Focus back on Nizam fund after British court judgement

Hyderabad: With India and Pakistan both claiming victory following a British court`s judgement in the Hyderabad Funds Case, the focus is back again on a nearly seven decades old dispute over around Rs 350 crore of Hyderabad`s last Nizam, Mir Osman Ali Khan.

As British Judge J Henderson on Tuesday ruled in favour of a full trial in the case, only a long-drawn litigation is likely to decide the case involving the two neighbouring countries and descendants of the Nizam.

The case relates to 10,07,940 pounds and 9 shillings that Hyderabad`s Finance Minister Moin Nawaz Jung had transferred to Pakistan`s envoy in England, Habib Ibrahim Rahmatoola`s, account in the National Westminster Bank after India`s Partition and amid tension over the Nizam`s refusal to accede to India.

The money adjusted for interest and inflation is now estimated to be Rs 350 crore.

Both India and Pakistan interpreted Tuesday`s judgement differently.

Islamabad claimed that the British High Court rejected the Indian attempt to strike out Pakistan`s claim to the Hyderabad Fund.

"India failed to persuade the court that Pakistan`s position was untenable and that it could show no legal entitlement to the 35 million GBP sitting in a bank account in the name of the High Commissioner of Pakistan, since 20th September 1948... The judge accepted that there was good evidence in support of Pakistan`s claim to the monies, which needed to be fully considered at a trial," said the statement from Pakistan Foreign Office.

"The 75-page judgement of Henderson J. is a clear vindication of Pakistan`s principled stance, and the effective legal strategy being pursued by the new legal team," it added.

India claimed that the court ruled against Pakistan`s appeal for a summary disposal of the claim in Islamabad`s favour.

"An English court has dismissed Pakistan`s application invoking limitation against India`s claim to the monies. The judgement states that Pakistan`s application for summary disposal of the claim in her favour must fail. The costs for the failure of this application of Pakistan will be awarded to India," the Ministry of External Affairs said.

"Pending trial or settlement of the matter, it is premature to reach any conclusion regarding ownership of the monies, especially as the present judgment readily acknowledges that there is much force in many of India`s arguments to strike out Pakistan`s claim of ownership."

Last year, the same court had ruled against `sovereign immunity` sought by Pakistan in the case and asked it to pay 1,50,000 pounds as legal fees to India.

Following transfer of money, India had raised an objection that the Nizam was not an independent ruler and prevailed upon the bank to freeze the account.

The Nizam had also written to the bank that the money was transferred without his knowledge. He sought the money back.

Osman Ali Khan, who was the world`s richest man of his time, died in 1967. The efforts to solve the dispute during his lifetime failed as Pakistan never came forward to help unlock the funds.

The Indian government in 2008 decided to pursue an out-of-court settlement with Pakistan and the heirs of the Nizam.

The court case was revived in 2013 after Pakistan did not reciprocate to India`s offer of an out-of-court settlement.

The Nizam`s descendants impleaded in the case after the bank informed them about the case`s revival. "We are a party to the case," said Nawab Najaf Ali Khan, grandson of the 7th Nizam.

The Nizam`s two other grandsons, Prince Mukarram Jah and Prince Muffakam Jah, are also claiming the amount.

The Nizam had refused to accede to India after the country`s Independence on August 15, 1947. He wanted to remain an independent state or join Pakistan. The princely state finally merged with the Indian Union in September 1948 after an operation by the Indian `police action`.