The movie establishes that Bhiku, Narayana, and all of the other gangsters around whom the story revolves are doomed to die from the beginning. Satya's story is compelling because he alone has the chance to live - his love interest Vidya represents his chance at redemption and escape.
In Bhiku's case, he makes the decision to kill his rival knowing full well that his rival will kill him instead of he does nothing. Jhawle now knows that he has lost his control over Bhiku, and the entire gang by association, and therefore Bhiku is now an obstacle instead of an asset. So he eliminates him after winning the elections and securing his own power.
Yaad teri aayegi, mujhko bada satayegi...
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