After the death of Aurangzeb the whole of Karnatak was in a state of chaos. The various principalities were trying to extend their territory at the cost of their neighbours. Karnatak then roughly included the territory to the south of Krsna bound by the Sahyadri and the Eastern Ghats. Aurangzeb had put Karnatak under the subhas of Bijapur and Hyderabad, the sanad of Cauthai granted to Sahu by Emperor Muhammad sah included Hyderabad and Bijapur Karnatak in addition to the four other Subhas of the Deccan. According to this sanad the tributary states of Tanjore, tricinopoly and Mysore were also subject to the levy of Cauthai, the Nizam -ul-mulk as the SUBHEDAR of the Deccan claimed that all these territories belonged to him, the various NAVABS of Karnatak fought among themselves, the strongest of them trying to assert his authority over others by the simple law of might. The stronger Navabs were those of Arcot. Sira, Kadappa, Karnool and Savanur. The principality of Tanjore from the days of Sahaji comprised the Paraganas of Bangalore, Hoskot, Kolar, Balapur and Sira. Its ruler Pratapsinha, Chatrpati Sahu's cousin, was constantly harassed by Chanda Saheb, the son-in-law of Dost Ali, the Navab of Arcot. Chanda Saheb had usurped the kindom of tricinopoly by tempting its Rani Minaksi to form perpetual friendship with him. With the fall of Tricinopoly by tempting its Rani Minaksi to form perpetual friendship with him. With the fall of Tricinopoly he cost his covetous eyes on Tanjore which belonged to Raja Pratapsinha. Pratapsinha appealed to sahu for help who dispatched a large force under Fatehsingh and Raghuji Bhosle. In April 1740 the Maratha forces attacked Arcot. Killed the Navab Dost Ali and took his Diwan Mir Asad, a prisoner in May 1740. With Arcot in their possession Raghuji and Fatehsingh laid siege to Tricinopoly, the stronghold of Chanda Saheb. Raghuji was joined by pratapsinha. A canda Saheb unable to receive aid from his brother Bada Saheb of Madura delivered the fort to Raghuji on 14th March 1741, the auspicious day of Ramanavani, Chanda Saheb and his son abid Ali were imprisoned by Raghuji and at once sent to Nagpur under the strict supervision of his general Bhasker Ram. Later, in 1744 Raghuji freed these royal prisoners on payment of a ransom of Rs. 7.25 lacs from the bankers of Satara. Nothing is known about the place where Chanda Saheb and his son were confined. Raghuji's leadership and tact in the Karnatak campaign at once enhanced his prestige at the court of Sahu. Pleased with his exploits Sahu conferred upon him the Mokasa of Berar and Gondavana up to the frontiers of Katak.

During the war Chanda saheb had sent his treasure and ZANANA for safe custody to Dumas. The French Governor of Pondicery. Raghuji who had an eye on the wealth of the Navab, at once reprimanded Dumas for sheltering his enemy. Dumas politely yet firmly refused to surrender the entrusted wealth and women. Raghuji's wrath was wafted away when he was presented a few fine champagne bottles by Dumas. Raghuji wife is said to have been highly delighted with this French gift and asked for more. When Sahu came to know of this he is reported to have remarked that a kingdom was sold for a bottle of wine. Wahtever the account of this story, its realistic side must not be lost sight of by historians. Dumas at pondicerry was well-equipped with men and material. In the extreme hour of difficulty he would have easily escaped into the sea with his wealth and woman, and Raghuji's attack would have been rendered ineffective if he had chosen to launch one. Raghuji was not slow to understand the power of the French. Weighing things in mind Raghuji might have preferred an honourable retreat to a futile attact.

Karnatak campaign gave Raghuji eminence at the court of Satara and eventually in the Maratha confederacy. It helped him in giving a status on par with the Pesvas.

Raghuji hurriedly returned to Nagpur as the Bengal affair was awaiting his presence.