The three stakeholders (India, Pakistan and heirs of the Nizam of Hyderabad) have been fighting over the amount of one million pound, which is now being estimated to be something between 50 to 80 million pounds, at present.
EVEN THOUGH the Kashmir issue awaits resolution but another dispute, which has perplexed both India
and Pakistan since 1947 seems to have reached a resolution.
With Indian government today giving approval to an out of court settlement with Pakistan and heirs of Nizam of Hyderabad, curtains are set to fall over the ‘Hyderabad Funds case’ involving millions of pounds lying in a freezed account of the NatWest Bank in England.
The matter will be settled during protracted negotiations over next 18 months and possibly end the standoff between the two countries and the heirs of Nizam.
‘Hyderabad Funds case’ goes back to the partition days, when India and Pakistan were facing immense problems over the issue of division of resources and territory.
On September 20, 1948, an amount of over one million pound sterling, which was maintained in the name of Nizam of Hyderabad’s government in National Westminister Bank, London, was transferred into the account of Habib Ibrahim Rahimtoola, the then High Commissioner of Pakistan in London.
The transfer of funds was, however, not sanctioned by law, as the finance minister of Hyderabad, who made the transaction, did not have the power to withdraw the money without the express instruction of the Nizam.
When the Nizam subsequently instructed the retransfer of money, the same were not complied with and then the Nizam had to ask the NatWest Bank to freeze the account.
Since then, the three stakeholders have been fighting over the amount of one million pound, which is now being estimated to be something between 50 to 80 million pounds at present.
Historians opine that roots of the issue lie in the fact that Nizam of Hyderabad, Osman Ali Khan was curious character, who was caught in a tricky political situation at the time of partition.
The Nizam wanted to join the newly created state of Pakistan but his predominantly Hindu subjects were totally averse to the idea of joining Pakistan, then a newly created Muslim nation.
When the Nizam could not take final decision, his finance minister Moin Nawaz Jung, decided to force the matter and signed over the money to the Pakistan’s High Commissioner in London.
This, however, shocked the Nizam and brought pressure from the government of India, after which Osman Ali asked the NatWest Bank to freeze the account.
The matter went into a protracted litigation with Khan fighting with Pakistan government in English courts to get the money back, but it proved to be of no avail. In 1957, the famed English Judge Lord Denning pronounced that the account could be de-freezed only after three parties concurred.