Lord Dalhousie promises Ali Bahadur the throne of Jhansi within 10 days by crippling Jhansi with economic pressure. Gangadhar approaches the merchants to loan him money on interest to set up a large army. Ali Bahadur bribes the greedy merchants, and they defect. The merchants decline Gangadhar's proposal. Ali Bahadur presents himself in the court of Jhansi as their ally. Ellis reads a message from Lord Dalhousie stating the East India Company's decision to make Ali Bahadur the King of Jhansi.