As the name suggests, Salar Gunj Gate was built in the memory of Salar Jung, the prime minister of the Nizam of Hyderabad. Since the Nizam of Hyderabad was a stooge of the British government in India, his prime minister, Salar Jung, naturally followed in his footsteps.

When the First War of Indian Independence broke out he openly sided with the British government. He came to know of the plan of Indian freedom fighters to attack the residency in Hyderabad and informed his masters well in time so that they were prepared to defeat them. He was knighted as Sir and was also given the title of Salar Jung. While he was formally addressed as Sir Salar Jung, the common people referred to him by the name of Nawab Sahib.

Salar Gunj Gate was built in his memory by one his admirers and friends, Faiz Nawab Sadak. It is located across the main arterial road in the middle of the city of Panipat.