Fate of Hyderabad Nizam's fortune hangs in the balance after UK court verdict

Pakistan says British HC’s pre-trial judgment supports its claim over Rs 310 crore; India trashes it

Published: 22nd June 2016 04:21 AM  |   Last Updated: 22nd June 2016 09:01 AM   |  A+A-

NEW DELHI: THE fate of Rs 310 crore belonging to the last Nizam of Hyderabad, Mir Osman Ali Khan, continues to hang in the balance 68 years since it was frozen in the accounts of the Natwest Bank in London as the result of a dispute between India, Pakistan and the Nizam’s heirs.

On Tuesday, a UK court decided to go in for a trial to decide the fate of the money unless the three parties are able to strike an agreement.

However, Pakistan jumped to conclude that this was a victory for its legal team. The Pakistan Foreign Office claimed that the British High Court’s 75-page pre-trial judgment has accepted that there was good evidence in support of Pakistan’s claim to the monies.

Fateof.jpgThe Indian government has dismissed the claim. The Ministry of External Affairs (MEA) said, “Pending trial or settlement of the matter, it is premature to reach any conclusion regarding the ownership of the monies, especially as the present judgement readily acknowledges that there is much force in many of India’s arguments to strike out Pakistan’s claim of ownership.”

The dispute has its genesis in the 1948 transfer of ₤1 million from the Nizam’s account in the Westminster Bank (now known as NatWest Bank) to the account of the then Pakistan’s high commissioner in the UK, Ibrahim Rahimtoohla.

The fund was allegedly transferred by the Nizam’s agent Gen. Nawab Fazal Jung Bahadur without the former’s knowledge. After the princely state of Hyderabad was annexed to India in September 1948 after a police action, the Nizam brought a civil action against his finance minister and Pakistan’s high commissioner for carrying out an illegal transaction.

The transaction took place just after India’s Independence 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.

Proceedings in the case were stayed by the House of Lords in 1957 after Pakistan claimed sovereign immunity. In subsequent years, various attempts to resolve the issue through diplomatic channels failed due to conflicting claims of the three parties: Pakistan, heirs of the Nizam and India.

The bank has also made it clear that it will not release the money unless the British court specifically passes an order directing it to release the funds in favour of one of the claimants.

The judgment handed down Tuesday by Justice Henderson of the Chancery Court determined a series of applications and cross-applications brought by India, Mir Osman Ali Khan’s grandsons Prince Mukkaram Jaha and Prince Muffakham Jah (“the Princes”) and Pakistan concerning beneficial ownership, act of state/non-justiciability and limitation periods applicable to claims made in resulting and constructive trust and restitution.

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