The great-granddaughter of the last Nizam of Hyderabad files a case against the Indian government’s decision to concede a major portion of the £35 million Nizam Fund in the U.K. to two of the Nizam’s grandsons

Mir Osman Ali Khan Bahadur, the VIIth Nizam of Hyderabad.

The decades-long feud between the heirs of the late Mir Osman Ali Khan Bahadur, the VIIth Nizam of Hyderabad, took yet another twisty turn with Shafiya Sakina, the Nizam’s great-granddaughter, filing a case in the Telangana High Court on February 3. Shafiya Sakina urged the court to declare as illegal the methodology adopted and the decision taken by the Government of India to concede a major portion of the £35 million in the “Nizam Fund” or “Hyderabad Fund Case” lying in the United Kingdom’s National Westminster Bank to the Nizam’s grandsons, Mukarram Jah and Muffakham Jah.

Mir Osman Ali Khan had 16 sons and 18 daughters.

In her contention, she said that the agreement between the Union of India and Mukarram Jah and Muffakham Jah was shrouded in secrecy and was non-transparent. Shafiya Sakina urged the court to invalidate the secret settlement, which, in her contention, was arbitrary and violative of Article 14 of the Constitution of India.

Shafiya Sakina, who is the granddaughter of Moazzam Jah, the second son of Mir Osman Ali Khan, also claimed in her petition that the apportionment of the Nizam’s money to just the two male heirs was detrimental to scores (numbering well over a 100) of other heirs like her. She has further accused the Government of India of acting in a discriminatory manner against women.

The money in the Hyderabad Fund Case was money surreptitiously ferried out from Hyderabad to London in September 1948, when Hyderabad was being acceded to the Union of India through Operation Polo. Nawab Moin Nawaz Jung, who was the Finance Minister of Hyderabad State, had transferred £1 million to Habib Ibrahim Rahimtoola, the then High Commissioner of Pakistan to the U.K. As the transfer was rendered unauthorised by the Nizam, the National Westminster Bank froze the funds until rightful claim was established. The amount locked up in the bank had grown to £35 million, or Rs.307 crore, at the time of the verdict delivered by the High Court of England and Wales in favour of India, and Mufakkam and Mukkaram Jah, in October 2019. However, the ratio of the share between the government and Mukarram Jah and Muffakham Jah has not been made public.

Shafiya Sakina claimed in her petition that the Indian government has allegedly given away 98 per cent of the Nizam Fund to Mukarram Jah and Muffakham Jah. This, she contended, was violative in law since the late Nizam had set up as many 28 trusts to look after various assets and welfare measures and named his kin as trustees of these trusts.

“All these trustees are the legal heirs. In fact, it is the Nizam Trust that should inherit the Hyderabad Fund and not just two of the male heirs”, she asserted in her petition. All the trusts of the Nizam were validated by the Nizam’s Trust Deeds (Validation) Act, 1950. States Shafiya Sakina’s petition: “My mother Princess Fatima Fouzia and her sister Amina Merzia are the beneficiaries in the ‘Wedding Gifts Trust’ of the Nizam’s two granddaughters. I and my sister Princess Naqiya Zainab are the ultimate beneficiaries of the said Trust.”

She further contended that the Government of India has no locus standi or authority in appropriating any of the Nizam Fund since the money belonged to the Nizam and not to the Union of India. She further bolstered her claims by alleging in her petition that no court in India has declared Mukarram Jah and Muffakham Jah as the sole successors of the Nizam Fund; nor had the duo obtained any succession certificate in respect of this amount lying in the British bank.

Last November, as per newspaper reports, Najaf Ali Khan, a grandson of the Nizam, decided to take Mukarram Jah and Muffakham Jah to court, accusing them of fraud and a misappropriation of funds among other charges. His contention was that the two princes presented a certificate issued by the Government of India in February 1967 which recognised Prince Mukkarram Jah, alias Barkat Ali Khan, as the Nizam VIII of Hyderabad during the court proceedings. Najaf Ali Khan contended that the certificate was quashed by the Andhra Pradesh High Court in 1968 and Delhi High Court in 1969. “The 26th Amendment to the Indian Constitution added Article 363A, substituting Article 366 clause [22]. Hence the recognition to erstwhile Rulers or successors of Rulers ceased to exist,” he contended.

Najaf Ali Khan claimed that the “invalid” certificate recognising Mukkarram Jah as the Nizam VIII was a violation of the Constitution of India and deprived the rest of the Nizam’s heirs their legitimate right to the £35 million.