The Sugauli Treaty (also spelled Segowlee and Segqulee) was signed on 2 December 1815 and ratified by 4 March 1816 between the East India Company and King of Nepal following the Anglo-Nepalese War in the years 1814-16. The signatory for Nepal was Raj Guru Gajaraj Mishra aided by Chandra Shekher Upadhyaya and the signatory for the Company was Lt. Col. Paris Bradshaw. The treaty called for territorial concessions in which parts of Nepal will be given to British India, the establishment of a British representative in Kathmandu, and allowed Britain to recruit Gurkhas for military service. Nepal also lost the right to deploy any American or European employee in its service (earlier several French commanders had been deployed to train the Nepali army).
Under the treaty, about one-third of Nepalese territory was lost including all the territories that the King of Nepal had won in wars in the last 25 years or so such as Sikkim in the east, Kumaon Kingdom and Garhwal Kingdom in the west and much of the Terai in the south. Some of the Terai lands were restored to Nepal in 1816. More Terai lands were restored to Nepal in 1860 to thank Nepal for helping the British to suppress the Indian rebellion of 1857.
The British representative in Kathmandu was the first Westerner allowed to live in the post-Malla Era Nepal. (It is to be noted that few Christian missionaries operating were deported by the Gurkhas after conquering Nepal during mid 18th century). The first representative was Edward Gardner, who was installed at a compound north of Kathmandu. That site is now called Lazimpat and is home to the Indian and British embassies. The Sugauli Treaty was superseded in December 1923 by a "treaty of perpetual peace and friendship," which upgraded the British resident to an envoy. A separate treaty was signed with India (independent by now) in 1950 which restored fresh relations between the two as independent countries.
Sugauli treaty and Mithila 
In 1816, East India Company signed a treaty with the Kingdom of Gorkha (Nepal), which led to the end of the two-year-long Anglo-Nepali war. Under this treaty, a part of Mithila was conceded from India to Nepal. This region was popularly called Eastern Terai or Mithila in Nepal.
Since the Sugauli Treaty, Nepal holds the control over the Northern parts (minor portion) of Mithila, while the Southern Parts (Major portion) remain under the control of India.
Until the Sugauli Treaty 
Until the Sugauli Treaty was signed, the territory of Nepal also included Darjeeling and Tista to the east, Nainital to the south-west and Kumaon Kingdom, Garhwal Kingdom and Bashahar to the west. These areas had been won by Nepal in the last 25 years or so and should have been handed back to Nepal after East India Company (British Rule) from India left.
Terms of Sugauli Treaty 
After the Anglo-Nepalese War, a treaty of peace and friendship was signed between the government of Nepal and the East Company. It was agreed upon on 2 December 1815 by Raj Guru Gajaraj Mishra aided by Chandra Shekher Upadhyaya on behalf of the government of Nepal and Lt. Col. Paris Bradshaw on behalf of the Company. The signed copies of the treaty were exchanged on 4 March 1816 at Makawanpur by Chandra Sekhar Upadhayay and General David Ochterlony. The terms of the treaty were as follows:-
- There shall be perpetual peace and friendship between the East India company and the king of Nepal.
- The king of Nepal will renounce all claim to the lands which were the subject of discussion between the two States before the war; and will acknowledge the right of the company to the sovereignty of those lands.
- The king of Nepal will cede to the East India company in perpetuity all the under mentioned territories: i) The whole of low lands between the rivers Kali and Rapti. ii) The whole of low lands between Rapti and Gandaki, except Butwal. iii) The whole of low lands between Gandaki and Koshi in which the authority of the East India company has been established. iv) The whole of low lands between the rivers Mechi and Teesta. v) The whole of territories within the hills eastward of the Mechi river. The aforesaid territory shall be evacuated by the Gorkha troops within forty days from this date.
- With a view to indemnify the chiefs and Bhardars of Nepal, whose interest will suffer by the alienation of the lands ceded by the foregoing Article (No. 3 above), the East India company agrees to settle pensions to the aggregate amount of two lakhs of rupees per annum on such chiefs as may be decided by the king of Nepal.
- The king of Nepal renounces for himself, his heirs, and successors, all claim to the countries lying to the West of the River Kali, and engaged never to have any concern with those countries or the inhabitants thereof.
- The king of Nepal engages never to molest or disturb the king of Sikkim in the possession of his territories. If any difference shall arise between Nepal and Sikkim, it shall be referred to the arbitration of the East India company.
- The king of Nepal hereby engages never to take or retain in his service any British subject, nor the subject of any European or American State, without the consent of the British Government.
- In order to secure and improve the relations of amity and peace hereby established between Nepal and Britain (East India company), it is agreed that accredited Ministers from each shall reside at the court of the other.
- This treaty shall be ratified by the King of Nepal within 15 days from this date, and the ratification shall be delivered to Lt. Col. Bradshaw, who engages to obtain and deliver to the king the ratification of the Governor-General within 20 days, or sooner, if practicable.
In fact, this treaty of Suguali was in favour of the East India Company and Nepal had to suffer a heavy loss of her territory. So, a subsequent agreement was made in December 1816 according to which Nepal got all the low lands (Terai) from Mechi, in the east, to Mahakali, in the west. Therefore, the indemnity of two lakhs of rupees ceased to continue. A land survey was also proposed to fix the boundary between the two States.
Validity of the Treaty 
1. Article 9 of the treaty says that the treaty shall be approved by the King of Nepal, but records of the treaty being approved by King Girvan Yuddha Bikram Shah have not been conclusively traced.
2. The British had feared that Nepal might not implement the treaty signed on March 4, 1816 by Chandrashekhar Upadhyaya. Therefore, General David Ochterlony, on behalf of the British Government, ratified the treaty the same day and the counterpart treaty was handed over to Upadhyaya.
3. Some Nepalese nationalists have argued that the treaty was signed between the Nepalese Kingdom and the British and thus "lacks the force to be implemented" between Republic of Nepal and Republic of India. However, the Republic of Nepal has assumed the duties and responsibilities of a successor state with essentially all other treaties signed by the predecessor Kingdom of Nepal, including membership in the United Nations and other comparable relationships. Accordingly, the treaty remains valid since the Republic of Nepal has declared itself to be the legitimate successor state to the prior Kingdom.
Alleged Boundary Conflict 
1. The treaty "failed to mention clearly" in so many sections where the borderline would actually pass through. There have been problems in demarcating the boundary line and in erecting border pillars at several places. Now the area of such disputed places has been estimated at '"around 60,000 hectares". In many of these areas, there are still claims, counter-claims, discussions, controversies and arguments from both sides.
2. The result is that even today there are "accusations of encroachment and disputes at 54 places" of the Nepal-India borderline,as reported by Nepalese nationalists. The prominent areas have been identified as Kalapani- Limpiyadhura, Susta, Mechi area, Tanakpur, Sandakpur, Pashupatinagar, Hile Thori etc.
3. These alleged "conflicts" as India claim in recent context relate entirely to perceived "unfairness", as seen by many Nepalese nationalists, in those areas.Concomitantly, such observers often point out that the border between Chinese-occupied Tibet and Nepal is "free of disputes".
4. The residents of the 'disputed' areas, which lie within India, are Indian citizens and have never supported calls by Nepalese nationalists for a Revanchist "return" of these areas to Nepal. Accordingly, no renegotiation is expected by neutral observers.
See also