It was built by Dayanat-ud-Daulah, a khwajasara (eunuch) of King Wajid AN Shah and incharge of his Pari Khana-the centre of music, dance and drama at Qaiser Bagh that functioned during the days when Wajid Ali was the heir apparent. The khwajasara was earlier named Mohammed Ali Khan but when the title Dayanat-ud-Daulah was conferred upon him he came to be known as Muatamad Ali Khan (Muatamad means trustworthy). He had built the Karbala as his burial place.