ISLAMABAD: The British High Court of Justice on Tuesday rejected India’s attempt to strike out Pakistan’s claim to the Hyderabad Fund in a judgment the Foreign Office said is a “clear vindication of Pakistan’s stance”.

“The Seventy Five (75 page) judgment of Henderson J. is a clear vindication of Pakistan’s principled stance, and the effective legal strategy being pursued by the new legal team,” Foreign Office Spokesperson Nafees Zakaria said in a statement.

India failed to persuade the court that Pakistan’s position was untenable and it could show no legal entitlement to the 35 million GBP sitting in a bank account in the name of the High Commissioner of Pakistan, since 20th September 1948, the FO statement added.

The judge accepted that there was good evidence in support of Pakistan’s claim to the monies, which needed to be fully considered at a trial and accepted that there were good legal arguments which were supportive of Pakistan’s position, it added.

India, which would now face a substantial costs claim after losing its applications, had argued that Pakistan’s claim to the monies was not valid.

After hearing the arguments put forward by Pakistan’s legal team, the judge considered the evidence that “India and Princes could not assert that Pakistan’s claim to the monies was without basis”.

According to The Times of India (TOI), the Hyderabad Fund was a transfer of GBP 1,007,940 and 9 shillings to a London bank account in the name of Pakistan’s first High Commissioner to the United Kingdom, Habib Ibrahim Rahimtoola, at the Westminster Bank in 1948.

The money was transferred to Rahimtoola by an agent who was acting on behalf of the seventh Nizam of Hyderabad, the TOI reported.

When India and Pakistan were being formed as sovereign states in 1947, there were several princely states too, which were given a choice by the United Kingdom to join either of the two new states or remain independent.

Nizam had decided to remain independent but Hyderabad was annexed to India on September 18, 1948.

On September 20, 1948, the money was transferred to Rahimtoola, and seven days later on September 27, Nizam “sought to reverse the transfer claiming that it had been made without his authority”.

The Foreign Office, in its statement, said the events in 1947-48 were very tense.

“The State of Hyderabad was in danger of being attacked and taken over by India. The UK government archive documents record growing concern voiced by British government officials at the conduct of India towards the State of Hyderabad and its people,” it said.

India maintained its argument before the court that as Nizam had asked for the return of the monies within days of its transfer to Pakistan, he must not have consented to it being handed over to Pakistan.

However, the judge observed that Nizam might not be acting on his free will after his state was annexed to India, the Foreign Office statement said.

The case would now proceed to trial, unless settled.