Battle rages as Nizam’s fortune swells in UK bank

The Nizam’s misfortune
Amarnath K. Menon
May 1, 2008			function WinOpen(theURL, utwidth, utheight) { var remoteWin = null; var params; params = ‘toolbar=0,location=0,directories=0,status=0,scrollbars=1,scrolling=1,resizable=1,menubar=0,width=’+utwidth+’,height=’+utheight; remoteWin = window.open(”",”colorpicker”,params); remoteWin.location.href = theURL; }
var sburl9573 = window.location.href; var sbtitle9573 = document.title; var sbtitle9573=encodeURIComponent(”Battle for Nizam’s fortune”); var sburl9573=decodeURI(”http://indiatoday.digitaltoday.in/the-nizam-s-misfortune.html”); sburl9573=sburl9573.replace(/amp;/g, “”);sburl9573=encodeURIComponent(sburl9573); His fabulous legacy continues to haunt his extended family—300 odd grandchildren and great grandchildren—40 years after his death. What the last Nizam of Hyderabad Mir Osman Ali Khan, the richest man in the world in his time, left for them after naming his eldest grandson Mukarram Jah as custodian and successor-in-title is a bitter battle to share in his legendary fortune. The issue is in focus again with the decision of the government of India to initiate negotiations for the recovery of a huge sum—£1,007,940 and nine shillings— put away by the Nizam in the National Westminister Bank, London, just before Hyderabad became a part of the Union of India in September 1948. The amount has grown (interest for 60 years) to a staggering £30 million or Rs 250 crore. Even the priceless jewels of the Nizam fetched only Rs 218 crore when the 173 piece exquisite collection was bought by the government for retention as national heritage in 1995. Now, the bigger sum lying with the London bank is an issue of national pride not just for India but for Pakistan too as it was deposited in the account of the then Pakistan high commissioner to Britain Habeeb Ibrahim Rahimtoola. Last Nizam Mir Osman Ali Khan How the money reached him and what were the instructions for its use is still under wraps. There are three theories afloat:The money was transferred by the Nizam’s finance minister Moin Nawaz Jung days before he led a five-man delegation to the United Nations to plead Hyderabad’s case for retention of independent status in September 1948. The purpose of sending that huge sum was to stash it away for the Nizam’s personal use at a later date. But it was transferred by Mir Nawaz Jung, Hyderabad’s agent general in London, into the account of the Pakistan high commissioner. The money was to buy 1,00,000.303 rifles for his loyals to resist attempts to take over the princely state by the Indian Army as he nursed ambitions of remaining independent of India. The money was transferred by Jung to the Pakistan high commissioner without the permission of the Nizam for an undisclosed purpose and when the Nizam instructed the bank to re-transfer the amount, it did not comply as it was not from his personal account but that of the state exchequer. Before his death in February 1967, Osman Ali Khan, the seventh and the last Nizam of Hyderabad, did make several attempts to retrieve the fortune but failed. The funds case went for arbitration in British courts. The House of Lords concluded in 1957 that the legal title to the money belonged to the Pakistan government even though it did not assert its beneficiary title. Mukarram Jah with ex-wife Manolya Onur Further, it observed that the account could only be “unfrozen” with the agreement of all parties and only “inter-governmental” talks could resolve the issue.As successor-in-title, grandson Jah launched several initiatives in lobbying for the sale of the jewels through an international auction and recovery of the London bank funds. A politician who played a key role in trying to resolve both the issues at one stage was Subodh Kant Sahay, now minister of state for food processing. Another, Kapil Sibal, minister of state for science and technology and ocean development, was one of a battery of lawyers hired by the Nizam’s grandsons and trustees to retain the family jewels for auction or sale in the open market before they were bought by the government. Now, the government is making moves for a negotiated out-of-court settlement in which it is to share the fortune with Pakistan and the Nizam’s heirs. “We decided to restart the negotiation process with Pakistan to know how much the private beneficiary would get and what would be the terms of distribution between the two governments,” says Sibal. For both the countries, it is more a vexatious issue of embarrassment rather than the sharing of the money. But with numerous heirs ready to stake claim to the money, a royal battle is on the cards. A majority of the heirs insist that the money was transferred from the Nizam’s private estate and it should be distributed among them. No one has any substantive evidence to establish whether the funds flowed from the Nizam’s personal account or the state exchequer. Khan enjoyed the reputation of not only being the richest man in the world but the most miserly too, given the contradictions in his legendary wealth and his austere lifestyle. He was meticulous in putting away wealth for his heirs, other descendants as well as for charitable causes. He instituted 50 odd trusts, including the jewellery trust, which stated the beneficiaries. Part of the Nizam’s jewellery In most cases of personal wealth, the documents spelt out clearly that descendants were entitled only to the interest from the corpus which was to be shared by two grandsons—Jah and his brother Mufakkam Jah, and not his sons, Azam Jah and Moazzam Jah, because the Nizam didn’t consider them worthy enough.What is surprising is that he did not create a trust for the London bank funds. No one has been able to produce a shred of evidence to suggest that the money was part of the personal wealth of the Nizam. So the hoopla by belligerent claimants may only serve to make the government’s out-of-court negotiations a protracted one. Some are looking at legal options to seek a share. They argue that for the distribution of any money or property left by the Nizam, the Muslim Personal Law must prevail as the days of princes, privy purses and privileges are over and in the absence of a trust deed, the law applicable to Muslims for inheritance should be invoked. Some others want it to be shared on the lines of the funds accruing from the sale of the Nizam’s jewels. They plan to take legal recourse in London if they are not recognised as heirs and kept out of the deal while discussing the sharing of the bank funds. “We are ready to produce proof that the London bank funds are from the Nizam’s personal wealth which is to be rightfully shared among all heirs and not just a few,” argues Mahmud Ali Khan, a grandson-in-law of the Nizam. Some are seeking permission for their representatives to attend the tripartite negotiations beginning May 21 besides requesting Vice-President Hamid Ansari for his support in lobbying for their cause which is to stall the money going to a handful of direct descendants led by Jah. Whether they get a penny or not, the other bickering inheritors are poised to raise a legal stink that may show the Nizam in a poor light and make their benevolent forefather turn in his King Kothi grave.

Battle rages as Nizam’s fortune swells in UK bank
24 Apr, 2008, 1326 hrs IST,Omar Khalidi,

The Indian Army’s advanced guard was still about 150 km from Secunderabad during Operation Polo on September 16, 1948, when Hyderabad’s agent general in London, Mir Nawaz Jung (d. 1996), met Pakistan high commissioner Habib Ibrahim Rahimtoola (1912-91 ) at his residence in Hamstead, an elegant suburb. He requested him to accept the transfer of £1 million (approximately £30 million today) to Pakistan’s account in the presence of Pakistan’s foreign minister Sir Muhammad Zafarullah Khan, who directed Rahimtoola to accept the offer. Rahimtoola signed the bank deposit form.

Four days later (September 20) the agent general presented a letter from his boss – Moin Nawaz Jung (d. 1993), Hyderabad Finance & Foreign Minister – to the National Westminster (Natwest) Bank seeking transfer of funds. The bank accepted and notified the parties concerned. The amount was British £1,0007,940 and 9 shillings.

The finance minister was then in Paris attending the Security Council meeting hearing Hyderabad’s case overruling Indian objections.

In the meanwhile, Hyderabad State Force formally surrendered in a military ceremony signed by Major General J N Chaudhuri on behalf of India and Major Syed Ahmad ElEdroos on behalf of Hyderabad. No longer reigning, the Nizam issued a firman directing all Hyderabad officials abroad to return to India. He also cabled the bank requesting no withdrawals from his account. There lies the key to the triangular dispute over the Nizams funds. The FM’s motive was clear: To deny funds to India, who he believed was usurping his master’s kingdom.

But did the account belong to the Nizam or to Hyderabad State? Before the absorption of princely states, the two were not always distinct. Deeming it state funds, India, as the successor state, claimed it and asked its transfer in 1950, while Rahimtoola – now his country’s ambassador to France – asked the money to be transferred to his London successor M A H Ispahani. The Bank refused citing the Nizam’s instructions and Indian claim. It similarly rejected Indian claims too, as the Nizam had created a trust known as Nova Scotia Trust Company in the Bahamas in the name of Mukarram Jah and Mukhaffam Jah, his grandsons.

Rebuffed by the Bank and the Nizam’s move, India filed a suit in a London court. Judge Gerald Upjohn ruled in 1956 that the Nizam held the title to the money, not India, while Pakistan had no “equitable title”.
But, “since he-the Nizamcould not reach the debt only through Rahimtoola”, Pakistan had to be involved now that the money was in its High Commissioner’s name on Bank records.

The operating part of Judge Upjohn’s ruling was simple: The transaction was inter-governmental; it can only be solved through intergovernmental negotiations.

But the matter did not end there, as the case dragged on. In Nov. 1957, the House of Lord held that Pakistan was the “legal owner” of the funds without having the “equitable title” or the “beneficial interest”, which was vested in the Nizam. The three parties to the money dispute were back to square one: Only a tripartite negotiation could result in an agreement forcing the Bank to disburse the funds.

In that spirit Jawaharlal Nehru agreed to do so in a meeting with then Pakistan president Ayub Khan in Karachi in 1960 on a 60-40 basis. So did the late Prime Minister Morarji Desai with the then Pakistan president Zia-ul-Haq in October 1979, so did agree Atal Behari Vajpayee’s cabinet on September 11, 2001!

Now Prime Minister Manmohan Singh’s administration has agreed to negotiate with Pakistan. But as India-Pakistan meetings have the stale odour of another talk; it’s likely to be yet another deadlock!

Meanwhile, the money is growing in the coffers of the gleaming headquarters at Bishopgate in central London. If and when India, Pakistan and the Nizam’s grandsons-through their firm Allen & Overy-file their suit against the Bank to get the money, from whose share will Mukarram Jah and Mukhaffam Jah get their cut? Stay tuned!

(Hyderabad-born, MIT-based American scholar Dr Omar Khalidi is a leading historian on the Nizam’s era)

var RN = new String (Math.random());
var RNS = RN.substring (2,11);
b2 = ‘<iframe align=”left” src=\”http://adstil.indiatimes.com/RealMedia/ads/adstream_sx.ads/www.economictimes.com/Stories/index.html/1′+RNS+’@Right3?\” WIDTH=255 HEIGHT=250 marginwidth=0 marginheight=0 hspace=0 vspace=0 frameborder=0 scrolling=no bordercolor=\”#000000\”> </iframe>’;
if (doweshowbellyad==1)
bellyad.innerHTML = b2;

---

Possibly related posts: (automatically generated)

• As many as 10 banks will repay TARP
• In India, Central Banker Played It Safe