After three months of squabbling, a coalition ministry was formed in September 1845, again headed by Fateh Jang Chautaria. The real power behind the throne was the favorite of Queen Lakshmidevi, Gagan Singh, who controlled seven regiments in the army compared to the three under the prime minister. Abhiman Singh and Jang Bahadur also served as commanders, each with three regiments. Plots and counterplots continued until Gagan Singh was found murdered during the night of September 14, 1846. The queen was beside herself at the death of her favorite, whom she had hoped to use to elevate her own son to the monarchy. She commanded Abhiman Singh to assemble the entire military and administrative establishment of Kathmandu immediately at the courtyard of the palace armory (kot).

Emotions ran high among the assembled bands of notables and their followers, who listened to the queen give an emotional harangue blaming the Pandes and demanding that the prime minister execute the Pande leader whom she suspected of the murder. While Abhiman Singh hesitated, fighting broke out in the crowd, and he was wounded. During the free-for-all that followed, swords and knives were used on all sides to dispatch opponents. Through some scheme that has never been explained adequately, the only leader with organized bodies of troops in the kot area was Jang Bahadur, whose troops suppressed the fighting, killing many of his opponents in the process. When the struggle subsided, the courtyard was strewn with the bodies of dozens of leading nobles and an unknown number of their followers--the cream of the Nepalese aristocracy. The Pande and Thapa families in particular were devastated during this slaughter.

Why the Kot Massacre took place has never been established, although the queen herself was obviously at fault for calling the assembly and whipping it into a frenzy. It has always seemed suspicious that the king was notably absent when the fighting began and that Jang Bahadur was the only leader who was ready for trouble. The extent of the carnage was apparently unexpected. Jang Bahadur was the only true beneficiary of the massacre and became the only military leader in a position of strength in the capital. The next day, he became prime minister and immediately launched a purge that killed many of his aristocratic competitors and drove 6,000 people into exile in India.