What is Status Quo Agreement ?

Status Quo Agreement:

• The Nizam of Hyderabad issued a Farmaana on 26 June, 1947, announcing that the Hyderabad state will not join the union of India or in the constitutional Assembly. 
• Mirza Ismail, prime minister of Hyderabad state suggested that the Nizam government should form a responsible government 
• And hold friendly relations with the independent Indian government. 
• But as the Nizam did not agree to this, Mirza Ismail resigned. 
• Chathari Nawab replaced him. 
• A committee of representatives, led by:

1. Chathari Nawab, 
2. Sir Walter Monktan, 
3. Sir Sultan Ahmed and 
4. Nawab Ali Yavar Jung was appointed to negotiate with the government of India.

• The Committee started negotiations in July 1947.
• The Government of India gave two months to the Nizam to solve this problem. 
• A draft agreement was reached on 18 October, 1947 between the Nizam Government and Union of India. 
• The committee of representations took the signature of the Nizam on it and were about to go to Delhi on 27th October,
• but were stopped by Razakar forces of the majlis-e-Ithehadul Muslimeen. 
• The Nizam government capitulated under the pressure of Majlis and cancelled the agreement as well the committee of representatives. 
• Another committee was appointed in its place. 
• As a result of this “Chathari Nawab” resigned as the Prime minister of Hyderabad. 
• Mir Layak ali, a famous industrialist of Hyderabad replaced him. 
• The new committee tried to change the draft agreement but failed as the union government refused to change it. 
• Finally, the States Quo Agreement was signed by both parties on 29 November, 1947. 
• According to this agreement, The Indian government withdrew its Army Forces from Hyderabad state and 
• K.M. Munshi was appointed as the Agent of Indian government in the Hyderabad state.
• The Nizam went against this agreement and gave 20,000 pounds of the state money to Pakistan Government. 
• He hoped that pakistan, in exchange would help him achieve independent status to Hyderabad state. 
• He issued an ordinance banning the circulation of Indian currency in Hyderabad state.
• He even tried to secure a port town by the purchase of Goa port from the portugal government (but failed). 
• The Nizam spent a lot of money on propaganda in london, 

1. supporting his government; 
2. Increased army forces; 
3. Imported weaponry and 
4. Military equipment illegally from foreign countries; 

• appointed Walter Monkton as his advisor. 
• The Governor general suggested on behalf of India to conduct a referendum in Hyderabad state to know the opinion of the people regarding the merger of Hyderabad State into the Indian Union.
• But the Nizam government refused the suggestion. 
• At the end of negotiations, PM of Hyderabad-Layak Ali made a new proposal, suggesting to prepare a Co-Operation Agreement.
• The Indian government postponed the entire matter, saying that it would not pressurize the Hyderabad government to merge with the union, 
• As it had control over its home, foreign affairs and communications departments and also authority of making laws. 
• This was agreed by the Layak Ali also in principle.