In a landmark judgement, the High Court of England and Wales, on Wednesday, ruled in favor of India and two descendants of the 7th Nizam of Hyderabad, in a 71-year-old case.
The court dismissed Pakistan's claim of ownership over the Nizam's fund which now amounts to £35million (Rs. 306 crore).
The Pakistan government had filed the case against Mukarram Jah, titular Nizam of Hyderabad, in 2013.
The case dates back over to 1948
Now, the case dates back to 1948, when Mir Osman Ali Khan, the last Nizam of Hyderabad transferred £1 million. The amount was transferred from the State of Hyderabad's bank account in National Westminster Bank in London to another account in the same bank.
The second account was held by Habib Ibrahim Rahimtoola, who was then Pakistan's High Commissioner to the UK.
Pakistan claimed the money was taken to protect Hyderabad
Later, the Nizam's instructions to re-transfer the funds were not followed.
The Nizam's descendants claimed that the money was gifted to them by their grandfather in a trust formed in April 1963.
However, Pakistan, on its part, claimed that the money was taken as payment for supplying weapons to Hyderabad during India's invasion to annexe the princely state in September 1948.
"The transfer had nothing to do with compensation of Pakistan"
Justice Marcus Smith said, "Although the Government of Hyderabad was involved in the purchase of weapons in order to resist what Nizam VII saw as attempts by India forcibly to annex Hyderabad."
"I do not consider that the transfer had anything to do with the purchase of weapons or the compensation of Pakistan (in any way) for the purchase of weapons," he concluded.
The Princes and India are entitled to the sum: Justice
Eliminating Pakistan completely from the equation, Justice Marcus said, "The Princes and India are entitled to have the sum paid out to their order. I will leave it to parties (Nizam's family and Indian government) to frame an appropriate form of order for my approval."
Great relief to see this dispute finally resolved: Nizam's lawyer
"The judgment covers a complex historical and legal set of issues, interpreting facts and events that occurred 70 years ago to establish that funds, which now amount to £35million, were always held in trust for our client's grandfather, the 7th Nizam," said Paul Hewitt, one of Nizam's lawyers.
"It is a great relief to see this dispute finally resolved in his lifetime," he added.