After suppression of revolt of the farmers of Banaras in 1781, the farmers of Ayodhya flared up with their demands.The East India Company was forcing the land lords of Ayodhya to compensate the growing expenses of the British soldiers and forced them to lent more lands. For want of support from other sections of the society the revolt of the farmers were defeated by the powerful soldiers of the feudalists. The heavy presure of taxation of the British brought famine in Ayodhya, even then Hastings did not reduce the tax. Hence forth the Nawab of Ayodhya was rescued by the soldiers of British from the hands of the famine-distressed farmers.
Moreover, to maitain the balance of fund of the treasury, some feudals had to loose their property in the hands of the East india Company. This was another reason of displeasure among the feudalsts of Ayodhya. Under the leadership of the adopted and exiled son of the ex-Nawab, Oazed Ali, the feudals ( both Hindu and Muslim) became united.All the traders of Bengal along with the Armenians of Calcutta and the soldiers of Ayodhya supported Oazed Ali. He also took the support of the leaders of Rohila, King of Maratha of Gwalior. He sent representative to Jaman Shah of Afghanisthan requesting him to attack India (British). With the same intention he signed a treaty with French. But The British was curious about his behaviour and asked him to go to Calcutta.Oazed Ali refused it and revolted which was unplanned and immature. Very easily British subdued the revolt and Oazed Ali was sent Calcutta..