Yahiya Khan, the eldest son of Nawab Zakariya Khan, to the displeasure of the Muslim Emperor Muhammad Shah, took over as governor of Lahore in 1745 after the death of his father as if it was his right.
He continued his father's policy of repression against the Sikhs. During his regime, a fracas between a band of Sikh horsemen and the State constabulary resulted in the death of Jaspat Rai, Faujdar of Eminabad and younger brother of Diwan Lakhpat Rai, who was revenue minister to the governor. The minister, bent upon vengeance, took heavy reprisals, rounding up Sikhs living in Lahore and having them executed at the nakhas, the local horse market, later renamed by Sikhs Shahidgahi (martyrs shrine). Lakhpat Rai and Yahiya Khan proceeded in pursuit of Sikhs who were concentrated on the bank of the Ravi, north of Lahore.
The Sikhs retreated further northwards but hill soldiers coming from the North barred their way. Yahiya Khan's troops caught up with the Sikhs at Kahnuvan in Gurdaspur district on 1 May 1746 and inflicted upon them a heavy defeat, with more than 7,000 of them killed in battle and 3,000 taken to Lahore as captives to be executed there. This disaster has become known in history as the Chhota Ghallughara (Minor Massacre) only because a much larger massacre of Sikhs called the Wadda Ghalughara, the Great Massacre, befell the Sikhs on 5 February 1762.
In 1746 Qamruddin Khan, the father-in-law of Yahiyah Khan took control of Lahore, but Shah Nawaz Khan, the younger brother of Yahiya Khan who had taken over as governor of Multan, helped in putting his brother back in charge.
Later he revolted against the authority of Yahiya Khan and hostilities between the two brothers continued through the winter months of 1746-47. In March 1747 Shah Nawaz forced his way into Lahore, put Yahiya Khan in jail, and proclaimed himself governor of the Punjab.