Ambala was the capital of the Nishanwalia Misl. Nishanwalia was one of 12 Sikh states that divided the territory of Punjab among themselves, it was ruled by Gill Jats of Sher sept. Nishanwalia means a standard or a banner, and Nishanwala means a flag bearer.
In 1733, the Sikhs had accepted the terms of Zakariya Khan, viceroy of the Punjab. They settled at Amritsar. There it was decided that the Khalsa should have five flags. They were to be worshipped in a solemn ceremony, when the Khalsa would start on an expedition, and offerings would be made to the flags. At the conclusion of an expedition further offerings were to be made to the standards as a token of gratitude. Dasaundha Singh the founder of the Nishanwalia state and his four companions, Sangat Singh, Jai Singh, Koer Singh of Kairon and Man Singh Dandak, carried the five flags of the Dal Khalsa on horseback in the forefront, hence the Misl came to be known as Nishanwalia.
Dasaundha Singh, was a Gill Jat son of Chaudhary Sahib Rai of village Mansur in Firozpur district. At the young age his moustaches turned white and so he was called Dhaul Muchhiya. Dasaundha Singh took pahul from Bhai Mani Singh. In 1734 he was one of the leaders of the Taruna Dal. In 1748 he was declared the leader of the Nishanwala Misl at the time of the formation of the Dal Khalsa. The Nishanwala and Dalewalia misls were kept as a reserve force at Amritsar.
In January, 1764, after the conquest of Sarhind province Dasaundha Singh took possession of Singhanwala in Firozpur district, Sanahwal, 15 kms east of Ludhiana, Sarae Lashkari Khan, 13 kms west of Khanna, Doraha, 7 kms from Sanahwal, Amloh, Zira, Ludhar and Ambala, where he established his headquarters. He was killed in May, 1767, at Meerut in the sudden attack by Jahan Khan and Zabita Khan.
His younger brother, Sangat Singh, succeeded him. He built a brick wall around the city of Ambala to protect it from robbers and marauders. He appointed his cousins, Gurbakhsh Singh and Lal Singh, paternal uncle’s sons in charge of Ambala and himself retired to Singhanwala in Firozpur district, where he died in 1774. Lal Singh began to build a fort near the border of Patiala State at a place called Jamaitgarh, and he began to live there. Raja Amar Singh of Patiala, Raja Gajpat Singh of Jind and Rae Ilyas of Raekot attacked Lal Singh, but the construction continued.
Lal Singh had three sons who drove out Gurbakhsh Singh. Gurbakhsh Singh settled at Morinda on the Chandigarh-Ludhiana road. They divided the territories among themselves.
At that time Mohar Singh was the chief of Ambala, and he signed the treaty with Mahadji Sindhia on 9 May, 1785. He died Issueless and his widow Daya Kanwar became the ruler of Ambala.
Her state was one of the best managed in the Protected Territory in the Punjab.Her Diwan or deputy was Sipahimal Bhandari. He was a strict admin trator. He did not use any leniency in sex matters, The names Daya Kanwar and Sipahimal are even at the present day househola city, of words in the old native families. Shri Des Raj Mittal of Ambala cit an octogenarian, told the author that if a man and woman were seen freely talking or laughing on a public thoroughfare, they were immediately hauled up before Sipahimal and were punished. His residence in Mohalla Khatrian in the city was called Zulumgarh or an abode of cruelty. Not to speak of any dacoity or murder, even theft or pilfering was a rare occurrence. The British government treated her with great courtesy and consideration.
In November, 1808, Maharaja Ranjit Singh’s fury uprooted this innocent woman. He ejected Daya Kanwar from the city, usurped all her property and treasures, and seized her territories. He distributed her country between Raja Bhag Singh.of Jind, his maternal uncle, and Bhag Singh’s closest friend and ally Lal Singh of Kaithal.
To avoid any popular rising in favour of Daya Kanwar, he left a strong force of 5,000 under his commander Ganda Singh Safi at Ambala. According to Giani Gian Singh he was designated his governor of the Cis-Satluj province. The Maharaja went to Hardwar have a dip in the Ganga. On his way back he squeezed money from the sons of late Karam Singh Nirmala of Shahabad.
Bhanga Singh of Thanesar did not come to see him. Ranjit Singh reached there, and forced Bhanga Singh, the most ferocious of all Sikh sardars, to accompany him. Finding the British army ready to face him at Karnal and Charles Matcalfe behind him at Malerkotla, Ranjit Singh fell back.
In 1809 by the treaty of Amritsar, the Cis-Satluj chiefs passed under the British protection. Daya Kanwar appealed to Colonel Ochterlony. He forced the chiels of Jind and Kaithal to withdraw their troops and restored Daya Kanwar to be the mistress of her territories. On her death in 1825 her estates and property lapsed to the British Government.