1) New Jathedar – In late 1977 Sant Jarnail Singh became the Jathedar of the Damdami Taksal, after the passing away of Sant Kartar Singh. Sant Jarnail Singh would awake the Panth and ignite the fire of revolution in the masses. For too long they had been mistreated by the government.
2) Narakdharis – In early 1978, and for a few years before that, the Sant Nirankaris (Narakdharis) had been gaining popularity and support in Punjab (the Indian government was responsible for funding them). Their religion was allegedly based on Sri Guru Granth Sahib, but they believe in a living Guru who composed his own Avtar Bani and slowly the respect for Sri Guru Granth Sahib decreased, as respect for their living Guru increased.
3) Vasakhi 1978- The Nirankaris held a procession that went through the streets of Amritsar on the day of Vaisakhi. They insulted the Gurus and Guru Granth Sahib.Singhs who were followers of Sant Jarnail Singh from the Damdami Taksal, along with Bhai Fauja Singh, and Gursikhs from the Akhand Kirtani Jatha went to peacefully protest the sacrilege, but were attacked by the Nirankaris who had support from the Police. The Gursikhs were attacked with acid bottles as well as guns. As areuslt, 13 Singhs became Shaheed martyrs, including Bhai Fauja Singh.
4) June 1978 Hukamnama Against the Narakdharis – In June of 1978 the Akal Takht issued a Hukamnama commanding all Sikhs to cut ties with the Nirankari (Narakdhari) group. The Hukamnama condemned Gurbachan Singh the Nirankari Guru for turning away from Shabad Guru (Hymns of Guru Granth Sahib) and instead preaching the worship of a human being. An excerpt from the Hukamnama translated into English: “That the Nirankaris headed by Gurbachan Singh have launched a pernicious offensive against the Sikhs and their Gurus.”
5) Events of August 1978 – Dal Khalsa was formed. A council of five was created to fight the Nirankaris. Bibi Amarjit Kaur the widow of Bhai Fauja Singh of the Akhand Kirtani Jatha was the head of this group. The group that was going to fight the Nirankaris was headed by Bhai Talwinder Singh.
With pressure from Sikhs and Sant Jarnail Singh Bhindranwale the Punjab government closed down all Nirankari Bhawans (similar to Gurdwaras) in Punjab effective August 20th 1978 however they were reopened on August 27th 1978 after just a week. Sant Jarnail Singh decided he would go to Amritsar to fight the reopening of the Nirankari Bhawans, Parkash Badal asked Gurcharan Singh Tohra and Jagdev Singh Talwandi, presidents of Akali Dal and Shiromani Gurdwara Parbandhak Committee (SGPC) to persuade Sant Jee not to proceed to Amritsar hoping to avoid a violent clash, promising that he (Badal) would make sure that the Nirankari Bhawans were not reopened. However the Bhawans were reopened and the two presidents apologized to Sant Jee while accusing Badal of not keeping his word. Badal later declared that he himself would close down the Nirankari Bhawans and would delete any anti-Sikh passages from the Nirankari books, Avtar Bani and Yuh Purush, however no steps were ever taken by him to do so.
References:
The Sikhs of Punjab By J.S. Grewal
The Gallant Defender By A.R. Darshi