A new village called Gobindpur was established near the village of Ruhela, on the bank of the Beas river by Sri Guru Arjan Sahib Ji in 1587. Guru Arjan named this new village in honour of his young son Hargobind.

However, after the arrest, torture and martyrdom of Guru Arjan, the area fell under the control of Diwan Chandu Lal (an influential hindu banker and chief minister of emperor Jahangir. Jahangir took control of the whole area, but it was neglected and soon fell into ruin.

During the rainy season, Guru Hargobind Ji left Kartarpur and camped at the village, Gobindpur. Guru Hargobind decided to rebuild and enlarge the town on the open space at the bank of the river Beas. The village still had the ruins and bricks from the village begun by his father.

Pleased at the attractive view the site commanded, Guru Hargobind named the village Sri Gobindpur. But because of his own association with it, the place came to be known as Sri Hargobindpur, a name still commonly used.

Guru Hargobind and the creation of a town over Ruhela, revenge by muslims over death of Bhagwan Das.