Ash ran into Otoshi on the road to the Indigo Plateau, who challenged him to a badge-or-nothing battle. Confident, Ash agreed. Otoshi's Marowak took down Bulbasaur, but Pikachu managed to win the match—except Otoshi then revealed he had no badges to hand over. He claimed a talking Meowth had stolen them all.
Ash immediately figured out it was Team Rocket. Even though Otoshi had basically tried to scam him, Ash felt bad enough to help track down the stolen badges. Marowak wasn't as forgiving though. The Pokémon ditched Otoshi right then and there, disappointed that its trainer had been careless enough to lose everything in the first place.
When they finally cornered Team Rocket, Jessie offered a deal: beat her in a one-on-one match and the badges were his. Otoshi sent out Doduo, but the two-headed Pokémon spent more time arguing with itself than fighting Arbok. Just as Jessie was about to capture it, Marowak showed back up and helped Otoshi win the fight.
With his badges recovered and his Pokémon back at his side, Otoshi headed off to the Indigo Plateau for the League tournament.
Content compiled by AnimeList.moe from publicly available sources.