In the meanwhile, the strategy of Captain Morgan at Balasore met with success in driving away the Marathas. A detachment under his command in seven vessels, namely, Alexander, Anne, George, Fairdie, Lizard, Scourage and a gun boat reached Balaramgarhi after crossing river Budhabalanga. Balaramgarhi was a small Maratha port. Without any resistance, the Marathasallowed the British army to advance towards Balasore town. Although the British vessel sailed up the river with the help of local pilots, but their progress became very slow due to heavy rain.
The rumour of the coming of Maratha troops to oppose the British army, prompted Morgan to proceed with two light canons and three hundred soldiers in small boats. The party, while marching inside the town, got feeble resistance from the Marathas. However, Morgan reached the British factory at night. He tried to bribe Moro Pandit, the Maratha Faujdar of Balasore but the Marathas got its small and imprisoned him.
Captain Morgan’s mobilisation of the British troops, created panic in the hearts of the Marathas who fled away from the town at night on 21 September,1803. In the next morning i.e. 22 September,1803. Captain Morgan occupied Balasore with ease. He stationed the British troops outside the town to face possible Maratha attack. After a week, whe the British posltion in Balasore became stable; Morgan sent reinforcement to Soro under the leadership of Slye to drive out the Marathas. Futher, troops were sent to strengthen his hand.
The Marathas were defeated at Soro and fled towards Bhadrak. Now, the path was clear from Balasore to Cuttack. In the meanwhile, Colonel Ferguson marched from Jajeswar and reached Balasore 4 October, 1803. After that, he went Cuttack to join with Harcourt. Then began the operation on the north-east of the river Suvarnarekha. Captain Lamb, by the order of Colonel Fenwick, occupied Pataspur, Kamarda, Bhograi, Shahbandar, Jamukunda etc. and brought the zamindars under British control by applying both conciliatory and coercive policy. However, on 17 December, 1803, by the treaty of Deogaon, Raghuji Bhonsle ceded Cuttack and Balasore to the East India Company.