The dispute centers on the inheritance of properties once owned by Nawab Hamidullah Khan, the last ruling Nawab of Bhopal. In 1950, his elder daughter, Abida Sultan, migrated to Pakistan, leading the Indian government to classify her share of the estate as enemy property under the Enemy Property Act of 1968. This legislation allows the government to seize assets belonging to individuals who moved to Pakistan and acquired its citizenship.
Following Hamidullah Khan's death in 1960, his second daughter, Mehr Taj Sajida Sultan Begum—Saif Ali Khan's grandmother—was recognized as the rightful successor to the remaining property, as per the Succession of Throne Act of Bhopal, 1947. Despite this, the Custodian of Enemy Property for India issued a notice in 2014, declaring the entire estate as enemy property, including the portions inherited by Sajida Sultan and subsequently by her descendants.
In response, Saif Ali Khan filed a petition in the Madhya Pradesh High Court, which initially stayed the government's order in 2015. However, on December 13, 2024, Justice Vivek Agarwal dismissed Khan's petition, lifting the stay and allowing the state government to proceed with the property's acquisition. The court granted Khan a 30-day window to appeal to the Appellate Tribunal, but no such appeal has been filed to date.