Bal Gandharva revived his drama company in 1937. With Narayanrao increasingly ill at ease in female roles owing to his advancing years, the company looked for an actress to play female roles and found Gohar Karnataki in April 1938. Bal Gandharva soon formed an intimate relationship with Gohar Karnataki, also known as Gauhar Bai, that scandalized traditional Maharashtrian society at that time. His brother Bapurao Rajhans left the company to protest against Gohar's entry in Gandharva Sangeet Mandali and Bal Gandharva's life, when it became clear that Gohar would have a major say in the company's stewardship.