Other than a few occasional visits to Upasni, Gustadji stayed near Sai Baba in Shirdi for six months and fasted under his direction. Gustadji was close to Sai Baba and was present the day that Sai Baba died — 15 October 1918 — and witnessed Sai Baba's funeral.
After Sai Baba was buried, Gustadji moved from Shirdi to live with Upasni Maharaj near Sakori. He had become gaunt and haggard under Sai Baba's orders to fast, and had suffered severe hardships under Upasni also. Once Gustadji did something unknowingly wrong, and Upasni lost his temper and beat him with a bamboo cane so severely that the cane itself broke into pieces. Gustadji intuitively knew that he was serving penance for his past karma and remained under Upasni's guidance, staying with him until Upasni sent him to Poona to be with Merwan Seth, who in turn sent him to Babajan every evening.
Yet one day something curious took place. Merwan Seth ordered Gustadji to sit with him in the temple room by the toddyshop. He ordered Gustadji not to leave the room, even to ease himself. After four hours, Gustadji's bladder was so painful that when Merwan Seth was gone, he slipped out onto the street to relieve himself.
But as Gustadji sat in a corner to piddle, he looked round and saw Babajan running towards him. This was extraordinary, because Babajan rarely left her seat in the cantonment to venture into the city. Babajan grasped Gustadji's arm and said, "Come on, fellow, with me." She looked pleased, and Gustadji summoned a tonga to escort her back to her seat.
Just as the tonga was nearing Babajan's neem tree, Ahmed Abbas came alongside on a bicycle, panting furiously. He pulled Gustadji out of the tonga onto the road. Ahmed Abbas told Gustadji that Merwan Seth had ordered him to go as fast as his bike would carry him to Babajan's tree and prevent Gustadji from reaching there. Merwan Seth had explained that if Gustadji reached there with Babajan, Gustadji's connection with Merwan Seth would be severed.
Ahmed Abbas had arrived just in time; another minute and it would have been too late. Gustadji then understood the importance of carefully obeying Merwan Seth's instructions.
Gustadji thus became one of the first among Merwan Seth's circle of disciples. His younger brother Ardeshir N. Hansotia (nicknamed Slamson ) had also had contact with Sai Baba and Upasni Maharaj and also now became one of Merwan Seth's close associates.