HYDERABAD: In the next few days, a British court will give its ruling on a 67-year-old case concerning the fate of money kept by Hyderabad’s last Nizam, Mir Osman Ali Khan, which has now grown to `310 crore. The stash, locked up in NatWest Bank, is being claimed by the Nizam’s heirs, and the governments of India and Pakistan.
The last named entity claims the money because the Nizam’s then agent general Nawab Fazal Jung Bahadur, had transferred it to Habib Ibrahim Rahimtoola, the high commissioner of the newly formed nation of Pakistan, in 1948.
As noted historian of Hyderabad Mohd Safiullah tells us, “It was a time of political uncertainty when the future of the then princely kingdom of Hyderabad was in the balance.”
The transaction took place just after India became an independent state on August 15, 1947. The rulers of Hyderabad, one of the 552 princely states, were then weighing the option of acceding to either Pakistan or India or remaining independent.
Historians discount the possibility that the money transaction was an indication that the last ruler of Hyderabad was seriously considering accession to Pakitan. Writer and historian Narendra Luther says, “I’m certain that Mir Osman Ali Khan wasn’t looking to be part of Pakistan. He wanted to be independent.”
Hyderabad was then a landlocked city in the midst of India. The independent government of Jawaharlal Nehru wanted it to be a part of India. “Negotiations went on for months and then came the Standstill Agreement. It was also at the same time that the Razakar Movement started in Hyderabad dominion,” says Luther.
The Razakars were a militia raised to force the Nizam’s hand on the accession question. It was headed by Kasim Razvi, who as Luther describes in his book ‘The Story of Kasim Razvi’, triggered a chain of events that led to Police Action in Hyderabad and the absorption of the pricely state into the Indian Union.
“The Nizam dreamt of an independent state, but the population was 85 per cent Hindu and 15 per cent Muslim,” adds Luther.
Historians say the Nizam never had any serious intention of acceding to Pakistan, but he did help the nation with close to `20 crore. “They were having a hard time immediately after they became independent. It was a non-refundable, non-returnable, one-time transaction. The money was transferred as a gift,” says Safiullah.
Of the money still in the NatWest bank, Saifullah says that the transaction came to public attention in the late 1950s and early 60s.
“In fact, immediately upon knowing of the transfer of funds to the Pakistan high commissioner, the Nizam sent a telegram that the amount was transferred without his knowledge,” says Saifullah.
There is speculation that the money was meant to buy 100,000 Lee-Enfield rifles in a bid to fight the Indian Army. But historians of Hyderabad say there is no official document proving it.
Saifullah says the Nizam did hold out against joining the Indian Union but after police action dethroned him and his state was taken over and he became resigned to the idea.
“In fact, 17 years after he ceased to be the ruler of Hyderabad in September 1948, the Nizam donated close to 5,000 kg of gold to the Indian Army to help fight the Indo-Pakistan War. He was also known to have made handsome contributions to the Golden Temple in Amritsar and BHU. In 1938, he gave `10 lakh to AU,” informs Safiullah.
Going back to the enormous amount that is in the NatWest Bank, Luther says, “The question is whether the money belonged to the Nizam or the Hyderabad State. If it belonged to the State, then it has to go back there.”