When Madhav Rao I died in 1772, he was succeeded as peshwa of the Maratha Confederacy by his brother Narayan Rao. His reign ended abruptly the following year when he was murdered and was in turn succeeded by his uncle Raghunath Rao. Unfortunately for Raghunath, Narayan's wife was pregnant when her husband died and subsequently gave birth to a son also called Madhav Rao. Nana Fadnavis, a Maratha chief, saw the young Madhav Rao as the rightful peshwa, and Nana wanted to act as his chief regent.
Raghunath Rao did not like the idea of being deposed and looked towards the British at Bombay for help, signing the Treaty of Surat on 6 March 1775. The British received territory and revenues, and in return they promised military support. Unfortunately for the desperate peshwa, the Supreme Council of Bengal at Calcutta, the highest British authority in India at the time, objected to the treaty and replaced it with the Treaty of Purandhar in March 1776.
Raghunath Rao was forced to abandon his claim as peshwa and left to live under the protection of the British. Nana, meanwhile, fatefully upset the British when he allowed the French the use of a port on the west coast.
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