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Indian government to intervene, as Pakistan claims Nizam of Hyderabad's GBP 34 mn
Solicitor general Mohan Parasaran has advised the Indian government to act "swiftly" in the matter. The value of the holdings comes to about £34 million in current terms, according to people familiar with the matter.
NEW DELHI: Over at the ministry of external affairs, some people are having a hard time hiding their smirks. It's not often that they get to score against the Pakistanis off what was the equivalent of an own goal. But this story needs to be told from the beginning, which was about 70 years ago, in 1948, in Hyderabad. To say it was a time of ferment is an understatement. After India gained independence the year before, Nizam of Hyderabad said he didn't want to become part of the union, sparking an agitation. In September 1948, the Indian Army took over Hyderabad state, persuading the Nizam to sign the Instrument of Accession.
The Nizam's government maintained an account at the Bank of Westminster, now National Westminister or NatWest, in the UK.Before the annexation, the finance minister of Hyderabad instructed the bank to transfer the funds, £1 million at the time, to Habib Ibrahim Rahimtoohla, then Pakistan's high commissioner to the UK.
Shortly thereafter, the Nizam and the state of Hyderabad brought a civil action against the finance minister, Rahimtoohla and the bank, alleging that the official hadn't been authorised to order the transfer.
These proceedings were stayed by the House of Lords in 1957 on account of Pakistan's sovereign immunity. Repeated attempts at resolving the dispute diplomatically resulted in a stalemate, owing to claims by various parties such as the Nizam's grandsons, apart from India and Pakistan.
"As a result of the stay of proceedings by the House of Lords, a stalemate prevailed and the monies lying in the account of the High Commissioner of Pakistan.... Both India and Pakistan have entered into dialogues at various levels to resolve the dispute but those have remained unsuccessful," according to official documents.
The reason this has become a live issue may stem from a misjudgement on the part of the Pakistan government in moving a British court in April last year in a bid to free up the money, which it claimed legal title over. But this move implied that Pakistan would submit to the jurisdiction of the British court, giving India and the Nizam's descendants the opportunity to implead themselves in the suit.
When presumably this realisation dawned, the high commissioner served a notice of discontinuance on November 23, seeking to withdraw the case.
The court had said that Pakistan won't be able to resurrect the old proceedings successfully unless it waived sovereign immunity. Pakistan had also been told that the bank would have to let India and the Nizam's descendants know about the move to free up the money.
According to Indian officials, it was at this point that the ministry of external affairs sought the legal opinion of solicitor general Parasaran, who gave it on January 4.
Solicitor general Mohan Parasaran has advised the Indian government to act "swiftly" in the matter. The value of the holdings comes to about £34 million in current terms, according to people familiar with the matter.
"Under the given circumstances, opportunity has presented itself on the doors of India to once again try and re-agitate the issue which had been buried with no hope of seeing the light of day subsequent to the stay order by the House of Lords effectively freezing the funds lying in the NatWest Bank," Parasaran said in his opinion, which ET has reviewed. "I must reiterate that this is the first time in the past 50 odd years that an opportunity has presented itself to break the stalemate." The Nizam's heirs have sought to implead themselves in the proceedings. NatWest Bank has also submitted an interpleader application calling for India to be heard in adjudicating upon the issue.
Parasaran has advised the foreign ministry that it must participate/implead itself in the proceedings that have been initiated by Pakistan and contest the notice of discontinuance. An alternative is to file a fresh case in the UK courts on the grounds that Pakistan has waived its sovereign immunity by implication after having instituted a civil action
The government should either get itself impleaded directly or agree to the inter-pleader application of the bank and proceed with the matter, Parasaran has advised. Meanwhile, the foreign ministry is also exploring the possibility of an out-of-court settlement, also one of the options that Parasaran has advised. "In any event, the dispute appears to be a tripartite one amongst India, Pakistan and the heirs of the Nizam and therefore any bilateral discussion, at the exclusion of heirs of the Nizam, may not be acceptable to the Bank or the British courts," according to Parasaran. "Therefore, if all the three parties can agree to a settlement, they can file the said settlement before a British court and get the funds released from the Bank in accordance with their respective shares as agreed in the settlement.
Source:- Indian government to intervene, as Pakistan claims Nizam of Hyderabad's GBP 34 mn - The Economic Times
