Nizam's Money Was Meant to Buy Rifles To Fight India

April 20, 2008
By Syed Akbar
Hyderabad, April 19: Mir Osman Ali Khan, the last Nizam of Hyderabad, had transferred one million Pounds to Westminster Bank in London during 1948 as part of a secret deal to purchase 1,00,000 .303 rifles to strengthen his forces to withstand the might of the Indian Army.
The Nizam was sure of an impending "attack" by the nascent Indian union to accede Hyderabad state. He was ill-prepared for a physical showdown and hence kept pending the issue of merger either with Pakistan or India or declaration of independence. His idea was to buy enough time with the Indian union so that he could arm his forces well.
But before the Nizam could get his supplies of one lakh of .303 rifles, then Union Home Minister Sardar Vallabhbhai Patel launched police action and dethroned the ruler.
Changing his stand Mir Osman Ali Khan declared that the money was transferred to Westminster Bank by his finance minister without his knowledge. It was too late by then and the Indian union had already claimed that the money belonged to it and the Nizam had no right whatsoever over it. Pakistan too came out with its own claim forcing the bank to withhold the money for more than six decades.
The ammunition theory has gained momentum with historians backing it as the most likely reason for the Nizam to transfer his money to London, all of a sudden, a few months before the Indian army intervention. The other theory, which is equally, strong is that the Nizam wanted to help nascent state of Pakistan, which was not in a position to pay even the salaries of its employees. The Nizam had already helped Pakistan with a generous donation in the past and the one million Pound was to help the Muslim country tide over its financial crisis, though temporarily.
The one million Pound has now grown into 31.9 million Pounds or Rs 250 crore. The
Nizam family's share is likely to be around Rs 60 crore to Rs 70 crore, if one goes by the jewellery formula. And which of the Nizam's descendants should get the
money is wrought with legal wrangling.
Says city historian Muhammad Safiullah, "there's evidence that the money was transferred to London for purchase of .303 rifles for the Nizam's army".
But one cannot conclude on this theory for the simple reason that "we do not have any
official records, receipts or documents of the Nizam's administration".
Safiullah, who has obtained three PhDs on Nizam's family and governance,
further says that the records were burnt rather deliberately soon after the police
action. "The bank's receipt (counterfoil) of transfer of money to Westminster Bank is also missing. Had the Nizam's heirs got it in their possession, the story would have been quite different," he points out.
As the mystery over the transfer of funds begins to unravel, the stage is
now set for a multiangular legal fight among the heirs of the Nizam. Indian government may succeed in convincing Pakistan for an out-of-court settlement, but it will find it quite hard to bring the heirs to an amicable agreement.
Experts in Nizam family feel that it will take another six decades for the dispute to resolve, should India and Pakistan agree for out-of-court agreement. Since the Union Cabinet has recognised the share of Nizam's legal heirs, it is imperative
that the family should first sort out the differences. Unless the legal heirs come to a common agreement, the dispute will continue unendingly, says researcher B Moinuddin.
The issue of succession (legal heirs) in the case of the Nizam's family is
quite different from ordinary succession. "It's a royal family succession or titular
succession where not everyone in the family can lay his or her claim. Only the head of the family will have the right to the share. Even if other family members wants their share, the head of the family will get the lion's share. In this case, Mukarram Jah is the head of the family as he was chosen by Mir Osman Ali Khan to succeed him," argues Safiullah.
In reality, it is not going to work. Mukarram Jah is not accepted by other
family members as their head. The Nizam had 16 sons through 12 legally-wed wives. Some of his sons are still alive. He had around 17 daughters and a few of them are also alive. Their children and grandchildren have also laid claim on the Nizam's money.
Nizam's grandsons Nawab Mir Meraj Ali Khan and Nawab Mohammad Mohiuddin
Khan say the money should be divided equally among all the legal heirs.
"Finance Minister Moin Nawaz Jung transferred the money without the knowledge of our
grandfather. The money belongs to us. Mukarram Jah and his former wife
Esra are not the sole claimants. We will explore all legal and political possibilities we will not rest till we get the share," they warn.
As the Nizam's legal heirs fight it out among themselves for their share,
the question arises after all who is the real claimant. India, Pakistan or Nizam's
family or the three and if so, in what proportions?
Nizam's grandsons Mukarram Jah and Mufakham Jah say the money belongs to
them. His other family members claim that Mukarram Jah and Mufakham Jah have no
right. The Pakistani government says it is the sole owner. India has changed its
stand and now wants distribution of the wealth among three claimants.
Begum Scheherazade Javeri, who served as principal advisor to the Nizam's family, is of the view that the money should go entirely to Mukarram Jah. "It is for him to decide. If he wants to give it to others, it is up to him. But he is the real claimant," she says. She recalls the decision of the House of Lords, UK, which in 1957 felt that the money should be lifted from the bank only the warring parties come to an amicable agreement.
Legal experts are of the opinion that India should get 50 per cent of the money while
Pakistan should get 30 per cent. The remaining 20 per cent should be given to the
Nizam's family. Meanwhile, Indian and Pakistani officials have decided to hold a meeting on May 21 to discuss India's proposal for an out-of-court settlement.
But, the Nizam's heirs are busy preparing for a legal battle on the money,
this time in Indian courts.
"We too have the right over the money. We are going to play an important role. The government should give the share to me and my mother. We will claim the funds," says Shahmat Jah, Nizam's grandson.
According to sources Mufakham Jah and Mukarram Jah are also planning to explore legal means to claim funds, but are waiting for the response from Pakistan government at the May 21 meeting. "The Indian government has made its intentions clear. Pakistan is also a party to the dispute. Unless Pakistan government agrees to the proposal, the dispute
will not get resolved. Once the matters become clear, we will lay claim. The money is ours and we alone are the legal heirs," one of the grandsons of the Nizam told this correspondent requesting anonymity.
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Nizam's fabulous jewellery

Mir Osman Ali Khan, the VII Nizam of Hyderabad, had a fabulous collection of
diamonds, jewels and precious stones. The treasure is now valued at more than Rs 3,500 crore. When the Central government purchased the jewellery from the heirs
of the Nizam for Rs 218 crore a decade ago, its value in the international market then was between Rs 1,800 crore and Rs 2,300 crore.
The jewellery collection consists of 173 pieces, which are of great antique value. The notable among the collection is the Jacob diamond weighing 184.75 carats
and a seven-strand pearl necklace containing 150 big size pearls and two diamond
pendants attached to it. It also contained emeralds, diamond-set belt, rings, swords studded with jewels, brooches and gold buttons.
The Nizam's jewellery was locked up in the lockers of a private bank in Mumbai for
decades before the Central government won the legal battle in 1995 and purchased the
collection from the ruler's heirs.
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Mir Osman Ali Khan, the Nizam of Hyderabad

Hyderabad's last Nizam, Mir Osman Ali Khan, had a fancy for diamonds, jewels,
weapons and the finest of clothes. He was the richest man of his times.
The Nizam could best be described as a "benevolent despot", who despite being autocratic was known for his philanthropy.
The Nizam had a fabled collection of diamonds including the world famous
Jacob's diamond. While other princely states decided to join the nascent Indian
union after Independence, the Nizam could not decide on Hyderabad state for quite some time, leading to utter chaos and breakdown of law and order, resulting in what
has become to be known as "police action".
Mir Osman Ali Khan had married 12 times and had 16 sons and 17 daughers through
them, though there are unconfirmed reports that he had a number of concubines and
illegitimate offspring.
The Nizam bypassed his eldest son Azam Jah to declare grandson Mukarram
Jah as his successor. In the Nizam's jewellery case, the largest beneficiary was
Mukarram Jah, followed by his younger brother Mufakham Jah. The other descendants shared the rest of the money from the sale proceeds of the jewels.
Now, Mukarram Jah and Mufakhan Jah claim that they alone had a share in the money
lying with the Westminster Bank in London. And of couse, their claim is challenged by
other family members.