London, March
23 | In a setback to
Pakistan, a UK court has directed it to pay 150,000 pounds to India as legal
fees in the 67-year-old Hyderabad Funds case involving the Nizam's money while
terming Pakistan's behaviour as "unreasonable".
Holding that
Pakistan has no "sovereign immunity" in the case, the Judge ordered
the Pakistan High Commissioner to pay the legal costs incurred by the other
respondents in the case relating to the 'Hyderabad Funds' which is currently
valued at 35 million pounds.
It is understood
that the legal costs of the respondents - Govt of India, the National
Westminster Bank & the Nizam's heirs Mukkaram Jah & Muffakham Jah - are
approx 400,000 pounds. Of this India has been paid 150,000 pounds, the National
Westminster Bank 132,000 pounds and the Nizam's heirs about 60,000 pounds each
respectively.
The immunity
waiver under the verdict, which has opened the doors for India to recover the
frozen funds through legal process, is irrevocable. It is also reliably
understood that the Indian government and the heirs of Nizam were holding
consultations on the subject.
This case, known
as the 'Hyderabad Funds Case', relates to transfer of 1,007,940 pounds and 9
Shillings to a London bank account in the name of the High Commissioner in the
UK for the then newly formed state of Pakistan, Habib Ibrahim Rahimtoola, at
the Westminster Bank (now Natwest) in 1948.
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 the
partition in 1947, and the formation of the independent sovereign states of
India and Pakistan, the numerous princely states within the sub-continent were
permitted by the UK to elect to join either of the two new states, 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 its claim
over the money maintaining that it was State monies and not Nizam's private
monies.
However, stuck
in a legal battle with no hope of a resolution since 1960, the Indian cabinet
had approved efforts to pursue an out-of-court settlement with Pakistan and
Nizam's heirs to recover the funds. The Cabinet had also given its approval to
the negotiating strategy in the matter.
With no State
immunity for Pakistan over the funds, India has once again got the chance to
get the money through the legal process.
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