By Krittivas Mukherjee
NEW DELHI (Reuters) - It is a riveting tale of royalintrigue, greed and international politics: a million poundslocked away in a British bank, sparking a row between twocountries and the descendants of an eccentric Indian royal.
The story goes back almost 60 years, to around the timeIndia, then a collection of princely states and British-runterritory, and Pakistan became independent.
The Nizam of Hyderabad, a maharajah of fabled wealth,deposited a million pounds with the National Westminster Bankin London as he dithered over which of the two new nations tojoin.
As the Muslim ruler of an Indian territory the size ofEngland and Scotland, he was attracted by the idea of joiningthe new state of Pakistan. But with landlocked Hyderabadhundreds of miles away from the Islamic state that posedproblems.
While he procrastinated, his finance minister signed overthe money in 1948 to an account at the same bank controlled bythe Pakistan high commissioner to London.
Appalled, and under pressure from India, the Nizam cabledthe bank to freeze the transaction. Soon afterwards, inSeptember 1948, Indian troops annexed Hyderabad.
The story would be just a footnote in the tragic andtraumatic history of the partition of British India were it notfor the fact that the money remains locked in the London bank.
But on Friday, hopes were raised that the fortune -- nowexpected to have grown to about 30 million pounds -- may beretrieved, after India said it would negotiate an out-of-courtsettlement with Pakistan and the descendants of the Nizam.
In 1957, after several rounds of litigation between theNizam and the Pakistani government, the case reached the Houseof Lords, which ruled that the account could only be unfrozenwith the agreement of all the parties.
"Some tentative sort of understanding was arrived at, butbecause of a time lag, that could not be implemented and so weare re-starting the negotiation process," Kapil Sibal, Indianminister for science and technology, told reporters.
The negotiations would be conducted over 18 months,including with the Nizam's grandson, now living in Istanbul ina small apartment after losing much of the family fortune.
The legal imbroglio has been complicated by the lateNizam's past promiscuity -- he is reported to have impregnated86 of his mistresses, siring more than 100 illegitimatechildren and a sea of rival claimants.
"So how much should the private beneficiary get and thenwhat should be the distribution between the government of Indiaand Pakistan will be negotiated," Sibal said.
A frail, devout Muslim, the Nizam was such a miser that hereportedly wore a tattered fez for 35 years, wore crumpledpyjamas and ate all his meals off a tin plate.
During his lifetime, trucks loaded with gold ingots layrusting while his jewellery collection was said to be so largethe pearls alone could fill many rooms.
(Editing by Mark Williams and Bill Tarrant)
