Hyderabad funds case: British court orders Pakistan to pay India £150,000 as legal fee
New Delhi/Hyderabad: In a setback to Pakistan, a British court has directed it to pay £150,000 to India as legal fees in the 67-year-old Hyderabad Funds Case, involving the disputed transfer of the Nizam’s money to Pakistan in 1948.
The fund has grown from £1,007,940 and 9 shillings in September 1948 — when it was transferred by the Nizam’s finance minister to the Pakistan High Commissioner in London — to about £35 million (Rs 326 crore).
The Nizam disputed the transfer two days later, but Pakistan did not return the money. The money now has three claimants: Pakistan, India and the Nizam’s family.
Pak High Commission told to cough up legal fees
The British court termed Pakistan’s behaviour as “unreasonable” and ordered the Pakistan High Commissioner here to pay the legal costs incurred by the other respondents in the case.
It is understood that the legal costs of the respondents, the Government of India, the National Westm-inster Bank and the Niza-m’s heirs, Mukkaram Jah and Muffakham Jah, are approximately £400,000.
Of this, India has been paid £150,000, the National Westminster Bank £132,000 and the Nizam’s heirs about £60,000 each.
Sources said the doors have opened once again for negotiations between the parties — the governments of Pakistan and India and the heirs of the Nizam.
Mohammed Safiullah, an authority on Hyderabad, said, “The Indian government is not too interested because the amount of money itself is too less.”
Following Partition in 1947, the princely states were permitted to join either of the two new states, or to remain independent. The Nizam chose to remain independent.
On September 18, 1948, Hyderabad was annexed to India. On September 20, 1948, the money was transferred to Rahimtoola by the agent. On September 27, 1948, the Nizam sought to reverse the transfer by claiming that it had been made without his consent.
The Bank was unwilling to comply with the Nizam’s request, which stalled the matters for years.
As the successor state to the Nizam’s State of Hyderabad, India pressed its claim over the money, maintaining that it was State monies and not the Nizam’s private monies.
The British House of Lor-ds stepped in and froze the fund. Pakistan could not be prosecuted since it enjoyed sovereign immunity.
In 1960, the Indian Cabinet had approved efforts to pursue an out-of-court settlement with Pakistan and the Nizam’s heirs to recover the funds. In 2008, the Union Cabinet gave its approval to open negotiations with Pakistan.
