Background
After the death of Madhavrao Peshwa in 1772, his brother Narayanrao became Peshwa of the Maratha Empire. However, Raghunathrao, Narayanrao's uncle, had his nephew assassinated in a palace conspiracy that resulted in Raghunathrao becoming Peshwa, although he was not the legal heir.
Narayanrao's widow, Gangabai, gave birth to a posthumous son, who was legal heir to the throne. The newborn infant was named 'Sawai' Madhavrao (Sawai means “One and a Quarter”). Twelve Maratha chiefs, led by Nana Phadnavis directed an effort to name the infant as the new Peshwa and rule under him as regents.
Raghunathrao, unwilling to give up his position of power, sought help from the British at Bombay and signed the Treaty of Surat on 6 March 1775. According to the treaty, Raghunathrao ceded the territories of Salsette and Bassein to the British, along with part of the revenues from Surat and Bharuch districts. In return, the British promised to provide Raghunathrao with 2,500 soldiers.
The British Calcutta Council condemned the Treaty of Surat, sending Colonel Upton to Pune to annul it and make a new treaty with the regency. The Treaty of Purandhar (1 March 1776) annulled that of Surat, Raghunathrao was pensioned and his cause abandoned, but the revenues of Salsette and Broach districts were retained by the British. The Bombay government rejected this new treaty and gave refuge to Raghunathrao. In 1777 Nana Phadnavis violated the treaty with the Calcutta Council by granting the French a port on the west coast. The British replied by sending a force towards Pune. The tangle was increased by the support of the London authorities for Bombay, which in 1778–79 again supported Raghunathrao. Peace was finally restored in 1782.
Read more about this topic: First Anglo-Maratha War
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