It was built by Prince Dhurbhajan, son of Raja Jhujhar Singh, who ruled over Orchha from 1627-35. Dhurbhajan fell in love and married a Muslim girl, and so fierce was his devotion to her that he even converted to Islam.
He gave up his princely ways and spent the latter part of his life in prayer and meditation.
Sunder Mahal is the place he retired to after his marriage, and gave himself wholly to mystic contemplation. He came to be revered as a saint after his death, and much like the Hardol Samadhi, his residence is a place of veneration for the locals.