One of the world’s longest-running legal battles ended on October 2, 2019, with a British judge ruling that the VII Nizam of Hyderabad’s descendants and India can collect £35 million from London’s National Westminster Bank. Justice Marcus Smith of the High Court of England and Wales ruled that the £1 million (now calculated at £35 million or about ₹306 crore) deposited in the London bank rightfully belonged to the Nizam’s family and India and threw out the claim made by Pakistan through its High Commissioner in London.
How did the Nizam’s wealth end up in a London account?
In the days leading up to India’s Independence, the VII Nizam of Hyderabad, Osman Ali Khan, refused to join the Indian Union. He was among the richest princes in India and hired the services of Sir Walter Monckton. Monckton negotiated a Standstill Agreement for the Nizam with the Government of India. As his lawyers moved between Hyderabad, Delhi and Karachi, the Nizam issued a farman (proclamation) for purchase of weapons to safeguard the landlocked state with the funds parked in two bank accounts in London. The money in the Imperial Bank of India was transferred to a Hyderabad Government account in other banks. One of these accounts had £1,007,940.45.
Who transferred the money?
The sum of £1,007,940.45 was controlled by the Nizam’s envoy and Foreign Minister, Moin Nawaz Jung. On September 16, 1948, Moin Nawaz called on the Pakistan High Commissioner at his Hampstead residence and asked him to accept the funds. The funds were to be kept in account on behalf of Nizam. The transfer of the fund to then Pakistan High Commissioner Habib Ibrahim Rahimtoola’s account happened on September 20, 1948.
How did the Nizam become so wealthy?
The Nizam’s Dominion encompassed parts of Karnataka, Maharashtra and Andhra Pradesh besides the core area of present-day Telangana. Out of the whole area, nearly 10,000 square miles of land was classified as Sarf-e-Khas or crown lands. The revenue from these vast land-holdings was for the personal use of the Nizam. It was this source of revenue that led Time magazine to designate Mir Osman Ali Khan as the richest man in the world (for its 1937 cover), with a fortune estimated at nearly $2 billion. During the Second World War, the Nizam donated nearly £6 million to finance the war effort.
According to one account, the Nizam spent nearly £20 million in cash to equip his army to fight the Indian Army using the services of Australian gun runner Sidney Cotton.
Why did the case drag on for over 70 years?
On September 17, 1948, the Nizam’s army surrendered to India ending a 105-hour war. The transfer of money took place on September 20. On September 27, the Nizam wired the Governor-General of India and the Deputy Prime Minister of India seeking transfer of the money back to his account. The bank refused.
Finally, on October, 2019: U.K. court rules the money must go to the descendants of the Nizam. However, Pakistan has four weeks to appeal against the verdict.
Source: The Hindu