The English East India Company first acquired a foothold in southern Panjab during the second Anglo-Maratha War with the signing of the Treaty of Surji Arjungaon in 1803. This treaty gave the Company formal possession of the Maratha domains west of the Yamuna River. The Marathas’ role as agents and protectors of the Mughal emperor likewise passed to it. These provisions secured an important strategic aim, namely that the region and the symbolically powerful Mughal court be prised from the grasp of the Marathas and, more importantly, from that of their powerful French generals. In the global context of the Napoleonic wars, this would, it was hoped, prevent the French from attacking the Company's Indian possessions via its western frontier.

From 1803 onwards, the Company began the long process of determining just how much of southern Panjab had been under Maratha or Mughal rule and how much of this territory it in fact wanted to govern. Since much of the region was thought to be arid and unproductive, Governor-General Wellesley initially adopted a policy of indirect rule. Lord Lake, the Commander-in-Chief of the Company's Indian armies, and his assistant, Charles Metcalfe, were given the authority to issue charters (sanad) to the various jagirdars as well as autonomous chieftains who held land in the newly acquired domains, confirming their grants and associated privileges in return for their acceptance of the Company's supremacy.