India and Pakistan both said on Tuesday their efforts to claim £35 million deposited in a London bank by the Nizam of Hyderabad had been strengthened by a British court’s ruling.
The court’s pre-trial judgement “dismissed Pakistan’s application invoking limitation against India’s claim” to the money, external affairs ministry spokesperson Vikas Swarup said in a statement.
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.
The case relates to 1 million pounds sterling 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.
After the Partition, Hyderabad was one of three states which refused to accede to India. 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.
By the time the delegation arrived in London, India’s armed forces reached Hyderabad and the Nizam had no option but to surrender. 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 that said 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.
Swarup said: “Pending trial or settlement of the matter, it is premature to reach any conclusion regarding 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.”