India will go in for an out-of-court settlement with Pakistan and the heirs of the Nizam of Hyderabad to settle a dispute spanning six decades and involving millions of pounds lying frozen in a London bank. According to estimates, the settlement is likely to release around £30 million, which may be the current valuation of the amount, 1,007,940 pounds sterling and nine shillings to be precise, blocked in the Nizam’s account in the National Westminster Bank, London, since 1948.
Having devised a strategy to conduct the negotiations over the next 18 months, the Union Cabinet, headed by Prime Minister Manmohan Singh, gave its approval on Friday to pursue an out-of-court settlement. The decision has been pending in the long list of items on the India-Pakistan agenda. “The Union Cabinet gave its approval to pursue an out-of-court settlement with Pakistan and the heirs of the Nizam on the matter of funds lying with the National Westminster Bank,” science and technology minister Kapil Sibal told reporters after the Cabinet meeting.
“We have decided to restart the negotiation process with Pakistan to know how much the private beneficiary should get,” Mr Sibal added. The matter has festered since 1948 because of a dispute between India and Pakistan. Soon after Independence, the then Nizam, Mir Osman Ali Khan, transferred £1 million to the London-based bank to be transferred to the Pakistan government. However, India objected and said the Nizam had no right to send money to London as he was not an independent ruler, and prevailed upon the bank authorities to freeze the account. Since then both India and Pakistan have been caught in a legal battle over the money.
According to other reports, the dispute arose because the money transfer was done on the instructions of the Nizam’s finance minister but without the approval of the Nizam’s government. These instructions were irregular as the finance minister of the Nizam had no power to withdraw this money without the express sanction of the Nizam or his government. The Nizam’s subsequent instructions to re-transfer the funds were followed by correspondence between the Nizam of Hyderabad and the bank, leading to arbitration in the British courts.
The matter also went up to the House of Lords, which held that the legal title to the money was vested in the Pakistan government, which was not asserting a beneficiary title to the money. The Cabinet’s decision is likely to trigger another row among the Nizam’s descendants. Mr Muhammad Safiullah, cultural adviser to the Nizam’s Trust, said India will get the biggest chunk of the funds, followed by Pakistan.
“Since there’s no Nizam government now, the Nizam’s trust and his legal heirs will also get a part of the money,” Mr Safiullah said. Mir Osman Ali Khan’s grandsons Shahmat Jah, Mufakham Jah and Mukarram Jah, granddaughter Fatima Fouzia and other family members have all staked claim to part of the funds. “The government should give the share to me and my mother,” said Shahmat Jah. Sources said Mufakham Jah and Mukarram Jah are also planning to explore legal means to claim the funds after Pakistan responds to the overture.
Begum Scheherazade Javeri, former principal adviser to Mukarram Jah, argues that the money belonged solely to the prince. “It is not the money of India or Pakistan,” she added. “Once the matters become clear, we will lay claim,” said a grandson of the Nizam. “The money is ours and we alone are the legal heirs.” Mufakham Jah is currently in Hyderabad and Mukarram Jah is now in London along with his lawyer. Sources said the Nizam’s family may get at least 15 per cent of the total funds. According to Mr Safiullah, who has studied the Nizam’s era in detail, the ruler wanted to help the nascent Pakistani government in 1948 as it had no money to pay even the salaries of its employees.