Hyderabad: According to reports, the money was transferred by an agent who appeared to be acting on behalf of the absolute ruler of one of the largest and richest of the Indian princely states, the seventh Nizam of Hyderabad.
Following Partition in 1947, the numerous princely states within the subcontinent were permitted by the UK to elect to join either of the two new dominions, or to remain independent. The Nizam chose to remain independent.
However, 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 of money, claiming that it had been made without his authority.
The bank was unwilling to comply with the Nizam’s request without the agreement of the account holder. Such consent was not forthcoming, and for a number of years matters remained unresolved.
As the successor state to the Nizam’s State of Hyderabad, India has all along sought to claim the money, maintaining that it was the state’s money and not the Nizam’s private wealth.
Earlier, Nawab Moin Nawaz Jung, the then Finance Minister of Hyderabad, had transferred 1 million pounds to the account of Habib Ibrahim Rahimtoola, Pakistan High Commissioner in London.
The dispute surrounding that money remains unresolved to this day. The Royal Bank of Scotland (formerly the National Westminster Bank) insists that India, Pakistan and the Nizam’s heirs come to an agreement. The fund has now grown to Rs 323 crore.
Moin Nawaz Jung, who was also Hyderabad’s Agent General in London, had said that the money was held in “trust” by the Pakistan High Commissioner. The Nizam had ordered an inquiry into the episode.
