Immediate Cause

The immediate cause was the dispute over Butwal and Syuraj. The King of Palpa obtained Butwal and Syuraj by paying land revenue to Nawab Bajir of Awadh. During the Unification Campaign when Palpa was brought under Nepal's control, Butwal and Syuraj automatically came under Nepal's territory. However, the British East India Company claimed its right over these two places. The problem could been solved peacefully. But the British East India Company needed some pretext to declare a war on Nepal. Lord Marquis of Hastings sent a threatening letter to Nepalese government demanding that they vacate the two places within 25 days or face war. However, Prime Minister Bhimsen Thapa of Nepal, a patriot as well, was not afraid of the British threat. Lord Hastings declared the war on Nepal on November 1, 1814 A.D. The army of the East India Company had already entered Nepal eight days prior to the formal declaration date of the war.

The Anglo-Nepal War lasted for two years. Nepalese soldiers fought the war bravely but nothing could work against the well-equipped and large army of the mighty British. Bhimsen Thapa appealed to the Indian princely states of Punjab, Gwalior, and Maratha to jointly fight against the British. However, these states did not support Nepal.

Eventually in February 1816 A.D. Nepal was forced to sign a treaty at Sugauli known as "the Treaty of Sugauli." If Nepal was unwilling to accept the defeat, Major General Ochterloni with 20,000 soldiers was prepared to attack Kathmandu.

Rajguru Gajraj Mishra accompanied by Chandra Shekhar Upadhya went to continue peace talks with British representative Major Bradsaw. The Treaty of Sugauli was signed on 4th March 1816 A.D.