In this paper, simultaneous state and disturbance estimation of a drive system composed of motor connected to a load is proposed. Such a system is represented by a two mass model realising in a fourth-order plant. Backlash is introduced as the nonlinear disturbance in gears which is proposed to be estimated and in turn compensated. For this motion control system, a two-stage higher order sliding-mode observer is proposed for state and backlash estimation. The novelty lies in the fact that for this fourth-order system, output is considered from the motor end only, i.e. its angular displacement. The unmeasured states consisting of output derivative, load-side angular displacement and its derivative along with backlash are estimated in finite time. This disturbance due to backlash is unmatched in nature. The estimated states and disturbance are used to devise a robust sliding-mode control. This proposed scheme is validated in simulation and experimentation.