India hails U.K. verdict on former Nizam

Court rejects Pakistan claim, says descendants of Osman Ali Khan are entitled to £35 million fund

Osman Ali Khan, the seventh Nizam of Hyderabad.

Rejecting Pakistan’s claim in the case that dates back to 1948, the High Court of England and Wales ruled in favour of India and the Nizam’s descendants — now mostly based in Turkey and the U.K. — granting them access to a £35 million fund (worth approximately ₹306 crore).

“Nizam VII was beneficially entitled to the Fund and those claiming in right of Nizam VII — the Princes and India — are entitled to have the sum paid out to their order. I will leave it to the parties to frame an appropriate form of order for my approval,” ruled Justice Marcus Smith in his order. “The question before the court is …the shortly-stated one of whether it is Pakistan or the late Nizam VII who was in 1948, entitled to the fund.”

 

The Ministry of External Affairs hailed the order that “upheld India’s claim”, and which also rejected Pakistan’s contention that the Nizam had transferred the funds as a gift or as payment for a shipment of arms. “The Court has issued a wide-ranging judgment today after analysing documentation going back more than 70 years and embracing the law of constructive and resulting trusts, unjust enrichment, foreign act of state, illegality and limitation of actions,” an MEA statement said.

A view of The Royal Courts of Justice in London, Britain.

 

71-year-old case

The case relates to the transfer of £1,007,940 (now worth £35 million) and nine shillings by the Nizam’s envoy and foreign minister in London, Moin Nawaz Jung, on September 16, 1948 to Pakistan when the Indian Army’s tanks were closing in on Hyderabad from all directions. Moin Nawaz Jung transferred the money to the account of Habib Ibrahim Rahimtoola, the High Commissioner of Pakistan in London, which the bank processed on September 20, 1948. However, Hyderabad’s armed forces had already surrendered to General J.N. Chowdhury on September 17, 1948 after a military operation known as “Operation Polo.”

Within days of surrender, the Nizam, Osman Ali Khan, sent a message to the National Westminster Bank demanding that the money be transferred back to his account. Pakistan also claimed the money.

The case has seen many twists and turns over the years. In 1965, the Nizam assigned to the President of India, his claim to the fund, and joined forces with India to fight for his claim on the money. He died in 1967.

The Nizam’s descendants, Prince Mukarram Jah — the titular eighth Nizam of Hyderabad — and his younger brother Muffakam Jah, carried on the legal battle.

Speaking in London after the ruling, senior counsel Harish Salve said that the money will be distributed between India and the Nizam's heirs according to an agreement already reached.

Pakistan said the judgment had not taken into account the “historical context” that led to the Nizam transferring the money to Pakistan’s High Commissioner in London, in order to protect his state from “Indian invasion.” “Pakistan is closely examining all aspects of the detailed judgment and will take further action in light of legal advice received,” said the Pakistani Ministry of Foreign Affairs.

The present case was instituted by Pakistan in 2013 against the bank to transfer the money to Pakistan.

Pakistan’s claim rested on the premise that the money was transferred for the weapons supplied by the country to the Nizam. The court relied on the testimony of Prince Muffakam Jah, documentary evidence as well as public documents produced by India and Pakistan.

“Our client was still a child when the dispute first arose and is now in his 80s. It is a great relief to see this dispute finally resolved in his lifetime,” Paul Hewitt, partner in Withers LLP, who has acted for the VIII Nizam since Pakistan issued proceedings in 2013, was quoted as saying by PTI.