Situated at an altitude of 1,425 metres on Kalka- Shimla highway, Kandaghat suddenly shot into prominence when late Maharaja Bhupinder Singh, the ruler of Patiala State was expelled from Shimla. Maharaja Bhupinder Singh built his first palace at Kandaghat known as "Chail View Palace", which is presently housing the Government Polytechnic College for Women. At that time businessmen, Laurites, Physicians and other people from almost a ll spheres of life were pulled out from Patiala with attractive incentives and were given all possible facilities to settle down at Kandaghat, Chail and around it.

Later in the pre-independence days Kandaghat was called "Kohistan District," it was the seat of the Deputy Commissioner and was also the "Summer Capital" of the Princely State of Patiala. After independence it was called "Pepsu". According to the "Reader's Digest World Atlas" the name of Kandaghat "A Micro Dot in History" is imprinted in bold letters.