In 1764 again the British troops surrounded the Madurai Fort, this time cutting supplies to the fort. Hence Yusuf Khan and his troops went without food and water for several days inside the fort (surviving on Horse and Monkey meat according to European sources) but held on with great energy and skill, renovating and strengthening the fort at great expense, and repelling the chief assault with a loss of 120 Europeans (including nine officers) killed and wounded. At the end of that time little real progress against him had been made, except that the place was now rigorously blockaded.
Meanwhile the Arcot Nawab consulted Sivaganga General Thaandavaraaya Pillai, along with Major Charles Campbell, hatching a treacherous plot to bribe Yusuf khan’s Dewan Srinivasa Rao, Marchand the captain of the French mercenaries and Khan’s doctor Baba Sahib. One morning, when Yusuf Khan was offering his prayers inside the fort, Marchand, Srinivasa Rao and Baba sahib went in quietly and pinned Yusuf Khan to the ground and tied him up using his own turban. Hearing this commotion, one youth called Mudali, close to Yusuf Khan, raised an alarm. He was quickly caught and cut down. As the news of the coup reached Yusuf Khan's wife, she rushed to the scene with a small posse of troops. But they were helpless against the well armed French and other European mercenaries, standing guard around the fallen ruler. Under cover of darkness and an even darker veil of secrecy, Marchand whisked away Yusuf Khan out of the fort and handed him over to Major Charles Campbell, who commanded the English among the besiegers. Unfortunately, the major part of Yusuf Khan's native forces remained totally unaware of the fateful drama that had been enacted inside his house, that morning.
The next day, in the evening of 15 October 1764, near the army camp at Sammattipuram, on the Madurai- Dindigul road, Yusuf Khan was ignominiously hanged as a rebel by Muhammed Ali Khan Wallajah, the Nawab of Arcot. This place is about two miles to the west of Madura, known as Dabedar Chandai (Shandy), and his body was buried at the spot.
What motives forced the three main conspirators, who were Yusuf Khan's close confidantes, to betray him? It is said that Yusuf Khan had once flogged Marchand with a whip (the first time a European officer had been whipped by a native ruler) and so he was waiting for an opportune time to take revenge. It is also possible that extreme misery of the people and soldiers inside the fort (because of the prolonged siege) might have forced the Dewan Srinivasa Rao and Baba Sahib, the physician of Yusuf Khan to decide that handing Yusuf Khan over to the English, would make them lift the siege and relieve the people of their intense agony and suffering. They might have imagined that Yusuf Khan would be sentenced to brief imprisonment and/or fine as punishment and let off later on.