Hyderabad violated all the clauses of the agreement: externally, by plotting with Pakistan, to which it secretly lent £15 million; in defense through the construction of a large semi-private army; in communication, by disrupting border traffic and transit traffic of Indian Railways.  India has also been accused of violating the agreement by imposing an economic blockade. It turned out that the state of Mumbai was disrupting the supply of Hyderabad without Delhi`s knowledge. The government has promised to include the file with provincial governments, but scholar Lucien Benichou says this has never happened. India also delayed India`s arms shipments to Hyderabad, which was later described as a violation of the status quo agreement.  The two draft contracts were submitted to the Prince`s Chamber on 25 July. A state negotiating committee, composed of ten sovereigns and twelve ministers, was set up to discuss the two agreements. After discussion, the Committee finalised the two draft agreements on 31 July.  On August 15, the state of Junagadh concluded the instrument of accession and the status quo agreement with Pakistan. It was adopted by Pakistan on 13 September.  Junagadh was the only state to declare Pakistan`s membership until August 15.  A status quo agreement was an agreement signed between the newly independent dominions of India and Pakistan and the princes of the British Empire before their integration into the new Dominions.
The form of the agreement was bilateral between a Dominion and a princely state. It provided that all existing administrative agreements between the British Crown and the State between the undersigned domination (India or Pakistan) and the Princely State would not be modified until new agreements were concluded.  The draft status quo agreement was formulated on 3 June 1947 by the Political Department of the Anglo-Indian Government. The agreement provided that, until new agreements were concluded, all administrative arrangements of ”common interest” that then existed between the British Crown and a particular signatory state would be kept unchanged between the undersigned domination (India or Pakistan). Issues of common interest have been defined in a separate timetable. During the discussion, Jawaharlal Nehru, India`s future prime minister, doubted that the agreement only covered ”administrative” issues. Mohammad Ali Jinnah, the future governor-general of Pakistan, said it had to be so.  It is significant that the agreement did not provide for the Dominion of India to deploy Indian forces in the state, while British India had maintained several townships, notably in Secunderabad, as part of its ”subsidiary alliance” with the state.
Over the next six months, Indian troops were withdrawn from the state.  The state of Jammu and Kashmir, which joined both India and Pakistan, decided to remain independent. She proposed to sign status quo agreements with the two gentlemen. Pakistan immediately agreed, but India requested further discussions. According to K.M. Munshi, who was appointed Indian agent general in Hyderabad, the Indians felt that reaching a status quo agreement with Hyderabad meant that India had lost control of Hyderabad`s affairs. . . .