This project draws upon the colonial archive of Lunatic Asylum records in Bengal (1860-1925) to examine how the nineteenth-century theory of "moral insanity" perpetuated colonial paranoia regarding the native subject’s latent potential for violence. While insanity was theorized differently for various subgroups of the population, the general theory of the “native psyche” was intimately intertwined with this notion of simmering, undetectable emotionality that escaped surveillance. Bengal’s asylums were fragmented sites of knowledge formation, discipline, experimentation with “moral” treatment, and incarceration. Tracing the presence and omission of moral insanity and its proximate cause, grief, through the archive, I uncover a genealogy that demonstrates how racialized pathologization of emotion became embedded into twentieth-century diagnostic categories. These categories, constructed around presuppositions of violence and instability, were then solidified through repressive legalization and obscured by new, scientifically validated psychiatric terminology. Drawing on psychoanalytic frameworks, I analyze colonial paranoia as an unstable systemic logic that framed emotional instability, particularly grief, as a destabilizing affective force that threatened the colonial order. Beginning with the archive’s incipient narratives in the wake of the 1857 Rebellion, I argue that this paranoia engendered an ongoing paradox between cure and confinement that deepened in response to rising nationalist agitation. The permeability of the asylum rendered it a significantly distinct space from jails, wherein colonial civilizing logics fissured under the pressure of their own internal contradictions. This tension culminated in the 1912 Indian Lunacy Act, which further entrenched the medicalization and criminalization of insanity—a process that continues to influence contemporary attitudes toward mental illness in the postcolony. Contextualized by the political resistance movements of the time, I incorporate micro-narratives and medical perspectives from the archive, critique the taxonomy of the data, and engage a range of secondary sources, including critical psychiatry, postcolonial theory, and analyses of vernacular literature from the period.