When the British rulers left India in 1947, more than 100 principalities were still ruled by princes who were given the choice of acceding to either independent India or Pakistan.
The Muslim ruler of the southern Indian principality of Hyderabad, Nizam Mir Osman Ali Khan, found it difficult to decide whether he should join the Islamic Republic of Pakistan or go with India, where his tiny kingdom would be landlocked by Indian states.
Meanwhile, his finance minister WAs said to have transferred 1,007,940 pounds and nine shillings in 1948 to a bank account of Pakistan's then high commissioner in London.
The Indian government, which soon forced the nizam to accede to the Indian Union, objected to the transfer and the account was frozen.
The nizam's subsequent requests for transferring the money back was ignored. This led to litigation by various claimants in British courts, including India, Pakistan and the nizam's many heirs.
The "Hyderabad funds case" reached the British House of Lords as well, which concluded in 1957 that the account could be "unfrozen" only with the agreement of all the parties.
India's federal cabinet on Friday approved an out of court settlement with Pakistan and the nizam's heirs.
"We decided to restart the negotiation process with Pakistan to know how much the private beneficiary should get and what would be the distribution between the two governments," Science and Technology Minister Kapil Sibal was quoted as saying by The Times of India newspaper after the cabinet meeting chaired by Prime Minister Manmohan Singh.
A family member of the Hyderabad royals was quoted as saying that in 2002, the total number of the last nizam's sons, daughters and grandchildren were 479. At least 300, divided into five groups, are expected to lay claim to the prize, The Times of India said.
Last Mod: 14 Nisan 2008, 08:11