[3] The British East India Company's introduction to the Chennai Presidency of the 1803 Permanent Settlement, which had first been enacted in Bengal Presidency ten years previously, replaced the agrarian socio-economic status quo with a more egalitarian arrangement where anyone could cultivate provided that they paid a fixed sum to the East India Company for the privilege of doing so.

The population came to the view that the East India Company were economically exploiting them and that those who were dependent on the traditional system no longer had a means of making a living.

As the old order collapsed into disarray, the once-authoritative Palegars, including Narasimha Reddy, became the focus of attention from sufferers, whose pleas fell on deaf ears.

At the same time, some of his relatives were facing proposals for further reductions in their land rights, including by a reform of the village policing system.

[citation needed] Things came to a head in 1846 when the Company authorities assumed land rights previously held by various people who had died in the villages of Goodladurty, Koilakuntla and Nossum.

[3] An armed group, initially comprising those dispossessed of inam lands around Koilakuntla, was led by Reddy's Right-hand man Vadde Obanna in July 1846.

The Acting Collector for the area Lord Cochrane, believed that Reddy had material support from fellow pensioners in Bhagyanagar and Kurnool, whose land rights had also been appropriated.

The group soon attracted support from the peasantry and was reported by Company authorities to have rampaged in Koilkuntla, taking back the looted treasury there and evading the police before killing several officers at Mittapally.

The British offered incentives for information regarding the whereabouts of the rebels, who were again surrounded amidst reports that unrest was now growing in other villages of the area.

As a grandson of Jayaram Reddy, the last powerful Zamindar of Nossam, he was sorely disappointed when the Government refused to pay him any portion of the lapsed pension of that family.