Against this backdrop, the Nizam was determined to hang on to his power, wealth and all the trappings of grandeur. He would neither join India nor Pakistan but wished to rule an independent Hyderabad allied if anything to the British. In order to fulfil this desperate dream, he tried every imaginable manoeuvre.
In July 1947, a delegation comprising Nawab Chhatari, Nawab Ali Yavar Jung and Sir Walter Moncton arrived in Delhi. It stated that the ruler of Hyderabad would only sign a Standstill Agreement, not the Instrument of Accession for merger with India. If this condition was not met, then His Exalted Highness the Nizam would exercise his option of merging with Pakistan. Other demands included the return of the Berar region to the Nizam (from whom it had been taken away), together with a plea for the immediate supply of arms and ammunition and failing which permission to import the same. An indulgent Lord Mountbatten, unaware of the Nizam’s ultimate motives asked Sardar Patel to extend the 14th of August deadline for two months, so that Hyderabad’s ruler could ponder over the position he had taken.
An emboldened Nizam now demanded the recognition of Hyderabad as an independent State that would merge with India only with respect to railways, post and telegraph and the army. Furthermore, Hyderabad would appoint its own ambassadors to other countries, and would remain neutral in the event of a war between India and Pakistan. For good measure he concluded with the warning that Hyderabad would seek total independence if India quit the Commonwealth.