In the same year Sindhia carried out the investiture of the Peshwa with the insignia of Vakil-ul-Mutlak. During the ceremony he professed the greatest humility, even insisting on bearing the Peshwa's slippers, as his father had served an earlier Peshwa. The old Maratha nobles, however, were disgusted, and refused to attend or offer the usual complimentary gifts to Sindhia. De Boigne defeated the forces of Tukaji Holkar at Lakheri on 1 June 1793. Mahadji was now at the zenith of his power, when all his schemes for further aggrand-izement were cut short by his sudden death in 1794 at Wanowri near Pune.

Daulatrao Sindhia (1794-1827)
Main article: Daulatrao Sindhia
Mahadji left no heir, and was succeeded by Daulat Rao, a grandson of his brother Tukaji, who was scarcely 15 years of age at the time. Daulat Rao looked upon himself as the chief sovereign in India and not as member of the Maratha Confederacy. At this time the death of the young Peshwa, Madhu Rao II (1795), and the troubles which it occasioned, the demise of Tukaji Holkar and the rise of the turbulent Jaswant Rao Holkar, together with the intrigues of Nana Farnavis, threw the country into confusion and enabled Sindhia to gain the ascendancy. He also came under the influence of Sarje Rao Ghatke, the most unprincipled scoundrel of his day, whose daughter he had married (1798). Urged possibly by this adviser, Daulat Rao aimed at increasing his dominions at all costs, and seized territory from the Maratha Ponwars of Dhar and Dewas. The rising power of Jaswant Rao Holkar of Indore , however, alarmed him.

In July 1801, Jaswant Rao appeared before Sindhia's capital of Ujjain , and after defeating some battalions under John Hessing, extorted a large sum from its inhabitants, but did not ravage the town. In October, however, Sarje Rao Ghatke took revenge by sacking Indore , razing it almost to the ground, and practicing every form of atrocity on its inhabitants. From this time dates the gardi-ka-wakt, or 'period of unrest', as it is still called, during which the whole of central India was overrun by the armies of Sindhia and Holkar and their attendant predatory Pindari bands, under Amir Khan and others. De Boigne had retired in 1796; and his successor, Pierre Cuillier-Perron, was a man of a very different stamp, whose determined favouritism of French officers, ind defiance of all claims to promotion, produced discontent in the regular corps. Finally, on December 31, 1802, the Peshwa signed the Treaty of Bassein, by which the British were recognized as the paramount power in India .

The continual evasion shown by Sindhia in all attempts at negotiation brought him into conflict with the British, and his power was completely destroyed in both western and northern India by the British victories at Ahmadnagar, Assaye, Asirgarh, and Laswari. His famous brigades were annihilated and his military power irretrievably broken. On December 30, 1803, he signed the Treaty of Sarji Anjangaon, by which he was obliged to give up his possessions between the Yamuna and the Ganges, the district of Bharuch, and other lands in the south of his dominions; and soon after by the Treaty of Burhanpur he agreed to maintain a subsidiary force to be paid for out of the revenues of territory ceded by the treaty. By the ninth article of the Treaty of Sarji Anjangaon he was deprived of the fortresses of Gwalior and Gohad, The discontent produced by the last condition almost caused a rupture, and did actually result in the plundering of the Resident's camp and detention of the Resident as a prisoner.