Date:12/04/2008 URL: http://www.thehindu.com/2008/04/12/stories/2008041259271700.htm

National

India for out-of-court settlement of row over transfer of Nizam fund

Special Correspondent

Nizam’s heirs to be involved in talks on 60-year-old tangle

The £1 million-fund will have grown to £30 million
Nod for MoU with Mauritius on social defence

NEW DELHI: In yet another attempt at resolving a 60-year old New Delhi-Islamabad legal tangle, the Union Cabinet on Friday gave its approval for pursuing an out-of-court settlement of the dispute over the transfer of over £1 million by the Finance Minister of the Hyderabad Nizam in September 1948 to the then High Commissioner of Pakistan in London without the permission of the Nizam government.

Announcing the Cabinet decision, Science and Technology Minister Kapil Sibal said the fund, £10,07,940 and nine shillings, maintained in the name of the Nizam of Hyderabad’s government in the National Westminster Bank, London, was transferred to another account in the name of the then Pakistan High Commissioner, Habib Ibrahim Rahimtoola, in the same bank.

The Nizam subsequently instructed the bank to re-transfer the amount but it did not comply.

The case went for arbitration in British courts, going up to the House of Lords, which held that the legal title to the money vested in the Pakistan government even though it did not assert to itself a beneficiary title.

Negotiations

Mr. Sibal said the fund would have now grown to about £30 million.

The heirs of the Nizam would also be involved in negotiations, to be conducted over 18 months.

“It has been one long-standing item on the India-Pakistan agenda.”

Train to Bangladesh

The Cabinet also formally approved the agreement with Bangladesh for running a passenger train service between the two countries. It is scheduled to commence on April 14, Bengali new year day.

The meeting, chaired by Prime Minister Manmohan Singh, gave its nod for signing of a memorandum of understanding with Mauritius on social defence, including welfare of elders and programmes for reduction of the demand for illicit drugs, and another pact with Madagascar in agriculture and allied sectors.