A status quo agreement can be reached between governments for better governance. Meanwhile, Pakistan interpreted the fact that the J-K silence agreements with India were pending as meaning that the state would eventually join Pakistan. The status quo agreement was separate from the accession instrument formulated at about the same time by the Department of States, which was a legal document including a transfer of sovereignty to the extent defined in the instrument.  The state of Jammu and Kashmir, bordering India and Pakistan, has decided to remain independent. She offered to sign status quo agreements with both gentlemen. Pakistan immediately agreed, but India called for further talks. On 15 August, the State of Junagadh implemented the accession instrument and the status quo agreement with Pakistan. It was adopted by Pakistan on 13 September.  Junagadh was the only state to declare membership in Pakistan until 15 August.  Both draft treaties were submitted to the House of Princes on July 25. A state negotiating committee was formed, which reviewed the two agreements, consisting of ten leaders and twelve ministers.
After discussion, the Committee finalized the two draft agreements on 31 July.  The agreement is particularly relevant insofar as the bidder would have access to the confidential financial information of the entity concerned. After receiving the commitment of the potential purchaser, the target entity has more time to set up additional defence facilities for the acquisition. In some situations, the target entity agrees to repurchase shares of the target with a premium in return for the potential purchaser. A status quo agreement can be practically an agreement between the parties, in which both parties decide to suspend a specific issue for a specified date. This may be an agreement to defer payments to help a customer overcome strict market conditions. It can also be agreements to stop the production of a product. Soon the Nizams found themselves under pressure from Majlis-e-Ittehadul Muslimeen (Ittehad), the Muslim nationalist party that was active in the state and withdrew from the agreement.  On the morning of 27 October, Qasim Rizvi, the leader of Ittehad, organized a massive demonstration by several thousand activists to block the delegation`s withdrawal.
He convinced Nizam that, as India was then linked to the defence of Kashmir, it did not exceed sufficient resources to put pressure on Hyderabad. He claimed that a Hyderabad princess could get a much more favorable deal.  Nizam then appointed a new delegation, dominated by members of the Executive Council opposed to the previous agreement.  Former Hyderabad bureaucrat Mohammed Hyder called the event the “October coup.” From that moment on, Qasim Rizvi began calling the gunfire in the Hyderabad administration.  It is significant that the agreement did not provide for the Dominion of India to deploy Indian troops to the state, while British India had maintained several cantons, notably in Secunderabad, as part of its “subsidiary alliance” with the state. Over the next six months, Indian troops were withdrawn from the state.  Instead, it signed a “status quo agreement” with Pakistan to make services such as trade, travel and communications uninterrupted. The draft status quo agreement was drawn up on 3 June 1947 by the political department of the British-Indian government. The agreement provided that all administrative agreements of “common interest” between the British Crown and a particular signatory state would be kept unchanged between the signatory regime (India or Pakistan) and the State until new agreements are concluded. A separate timetable set out issues of common interest.
During the discussion, Jawaharlal Nehru, India`s future prime minister, expressed doubts about whether the agreement should cover only “administrative” issues.