The Mysterious Mr Jacob: Diamond Merchant, Magician and Spy

by John Zubrzycki

  Annie Abid was examined at a temporary court set up in the Great Eastern Hotel after she claimed to be too ill to leave her room. She described how Jacob had come to her residence in a distraught state, blaming ‘the unlucky word he had said to the Nizam’ about never having to do another day’s work if the sale went through.15

  The prosecution then called the cashier from Hamilton & Co., who told the court Jacob had bought 100,000 rupees worth of goods at their auction in July. The next witness was William Cheetham of Kilburn & Co., who gave evidence about the meetings he had had with Jacob and Tremearne concerning the deposit of 50,000 rupees for the diamond and arrangements for it to be sent from England. He was also questioned about the arrival of the diamond in Calcutta on June 26 and his dealings with Jacob. The Magistrate instructed the court to impound the two amounts totalling 150,000 rupees.

  As the hearing approached the end of the first week, it was becoming clear to the Magistrate, the defence and the prosecution that the case could not continue without the testimony of the Nizam. Summoning a native Indian ruler to appear before a court of law, however, would set a legal and political precedent. The only alternative left to the Magistrate was to order a special commission to proceed to Hyderabad. The commission would have the power to summon the Nizam under oath and admit his evidence in the case. Jacob was asked to be present so he could put questions to him directly in his own defence.

  While both sides agreed with the ruling, they clashed over the timing. Woodroffe insisted that the commission be sent immediately, but Inverarity called for a two-week delay explaining that Jacob needed to return to Simla ‘as his house had been ransacked’. He himself had to attend to his business and could not leave for Hyderabad until the first Tuesday in October.

  Woodroffe argued that this would mean the Nizam would have to retain his legal team during Durga Puja, the most important religious holiday in Bengal, which would be very expensive. Inverarity compromised and said the earliest Jacob could leave would be on Tuesday, September 29. Briefly taking the stand, Jacob explained that the reason for his request was his superstition about leaving Simla on any day but a Tuesday. The only time he had broken this rule was when he had come to Calcutta to get the Imperial Diamond. The bad luck caused by the court case ‘was the result’.16

  On Thursday, September 24, the much-travelled Imperial Diamond was again on its way to Hyderabad. This time, it was enclosed in what the papers referred to as a specially built ‘treasure chest’ and guarded by two European sergeants of the Reserve Police. It was insured at a cost of 14,000 rupees.

  News that the Nizam was to be cross-examined as an ordinary witness reached the city well before the diamond. As word of the commission spread in the bazaars, unprecedented demonstrations broke out. In a state where the ruler’s authority was rarely challenged, rumours of armed insurrection reached the palace. There was also consternation among the nobility who resented what they said was the Nizam ‘humbling himself’17 by appealing to a British court and giving evidence.

  How much of this was spontaneous and how much was engineered by Mahboob Ali Khan’s enemies was unclear. The Bombay Gazette hinted at a deep-seated political conspiracy. It referred to a ‘Calcutta contemporary’ who wished ‘much ill’ to the ‘Minister and the nobles now in power in Hyderabad’.18

  Dennis Fitzpatrick also recognized a political dimension to the unrest. Rumours were flying that the commission was ‘unheard of, destructive of the Nizam’s dignity, dangerously mischievous and everything else bad’, he reported to Durand. One nobleman protested that, if the Nizam’s evidence was criticized or rejected, it ‘would be an eternal disgrace and shake the position of Hyderabad state’. Fitzpatrick wrote that, while such sentiments were in accord with the conservatism that pervaded Hyderabad, it was ‘beyond the shadow of a doubt’ that the agitation had been ‘started or fomented by persons connected with Jacob and wishing to defeat the prosecution’.19

  To calm the unrest and stave off a potential palace coup, Mahboob took the unusual step of issuing a manifesto which was published in the Urdu newspaper Jareeda on October 2. He acknowledged the disquiet caused by the ‘idea of a reigning Prince giving evidence in a judicial matter’ was distasteful and could be seen as ‘derogatory to his dignity as a ruler’. He attributed the emotions stirred by his decision to ‘the loyalty and devotion’ of his subjects, but also pointed a finger at unnamed individuals who wanted to ‘bring discredit on the administration; and possibly in the case of a few individuals, to a design to get rid of the commission and thus defeat the prosecution’.

  He then clarified his relationship with Jacob. ‘I was led to place in him greater trust than he deserved. The result is that he acted in such a manner that it became necessary to take criminal proceedings against him.’ It was his ‘earnest desire that Mr Jacob, whatever cause of complaint I may have against him, should have a fair trial and the fullest opportunity of defending himself’.

  The manifesto went on to say that there were times when a Nizam’s orders overrode all judicial formalities, but these were now past. ‘The holy Koran clearly and emphatically declares that witnesses shall not excuse themselves when they are called.’ He concluded by saying he was only following the example of the Prince of Wales, who appeared in person more than once before some English courts to give evidence.20

  Though the manifesto succeeded in pacifying the protesters, it was ridiculed in the press. The Hindu objected to its ‘silly condemnation of Jacob’s past conduct and the consequent proclamation of the gullibility of His Highness and those about him’.21 The Indian Jurist declared it was ‘absolutely incredible that the Nizam himself should have anything to do with a single paragraph or clause contained in it’. The author of the manifesto must have been ‘some ignorant Mohammedan official of the old school, ignorant alike of the true tenets of Islam and of modern civilization and thought’. It had a ‘primitive simplicity of language not unlike the Bible’.22

  The day after the manifesto was published, Fitzpatrick sent a telegram to Durand. While the idea for the manifesto was entirely Mahboob’s, he had ‘fully approved’ when asked to give his opinion of it. He had, however, advised toning down of some passages, ‘the sharpness of which coming from a potentate like the Nizam with reference to so low a creature as Jacob seemed to me undignified’. He also reported that the manifesto had been well received and that the Nizam was now looking forward to appearing before the commission. ‘Indeed, he seems rather to enjoy the excitement of the thing. His ordinary life is such a blank!’ Nor had he raised any objection to swearing on the Koran. ‘Altogether, he has shown great courage and independence.’23

  He ended the telegram by saying that all the arrangements for the commission were now in place and the Nizam had invited all those involved to have breakfast with him at the Saifabad Palace on Monday, October 5.

  Overlooking the expanse of Hussain Sagar Lake, Saifabad, was the most recent addition to the dozens of palaces the Nizams had erected over the centuries. Originally built to replace Chowmahalla Palace as the Nizam’s residence, it had never been occupied. When Mahboob went to see the palace the first time, a monitor lizard was spotted sitting on the gate, which was considered a particularly bad omen. Now, practicality stumped superstition. Saifabad was considered the ideal venue for the commission as it was located midway between Secunderabad, the site of the British Cantonment, and the Chowmahalla.

  If the Nizam’s intention in inviting the Resident and the opposing legal teams for breakfast had been to create a congenial atmosphere, it backfired. Whatever pleasantries might have followed were cut short when Inverarity revealed that his client was in Bombay, suffering from acute bronchitis.

  Jacob’s no-show threatened to derail the entire commission before it had even sat. A heated argument erupted between the opposing legal counsel over whether the hearing could go ahead. Inverarity admitted he had no affidavit confirming that Jacob was too ill to travel to Hyderabad, but pointed out that, in any case, h
is client had made no commitment to attend the commission. Nor had the judge in Calcutta issued a specific order for him to be present.

  Woodroffe cut in, stating that Jacob’s absence would give ground to the defence to call the evidence taken at the commission as inadmissible. Inverarity offered a personal undertaking that no such objection would be raised and added that once his client had recovered he would come to Hyderabad. He then admitted there was another reason for Jacob’s non-attendance, namely, fears for his own security.

  To what extent those fears were justified was debatable. When Jacob returned to Simla in late September, he had asked Rattigan to send a telegram to Fitzpatrick asking for a guarantee of safe passage. Now, he was particularly concerned by a petition signed by ‘the soldiers and inhabitants of Hyderabad’ that referred to his attending a special commission to make a statement on oath about the diamond case, and that ‘His Highness’s subjects would never let such a disgrace pass without bloodshed’.24 Rattigan also conferred with the Nizam’s Private Secretary Colonel Marshall who assured him Jacob would not be arrested if he went to Hyderabad, but stopped short of guaranteeing his safety.

  While the legal teams argued over whether his nonattendance was justified, Jacob was lying low at the Great Western Hotel on Dockyard Road in Bombay, dismissing as nonsense claims that he feared for his safety. ‘Consider how many times I have been there and how many dealings with the Nizam I’ve had,’ he told a reporter from the Bombay Gazette. Before this case, he had always been treated as a guest of honour. ‘A state carriage was always sent to the station to meet me. I was driven to Eden Gardens which is one of the Nizam’s palaces, and there, I was provided most sumptuously with the best of everything.’25

  Nor had he any cause for complaint against the Nizam. ‘I know that he treated no other merchant who visited his state as kindly as me.’ But that favouritism had created jealousy in certain quarters ‘setting the machinery in motion which has caused this dispute’. As for the legal proceedings against him, he had nothing to fear. ‘I maintain that the Nizam purchased the diamond outright. I have no fear of the result of the case. I have my trump card yet to play; I must not show my hand any more, but I will hold it to the end, and then, when I get the chance to speak, I promise you, you shall hear something more sensational than has yet come out during the hearing of the case.’26

  It wasn’t the first time Jacob was raising expectations prematurely. At 3 p.m. on Wednesday, October 7, 1891, the Imperial Diamond Case special commission finally convened—without its principal defendant. As for his trump card, Jacob was to have it snatched away before he could use it.

  With its kitsch oriental opulence, the Saifabad Palace was an unusual setting for a court hearing that was firmly grounded in the arid landscape of English jurisprudence. The awkwardness went beyond the clashing decorum. Despite Dennis Fitzpatrick’s assertion that Mahboob Ali Khan was looking forward to the proceedings as a welcome break from his ‘dull and monotonous life’, he was clearly uneasy about being questioned on the intimate details of his rule. This was the first time in six generations that a Nizam had been made to submit to such an intrusion. For all the candour he had expressed in his manifesto, he was apprehensive about the outcome and only too aware that his enemies were looking for any sign of weakness to move against his rule. Jacob’s absence brought no comfort, either. He no longer trusted the man who had once been his valued dealer and he had begun to believe rumours that he was behind the agitation over his appearance at the commission.

  Fitzpatrick called the commission to order and asked Mahboob to swear an oath on the Koran. He then ordered that the Imperial Diamond be brought into the room. There was silence as the heavy lock on the metal box was unfastened and the diamond was taken out of its sealed envelope and handed to the witness. Ten weeks after first seeing the Imperial, Mahboob now held the diamond in his hands again. He felt its extraordinary weight, ran his fingers over its facets and carefully examined its lustre. He then asked Fitzpatrick whether he could invite some of his officials to see the stone. With the Commissioner’s approval, a procession of noblemen entered the room. It was the first time anyone from Hyderabad other than Abid and Nizam had set eyes on the legendary jewel.

  ‘As far as I can judge, this is the diamond,’ mumbled the Nizam absentmindedly when Woodroffe asked him to identify the stone. ‘The accused praised the diamond much. I took it in my hand and looked at it and refused to buy it, I said our agreement was passand ya na passand. I said na passand, I cannot take it.’ Asked what happened next, Mahboob replied: ‘He praised it much again and said: “If you don’t take it, the Maharaja of Patiala will take it for 4 million rupees.” When I asked why he was selling it to me for 4.6 million rupees he said that the 600,000 rupees was his profit. He then took the diamond and went away.’27

  Under cross-examination by Inverarity, Mahboob admitted that Jacob had been given what was essentially a blank cheque to purchase anything that ‘might please the Nizam’s taste’, regardless of its cost. He also confirmed that he had bought more jewellery from Jacob than from any other trader, and that he knew about the large commissions Abid and other members of his court were making on every transaction. The cross-examination also confirmed Fitzpatrick’s portrayal of his extraordinary wealth and his insatiable appetite for jewellery. Mahboob admitted his wardrobe alone was worth half a million rupees and that he had spent more than 1.2 million rupees on jewellery from Jacob in the two years before he tried to sell him the Imperial.

  On the second day of the commission, Inverarity pressed the Nizam to admit that his relationship with Jacob was more than merely a business partnership. Although he acknowledged having provided Jacob with a bungalow in Eden Gardens, equipped with servants and a carriage, Mahboob drew a distinction between lodging a traveller and treating him as a guest. Anything approaching friendship, he said, had been out of the question.

  Asked why he had refused to buy the diamond, the Nizam said he thought the price was excessive. ‘I thought that Mr Jacob wished to plunder me, and that, in this way, he was refuting the confidence I had placed in him.’ Nor had the diamond lived up to the praise Jacob had showered on it. He had seen smaller diamonds with better brilliancy and water than the Imperial.28

  A summary of the commission was sent to the India Office. Fitzpatrick later remarked that Mahboob Ali Khan was ‘cool and collected throughout’ and that his evidence was ‘as satisfactory as could be expected’. But his testimony had also betrayed a lack of intellectual and leadership qualities. ‘It exhibits him as a man who forgets heaps of things which any other man would remember, and is at the mercy of people about him to a degree which is perfectly extraordinary.’ It was his firm belief, nevertheless, that the Nizam ‘was really anxious to tell the truth throughout’.29

  It was now Fitzpatrick’s turn to be examined over his role in the diamond affair. This raised certain complications. As he was the Commissioner, he could not examine himself, and his role as Resident precluded his giving evidence that would in any way prejudice state secrets.

  Fitzpatrick’s compromise was to tender a lengthy statement that was partly a vindication of his three years in Hyderabad and partly a shield against being forced to admit his role in trying to scuttle the diamond sale. The statement began by pointing out that, whatever advice he had offered the Nizam was good and that relations between himself and the ruler had ‘invariably been of a pleasant and most confidential nature’. That would not have been the case, however, if the Nizam or his advisers ‘were haunted by an apprehension that I might before long be compelled to disclose publicly what has passed between us, or even that I might some day ask their permission—a permission which there might be some difficulty about refusing—to disclose publicly what has passed.’30

  Fitzpatrick said the only reason he felt obliged to give evidence was the ‘magnitude of the transaction and its effect upon the finances of the state on which any heavy extraordinary expenditure of this sort in a state like Hyderabad
must fall.’ Jacob’s asking price for the diamond, he said, was ‘equal to, or more than, the total amount usually provided in the annual budget of Hyderabad State for payments to His Highness’.

  Like the Nizam’s manifesto, Fitzpatrick’s statement polarized the press. The Hindu, with its customary stridency, called the Resident’s statement to the commission ‘one of the most egotistical documents that has ever been penned by British Indian officials. It makes one smile to see how calmly and coolly he makes his definition of a Resident’s duties chime in with what he has himself done here as Resident.’31

  Fitzpatrick was unflustered by such commentary. To him, the case against Jacob was now ‘a very strong one’, he wrote to Durand after the commission was wound up. A conviction would be an absolute certainty if it weren’t for the recent ‘shocking incidents of acquittals’ by juries in Calcutta and Bombay. ‘It is impossible to be certain of the result before a jury of Calcutta tradesmen, who regard a personage like the Nizam as the natural prey of their class.’ If Jacob were to ask for the Nizam’s forgiveness, Fitzpatrick counselled, it might be wise to let the prosecution charges drop as long as he gave Mahboob the diamond in lieu of returning the deposit. He was told by Hamilton & Co. that the diamond could be sold for 2.1 million rupees, the price Jacob had paid for it. Regardless of the outcome, it would be a mistake for the Nizam to buy the diamond because of the burden to the state treasury. In any case, he noted, the diamond was now regarded as ‘manhoos’, unlucky.

  Fitzpatrick then speculated that the trial might soon be over. It had been Jacob’s hope all along that if the Nizam had refused to appear before the commission, the prosecution would collapse, he pointed out to Durand. ‘Now that the Nizam has given his evidence, and shown such bold pout, Jacob may cave in.’ The commission had produced one other positive outcome. ‘The Nizam who has had his eyes thoroughly opened to the amount of swindling that is always going on around him will be more cautious in the future. I should not be surprised from the way he now speaks if he was, for a time at least, cured of his mania for jewellery, which has cost the state (apart altogether from this diamond transaction) immense sums in the last year.’32