After Baji Rao’s premature death, Sahu conferred the office of Peshwa on the former’s eldest son Balaji Baji Rao, who was then only 19 years of age. The two decades from 1740 to 60 formed a landmark in the history of Deccan. It was during this period that the Marathas invaded Karnataka and defeated Nawab Dost Ali. They captured Arcot and Trichinopoly and imprisoned Chanda Saheb, an ally of the French. Nizam-ul-Mulk resented this Maratha aggression as he considered it to be an intervention in his sphere of interest.
In 1743 he invaded Karnataka and campaigned for five years, occupied Arcot where he posted Anwar-ud-din as Governor and took possession of Trichinopoly. This was his last military victory. He died in May 1748. Nizam-ul-Mulk was succeeded by his son Nazir Jung whose claim was contested by his sister’s son Muzaffar Jung. Chanda Saheb, who escaped from Maratha captivity, Anwar-ud-din, the French and the British were involved in this war of succession which is described at length in an earlier chapter.
At Hyderabad Nazir Jung and Muzaffar Jung fought each other for the throne. But both were murdered in a campaign in Karnataka during 1750-51. This cleared the path for the entry of the French into South Indian politics.
Bussy, the Deputy of the French Governor-General proclaimed Salabat Jung as the Nizam and was escorting him to Hyderabad. Now Peshwa Balaji Rao led his forces to Panagal and opposed the Nizam. Later after prolonged discussion it was decided that the Nizam should pay 17 lakhs of rupees to the Marathas for their non-interference in the succession question at Hyderabad and another 3 lakhs for the withdrawal of the Maratha forces from the region.
The old competition was resumed immediately after the set up of Salabat Jung at Hyderabad. Bussy assumed the role of a dictator of the Nizam. Soon situation became worse and war seemed an inevitable remedy. The Peshwa led his forces to Aurangabad in October 1751. Bussy and Salabat Jung crossed the Godavary in November 1751 and ravaged the Maratha districts.
A decisive fight ended in the victory of the Marathas. The Nizam was finally forced to conclude a treaty with the Peshwa, known as the Treaty of Singwa, on 6th January 1752 by which the rivals withdrew to their pre-war positions. Meanwhile some other complications arose and this caused military clashes. Here again the Nizam was forced to sue for peace. By the terms of the Treaty of Bhalki (1752) Salabat Jung ceded to the Peshwa the western half of Berar between the Tapti and the Godavary including Baglana and Khandesh. As A.C. Banerji noted, “The liberation of a large part of Maratha homeland from the Mughal yoke was no small gain.”
Even after the Treaty of Bhalki, Nizam Salabat Jung had a series of obstacles on his way especially during 1753-57, when Marathas sent several expeditious to the Karnataka region. The motives of the Maratha expeditions were to subjugate the four Nawabs of Aurangzebean days, those of Sira, Savanur, Kurnool and Cudappah. Though Arcot escaped practically as a result of the assistance of the English to Anwar-ud-din, victory was achieved by the Maratha forces in all other cases.
Meanwhile Bussy strengthened his grip over the affairs of Hyderabad and kept the Nizam under restraint. In 1759 Salabat Jung handed over full power to his brother Nizam Ali who became the de facto ruler of the Asaf Jahi State. He began a career of aggrandisement and obtained much prominence. At the same time the Peshwa Balaji Baji Rao sent several expeditions into eastern and western Karnataka and occupied many important places. He launched another attack against Aurangabad in December 1757.
Even though Nizam Ali offered resistance, he was beaten back. Nizam Ali was forced to cede territories worth 25 lakhs including the fort of Naldurg. The temporary truce did not last long. The Marathas captured such historic places as Ahmednagar, Daulatabad, Burhampur and Bijapur. Nizam Ali’s counter-offensive brought about his downfall. The Maratha general was the cousin of the Peshwa, Sadasiva Rao Bhau, son of Chimanaji Appa.
The crushing defeat of Nizam Ali at the battle of Udgir (February 1760) routed his forces. His territorial losses were heavy. The victory at Udgir for the Peshwa Balaji Baji Rao diverted his attention to North India for some time. But the rout of the Marathas in the third battle of Panipat in January 1761 saved the Asaf Jahi state from further defeats and destruction.
The naval defense of the west coast was in the charge of the Angrias whose family feuds and hostility towards the Peshwas created very serious problems. When the English and French companies began to take active and direct interest in South Indian politics, the position changed fundamentally.
In 1755 Balaji Baji Rao, the Peshwa, entered into a treaty with the English for joint action against Tulaji Angria whose central seat was at Vijayadrug or Gheria. This fort was captured and Tulaji was imprisoned, which step furthered the cause of the Marathas considerably. Balaji Baji Rao’s Peshwaship coincided with the Anglo-French struggle in South India and his policy was affected by the political rivalry of the European colonial companies.