Guru Amar Dass ji wanted to colonize a new City In June 1570 A.D. he took Sri Guru Ram Dass with him and reached the place where he wanted to build a new city It was that place where Guru Nanak Dev Ji and Bhai Mardana had rested for some time when they were going on a long journey starting from Sultanpur Lodhi. When Guru Nanak Dev Ji was resting at that beautiful place he had said, “One day a beautiful city and a pool of nectar will be constructed at this place?”

When Guru Amar Dass Ji and (Guru) Ram Dass Ji reached at this place, Guru Amar Dass ji sent for the headmen of the villages of Gumtala, Tung, Gilwaali and Sultanwind. The Guru told them that he wanted to colonize a new city at that place The people of those villages agreed to the proposal of the Guru Ji and showed their willingness to contribute their lands for the construction of the city But the Guru told them frankly that he would compensate them according to the current value of the land. So he paid the price of the land and got the deed transferred to his name.

But there are other versions about acquirement of the land. One such other story is that King Akbar had offered this land to Guru Amar Dass Ji. But it does not seem true, as it had been a tradition that The Guru us always constructed cities on bought lands.

Foundation stone of the town was laid by Guru Amar Dass Ji himself and town was named as Guru ka Chakk.

Guru Amar Das ji had already constructed Goindwal under his  supervision, so he had become an experienced town planner. He gave (Guru) Ram Dass Ii, detailed instructions about the planning of the new city. (Guru) Ram Dass started construction work with great zeal and enthusiasm. The Sikhs of the nearby villages also came for help. The Guru ji first constructed the residential houses. These residential houses came to be known as Guru ke Mehal. Near the residential houses a bazar was formulated so that the devotees and labourers could buy the necessary articles. This bazar came to be known as Guru Bazar. Now this bazar is famous for the sale and purchase of gold ornaments.

When Guru Amar Dass Ii installed (Guru) Ram Dass as the fourth Guru then he advised him to shift his residence to Guru ka Chakk and carry on the construction work. He also asked the new Guru to make the city as the centre of preaching. After completion of the Guru Bazar, digging of the Santokhsar Sarovar started.

Guru Ram Dass Ji started a langar (free kitchen) for the devotees and workers. The Guru sent messages far and wide that a new city was under colonization. He also informed them that free land would he allotted for the construction of the houses and shops. When the traders and craftsmen heard about it, they reached the city in large number.

The construction work was in progress according to the planning of the Guru. Different bazars were constructed for the people of different professions and vocations. The people of different trades started settling at the places allotted to them. When Guru Ram Dass Ii constructed a Darbar Hall and started preaching the devotees then the name of the city was changed to Chakk Ram Dass Ii. The Guru bought another five hundred bighaas of land from nearby village Tung for the further expansion of the town.

When Guru Ram Dass Ji was busy in the supervision of the construction of the city then a strange incident happened. The holy place to which Guru Nanak Dev Ii and Guru Amar Dass Ii had pointed out was also discovered by chance.

Historians write that Duni Chand Khatri was a rich landlord of Patti town. He was very haughty, conceited and arrogant. He had five daughters. All were very charming and talented.

One day Duni Chand asked his daughters, who provides for you to eat.” Elder four daughters said, “Father! It is you” But the younger daughter whose name was Rajni did not reply His father again asked her. “Tell me, who provides for you the clothes and other essential articles?” Bibi Rajni again kept quite. She had lived with her maternal grandfather and grandmother at Lahore. They were great devotees of Guru Amar Dass Ii. So they believed that one God sustains all the human beings. Bibi Rajni after a pause said, “It is the God that sustains all living beings” Hearing this reply Duni Chand was enraged He said, “I shall see how the God sustains you.” In due course her other daughters were married to rich land lords. But he was so annoyed with Rajni that in fit of temper he married her to a leper. Rajni happily accepted her fate and served the leper with great love. Her father could not bear it. He turned her out of the house.

At that time Guru Ram Dass Ii was colonizing the new city. As she was a devout Sikh, she had heard about it. When she was ordered to get out of the house, she took her husband with him and reached Guru ka Chakk. There the devotees provided her one small room and they stayed: here. She got the duty of cooking the food in the langar of the Guru. She herself was taking the meals in the langar and was also bringing food for her husband. So she was contented with her fate. She was always reciting the Name of God and had great belief in Him. Sometimes she took her husband with her and arranging for his peaceful sitting under a shady tree, used to join her duty in the langar

One day she left her husband by the bank of a small pond in the shade of a Ber tree and she went to langar.

When the leper was sitting on the bank of the pond, he saw a pair of crows dipping down in to the pool and after coming out flying away with their colour changing from black to white. He considered that the pool did not contain ordinary water. So he struggled and by crawling reached near the water of the pond. Then he dipped into the water. But when he came out he was astonished to see him He was no longer the leper, he had been. He walked as a young man and again sat under the shade of the tree He waited Rajni very patiently. When Rajni returned from the langar house; she was distressed to see a new man sitting there. He told her the complete story of his transformation. But she did not believe it. She cried and wailed and hearing her voice some devotees came to help her. The young man tried to convince them.

At last they met Guru Ram Dass Ji, who was supervising the construction work inside the city When the Guru ji asked the young man to tell the truth, he narrated the whole story, which had happened with him. The Guru was convinced to hear the story of the young man, as he perceived that pond must be the some sacred place about which Guru Amar Dass Ji had told. Then the Guru assured Rajni that young man “vas her real husband. Then the Guru told Baba Budha Ji that pond was the same holy place about which Guru Amar Dass Ji had foretold. He told him that at that places a pool of Nectar must be constructed.