Descendants of the seventh Nizam, ruler of one of the largest and richest Indian princely states, have said that the £35 million lying in a London bank for almost seven decades belongs to them and India and Pakistan have no claim over it.
Known as the Hyderabad fund case, the dispute over the money is one of the longest pending legal battles in the British high court. It relates to £1 million deposited in the Pakistan account of the National Westminster Bank, now called the Royal Bank of Scotland, by a delegation of officials of Hyderabad three days after the state acceded to the Indian union on September 17, 1948.
The amount is now worth £35 mn.
“The transaction took place on September 16, 1948, when the Nizam was still the ruler of Hyderabad state. He had merged the state with the Indian Union two days later. It indicates that the money deposited in the London bank was Nizam’s personal money and hence, it belongs to his descendants as per the principles of natural justice,” Nawab Najaf Ali Khan, grandson of Mir Osman Ali Khan, told Hindustan Times.
Hyderabad was one of three princely states which refused to accede to India after Independence in 1947. While seeking Pakistan’s help in declaring independence, Nizam Mir Osman Ali Khan sent a delegation of officials led by finance minister Moin Nawaz Jung to the US to move a petition in the UN.
India’s armed forces reached Hyderabad and the Nizam had no option but to surrender by the time the delegation arrived in London. As Hyderabad acceded to the Indian union, Jung approached Pakistan high commissioner Habib Ibrahim Rahimtoola and asked him to help deposit the Nizam’s money in a bank.
A week after the money was deposited, the Nizam filed a suit in a London court saying the money was transferred to Pakistan’s account without his knowledge. India too raised an objection, saying the money belonged to the Indian government as Hyderabad had acceded to the union. The bank then froze the account.
After the Nizam’s death in 1967, his family unsuccessfully attempted to get back the money through an out-of-court settlement.
Khan disputes India’s claims.
“As per the Supreme Court judgement in the Nizam jewellery case of 1995, Nizam being a monarch, there was no differentiation between the state and his personal properties. As such, the jewellery belonged to the Nizam’s descendants, the judgement said,” he said.
Khan argued that going by the SC judgement the money deposited by Jung in Rahimtoola’s account was also the Nizam’s personal money and hence, it does not belong to the Indian government.
He pointed out that the House of Lords in London in its judgement in 1957 suggested an out-of-court settlement between Pakistan, the Nizam and the London bank.
“India was nowhere in the picture and was not a party to the settlement issue. The House of Lords also warned Pakistan against moving the court stating that if it did, it would lose its sovereign immunity. But in 2013, Pakistan moved the London court and India was also forced to join the legal battle subsequently. And as descendants of the Nizam, we have also impleaded in the case recently,” Ali said.
There are 120 direct descendants of the seventh Nizam.
“He had 16 son and 18 daughters. At present, only one son and two daughters are alive. They are all legal heirs of the Hyderabad funds. Since there is no legal will or trust deed, the money has to be distributed among the legal descendants as per the Sharia (Islamic law),” Ali, who is also the president of the Nizam Family Welfare Association, said.
He said he met top politicians and heads of India and Pakistan in the last few years and sought to ensure an amicable solution to the issue.
“I am thankful to President Pranab Mukherjee, who had taken up the issue with the Pakistan government for an out of court settlement. Unfortunately, the issue had gone to the court,” he said.
India, Pakistan claim ‘victory’
India and Pakistan both claimed on Tuesday that their efforts to claim the fund had been strengthened by a British court’s ruling.
External affairs ministry spokesperson Vikas Swarup said in a statement that the court’s pre-trial judgement “dismissed Pakistan’s application invoking limitation against India’s claim” to the money. The judgement stated Pakistan’s application for summary disposal of the claim in its favour “must fail” and the costs for failure will be awarded to India, he added.
Swarup was reacting to his Pakistani counterpart’s remarks that the court’s judgement was a “clear vindication of Pakistan’s principled stance”.
Pakistan claimed India had “failed to persuade the court” that it could show no legal claim to the money deposited in the bank in September 1948. The judge accepted there was “good evidence in support of Pakistan’s claim” which needs to be fully considered at a trial, the Pakistani spokesperson said.