INDIA : Battle Royal Still Rages Over a True Gem of a Collection

It is the fabulous legacy of a king, said during his lifetime to be the world’s richest man but who was so stingy he smoked cigarette butts left by his guests.

For more than two decades, India’s government and the heirs of the Nizam of Hyderabad have been bickering over one of the world’s most astonishing jewelry collections.

Recently, three Supreme Court judges moved to end the dispute by giving the government until Dec. 31 to buy all 173 pieces for nearly $58 million. After that, the descendants of the most eccentric of the maharajahs will be free to seek their own buyers.

The trove includes the 184.75-carat Jacob diamond, said to be the world’s third-largest. The Nizam, a notorious miser who ruled a territory half as large as France, kept the priceless gem wrapped in a newspaper and used it as a paperweight.

Other items are a seven-strand necklace of 370 pearls, a pendant with a 200-carat emerald drop, turban ornaments and buckles and armlets studded with diamonds and emeralds, some as large as pigeon eggs.

Though Mir Osman Ali Khan, the seventh and last ruler in his Muslim dynasty, was such a skinflint that he wore the same battered, dirty fez for decades, he was willing to pay great sums for jewelry.

A true connoisseur, this southern Indian potentate--whose realm was annexed by force in 1948 by India--acquired treasures from the Russian czars, including gold-tinged emeralds that one Paris-based jeweler called “simply out of this world.”

Since the deposed ruler’s death in 1967, the opulent collection has been the subject of court actions so tangled and prolonged that they support the contention that precious stones bring misery.

The mess began in 1972, when the numerous heirs, some of whom now live in penury, proposed the government acquire the whole collection.

The official Indian position has changed a few times but basically has been that all the stones, or the most remarkable among them, should stay in India. India’s leaders, however, haven’t had the cash to purchase them.

A Supreme Court-appointed mediator in 1991 gave the government eight weeks to pay up, failing which the heirs were to be able to seek another buyer. But both sides disagreed over price and terms, and the affair dragged on.

“Our estimate is, in the market and sold abroad, all those pieces would fetch 500 crores (5 billion rupees, or $160 million),” said Raian Karanjawala, a New Delhi attorney representing the Nizam’s grandson, Prince Mukarram Jah, who lives on a half-million-acre sheep farm in Australia.

Last month’s judgment ratified both the government’s right of first refusal and a price the maharajah’s descendants feel is far too low.

“Our stand in court was that the government shouldn’t be allowed to purchase the jewels now because it took too long for them to make up their minds,” Karanjawala said.

Gopalakrishnan Venketramani, cultural director of the Human Resource Development Ministry, says the ministry doesn’t have the $58 million to buy the jewels. “It’s not provided for in the budget,” he said. “We’d have to go to Parliament while it was in session to get a supplementary grant.”

Even with the verdict, disagreement persists about the fate of any unbought pieces. Karanjawala said the judges ruled that “anything the government doesn’t want, we are free to export.”

Not so, Venketramani said. “Under the Supreme Court judgment, anything deemed an antiquity is to remain in the country,” the Indian official maintained.

Meanwhile, the glittering treasures that once gladdened a maharajah’s flinty heart will remain inside the Bombay bank where they have been locked up for safekeeping.