By IRNA
New Delhi : India Friday decided to go in for an out-of-court settlement with Pakistan and the heirs of the Nizam to resolve a six-decade-old legal wrangle over the Hyderabad Nizam’s funds lying in a London account.
The decision on one of the long-standing items on the India- Pakistan agenda was taken at a meeting of the Union Cabinet, chaired by Prime Minister, Manmohan Singh.
“The Union Cabinet today gave its approval to pursue an out-of-court settlement with Pakistan and the heirs of the Nizam on the matter of funds lying with the National Westminster Bank,” Science and Technology Minister Kapil Sibal told reporters here.
He said the Cabinet also approved the strategy for negotiations, which would be conducted over a period of 18 months.
“This would release the funds lying locked up in a British bank for the last 60 years and also resolve a long-standing item on the Indo-Pak agenda,” Sibal said.
The origins of the ‘Hyderabad Funds Case’, dating back to September 1948, related to the transfer of over one million Pounds Sterling from the account of the Government of the Nizam of Hyderabad to Habib Ibrahim Rahimtoola, the then High Commissioner of Pakistan in London.
The transfer was made by the Nizam’s finance minister without the ruler’s approval.
The transfer instructions were irregular as the finance minister had no power to do so.
The Nizam’s subsequent instructions to re-transfer the funds were not complied with, leading to arbitration in the British courts.
The matter also went up to the House of Lords.
It held that the legal title to the money vested in the Pakistan government, which was not asserting a beneficiary title to the fund.
Sibal said the valuation of the 1,007,940 Pound Sterling and Nine Shillings fund may now be almost 30 Million Pounds.
“We decided to restart the negotiation process with Pakistan to know how much the private beneficiary should get,” Sibal added.