652 there were some 23 English factories in India. Bombay (now Mumbai) came to the British crown in 1662, and was granted to the East India Company for £ 10 a year. The British victory in the Battle of Plassey in 1757 gave the company control of Bengal.

Hoped he would accept their demands and end the violence