21 years old refugee from the Punjab, Madanlal served the Royal Navy as a wireless operator, he was honourably discharged in 1946. Madanlal reached Bombay as a refugee in 1947 and lived in the Chembur Refugee Camp. Madanlal met Dr. J. C. Jain who taught Hindi at Ruia College in Bombay, and was influenced by him. For some time Madanlal, who was a bitter youth and considered Dr. Jain as a surrogate father, earned a commission by selling Dr. Jain's books.
During this period Madanlal found work in a licensed firecracker factory Messrs Vassen Puspasen. The factory also thrived on the illegal manufacture and sale of hand grenades. Madanlal manufactured and sold these grenades, it was in this activity that he came in touch with Dixit Maharaj brother of Dada Maharaj who was the head of a sect of affluent Hindus known as Pushtimarg Vaishanavas, he lived in a house in the precincts of the famous Bhuleshwar temple. An affluent person Dada Maharaj funded the purchase of weapons by militant Hindu organisations, and was taken up by Narayan Apte and his schemes. Madanlal met with an accident while working at the factory and lost the top portion of the index finger of his left hand, and had to stop work. The finger got caught in the gears of a turntable. His assistant stopped the machinery, but the finger was wedged between the teeth of two rotary wheels, and was bleeding profusely. ' There were half-made bombs lying all over the place. To send for a doctor would have been suicidal. So I picked up a knife and chopped the finger off.' (This was told by Madanlal to Manohar Malgaonkar while he was researching for his book 'The Men Who Killed Gandhi').
Madanlal came in contact with Karkare through Dada Maharaj and his brother Dixit Maharaj. Madanlal went to Ahmednagar carrying a trunk full of bombs and slabs of explosives and wires. In Ahmednagar, Madanlal occupied a fruit stall by forcibly driving away its Muslim owner, his business was sponsored by Karkare whom he referred to as Karkare Seth. Karkare took Madanlal to Pune and introduced him to Apte and Godse. Madanlal became an accomplice in the gang and earned notoriety for himself by regularly fomenting trouble in Ahmednagar.
On 1st of January 1948, the police were ordered to keep Karkare and Madanlal under constant surveillance, for possessing explosives, arms and ammunition without a licence. Madanlal was also on the police records. On January 5, Madanlal heckled a Congress leader Raosaheb Patwardhan, who had come to town to preach communal harmony. Madanlal by his own admission said that he continuously heckled him and at one point rushed up the podium and snatched the microphone from Patwardhan. He was arrested on the spot and was kept in detention overnight.
On 9th January, Inspector Razak of Ahmednagar police recommended to his superiors that both Madanlal and Karkare should be kept in detention. It took three days for the recommendation to be processed and the final order issued. By then both Karkare and Madanlal had fled - in fact, they had run away on the very day Razak had recommended their arrest. A friend in the police had tipped them off.
Madanlal reached Delhi with the rest of the gang and on 20th January 1948 exploded the guncotton bomb at the prayer meeting where he was abandoned by the gang and got arrested. A hand grenade was recovered from him.
Madanlal was sentenced to life imprisonment, after serving the sentence Madanlal Pahwa lived in Dadar in central Bombay.