Sarf-e-Khas are crown lands across the princely state of Hyderabad belonging to the Nizam family covering 10,000 square miles. The Dar-ul-Shifa was the headquarters for Sarf-e-Khas during the reign of Nizam II. Sarf-e-Khas land revenue and the resources were used to serve the royalty exclusively, until its merger with Indian Union in 1948. It was taken over by the Government of India after the accession and paid The Last Nizam and his family a sum of one crore per annum. The Nizam had a private army known as Sarf-e-Khas army.
Formerly the Diwani revenue officials were also responsible for the revenue collection of the Sarf-i-Khas lands within their jurisdiction, but during the time of His Highness Nasir-ud-Dowla Bahadur some territories were detached from the Dewani and taken under his personal management. The reason for this was the great irregularity that used to occur in making payments from the treasury, which, owing to the system of revenue collection at the time, was never regular. The lands thus reserved by His Highness for His personal use were called Sarf-i-Khas. Sarf-i-Khas is a compound word of Arabic origin and means a personal or private expenditure.
These are distinct from the Dewani or State lands. They cover an area of about 10,000 square miles consisting of an entire district of seven talukas known as the Atraf-i-Baldah (surrounding the city of Hyderabad) and eleven talukas in the mofusil distributed in the districts of Aurangabad, Parbhani, Bidar, Bhir, Gulburga and Osmanabad with a total population of about one lakh, the revenues of which, go into His Exalted Highnesses privy purse.
The nature of the Sarf-i-Khas talukas is the same as that of crown lands of European sovereigns. Additions were also made from time to time. His Highness Nasir-ud-Dowla purchased some lands and added to these talukas. When Begums of the palace and relations of His Highness who had purchased makthas and held lands died without leaving any heir such property was also added to the talukas.
The Sarf-i-Khas territories thus formed yielding at present an annual revenue of a crore of rupees or more are administered by a special officer known as the Sadar-ul-Moham, working directly under the orders of His Exalted Highness. The revenue receipts are not deposited in the Government Treasury nor are accounts submitted to the Accountant General. All the cash remittances from the districts on Sarf-i-khas account went to the Superintendent of the Sarf-i-Khas, a special Sarf-i-Khas official, who controls the disbursements under orders. The Sarf-i-khas stamps were separate and all Sarf-i-khas accounts are submitted through the Sarf-i-khas Secretary.