In consequence of ill-health, however, at the end of 1836, he was compelled to resign this appointment; but on his return to duty in February 1839, he was nominated to the combined offices of Commissioner for the Suppression of Thuggee and Dacoity.
In 1842 he was employed on a special mission in Bundelcund, to inquire into the causes of the recent disturbances there, and he remained in that district, with additional duties, as Resident at Gwalior, from 1844 until 1849, when he was removed to the highly important office of Resident at the Court of Lucknow.

Colonel Sleeman held his office at Gwalior in very critical times, which resulted in hostilities and the battle of Maharajpore.

But for a noble and unselfish act he would have received this promotion at an earlier period.

The circumstance was this: Colonel Low, the Resident at that time, hearing that his father was dangerously ill, tendered his resignation to Lord Auckland, who immediately offered the appointment to Colonel Sleeman.

No sooner had this occurred, however, than Colonel Low wrote to his Lordship that, since he had resigned, the house of Gaunter and Co., of Calcutta, in which his brother was a partner, had failed, and, in consequence, every farthing he had saved had been swept away.