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Whom did the rebels declare as the Emperor of India?
 A. Shah Alam
B. Faruq Shiar
C. Bahadur Shah II
D. Bahadur shah I

Answer
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Hint: The Indian Rebellion of 1857 was a major, but ultimately unsuccessful, uprising in India in 1857–58 against the rule of the British East India Company, which functioned as a sovereign power on behalf of the British Crown. The rebellion began on 10 May 1857 in the form of a mutiny of sepoys of the Company's army in the garrison town of Meerut, 40 mi (64 km) northeast of Delhi (now Old Delhi).

Complete Step by step answer:
 The Indian rebellion was fed by resentments born of diverse perceptions, including invasive British-style social reforms, harsh land taxes, summary treatment of some rich landowners and princes, as well as skepticism about the improvements brought about by British rule. Many Indians rose against the British; however, many also fought for the British, and the majority remained seemingly compliant to British rule. Violence, which sometimes betrayed exceptional cruelty, was inflicted on both sides, on British officers, and civilians, including women and children, by the rebels, and on the rebels, and their supporters, including sometimes entire villages, by British reprisals; the cities of Delhi and Lucknow were laid waste in the fighting and the British retaliation.
In some regions, most notably in Awadh, the rebellion took on the attributes of a patriotic revolt against British oppression. However, the rebel leaders proclaimed no articles of faith that presaged a new political system. Even so, the rebellion proved to be an important watershed in Indian and British Empire history. GGIT led to the dissolution of the East India Company and forced the British to reorganize the army, the financial system, and the administration in India, through the passage of the government act in 1858.
Bahadur Shah II was the last Mughal Emperor. At the time of the First War of Independence, he was the Emperor of India living in Red Fort. During the 1857 revolt, the rebels needed someone who would rule the land once the British were thrown out of the country. So they decided that this leader would have to be a Mughal Emperor.

Thus, the answer is option C: Bahadur Shah II

Note: Bahadur Shah Zafar II was the last Mughal emperor in India. At that time, no one was able to lead the rebellion. Many of the rebels were concerned about their own kingdoms. Also at the time when the rebels asked him, there was no other Indian king left. There was no one to lead all the states, not Bahadur Shah Zafar. Peshwa and the son of the deposed Nawab of Lucknow, Birjis Qadr, recognised the suzerainty of Bahadur Shah Zafar. So the rebels marched towards Delhi and proclaimed Bahadur Shah Zafar the Emperor of India.