On 15th
Aug 1947, the Great Nation got its freedom … do you know of the case arising
out of transfer of funds across 1600 km approx becoming subject matter of a
Court that is situate almost 7000 km away ! ~ Sovereign immunity is a legal doctrine by which
the sovereign or state cannot commit a legal wrong and is immune from civil
proceedings or criminal prosecution. The doctrine stems from the ancient
English principle that the monarch can do no wrong.
Sure,
you would have read about the news in all dailies of ‘UK Court asking Pakistan
to pay GBP 150,000 [Rs. 1.39 crores approx] to India as legal fee’. In a setback to
Pakistan, a UK court has directed Pak 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 here 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 and the Nizam's heirs Mukkaram Jah and 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 stated that the Indian government and the heirs of
Nizam are holding consultations on the subject. Newspaper reports suggest that
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.
Upon partition of
the country, the Nizam of Hyderabad wanted to be independent. On Sept. 1948, Hyderabad was annexed to India
and a couple of days later this transfer of money reportedly occurred. However, on 27th Sept. 1948, the
Nizam sought to reverse the transfer 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.
With Hyderabad
being a part of the India, the Nation has been staking its claim over the money
as it was State fund and not the private money of Nizam. The legal entanglement has remained elusive
to settlement. The recent judgement in
London’s High Court of Justice tilts the 67 year old case in favour of
India. Over the years, when India had
to deal with Pak bilaterally, because in 1957, Islamabad invoked its right to sovereign
immunity from court proceedings in Britain.
On the financial
dispute, in 2013, Islamabad decided to
claim the funds and reopened legal proceedings. The success through the legal route appears
brighter. It is stated that the transfer
of such a high amount was made without Nizam’s consent. In 1954 the matter reached the British
courts after the erstwhile Nizam and the State of Hyderabad (part of India) challenged the transfer saying it had been
done without the erstwhile ruler's consent. The matter went to the House of
Lords. In 1957 the House recognized Pakistan's right to invoke sovereign
immunity but noted that legal proceedings to determine ownership would now be
blocked forever. In 2013 Pakistan filed a legal claim against the National
Westminster Bank for full recovery.
There were reports
suggesting that the members of Nizam family had written to Pakistan President Asif Ali Zardari, urging
him to reciprocate to India's offer of an out-of-court settlement. Immediately after the transfer, India raised
an objection to the transfer, saying the Nizam was not an independent ruler and
prevailed upon the bank to freeze the account. Since then the matter is hanging
fire.
In 2008,
reportedly, Indian government decided to pursue an out-of-court settlement with
Pakistan and the heirs of the Nizam. The cabinet took the decision after
Nizam's descendants met Prime Minister Manmohan Singh and then foreign minister
Pranab Mukherjee. A cultural advisor to
the Nizam’s Trust was quoted as saying that Nizam's heirs may get 20 percent of
the money while the lion's share will go to India. Of the Nizam's 34 children, two sons and
three daughters are still alive while there are a total of 104 grandchildren.
In
India, the Privy Purse was a payment made to the royal families of erstwhile
princely states as part of their agreements to first integrate with India in
1947, and later to merge their states in 1949 whereby they lost all ruling
rights. In 1947 there were more than 560 such princely
states in India, and by the eve of independence, most of the States signed Instrument
of Accessions to India Kashmir, Junagadh and Hyderabad were integrated later. In 1949 they were all fully merged with India to form new states.
The motion to
abolish Privy Purses, that had been
defeated in Rajya Sabha earlier was successfully passed as the 26th Amendment
to the Constitution of India in 1971. The then Prime Minister Mrs. Indira Gandhi argued the case for abolition
based on equal rights for all citizens and the need to reduce the government's
revenue deficit. The last ruler of Nizam
was Mir Osman Ali Khan between 1911 and 1948.
During his days as Nizam, he was reputed to be the richest man in the
world, having a fortune estimated at US$2 billion in the early 1940s. The Nizam's vast inheritance was accumulated
as mining royalties.
The proposal for
independence was rejected by the British government, then the Nizam opened negotiations with the
Government of India ; concurrently
encouraged the activities of the Razakars. The Nizam cited the Razakars as
evidence that the people of the state were opposed to any agreement with
India. Ultimately in a swift battle, the
Nizam soldiers and Razakkars gave up easily.
The
Indian common man are not fully aware of the fact that so many crores of
State’s funds were transferred in favour of Pak [later disputed by Nizam] and
frozen in bank due to the legal battle.
1629 km is the distance from Hyderabad, India, to Lahore, Pakistan and
.. 6707 km is the distance between New Delhi to London.
With regards – S.
Sampathkumar
25th Mar
2015.
Photo of Indian
Independence in 1947 – source and ownership of photo not known. If violating any copyright, will be removed
immediately upon info.
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