"In 1897, a terrible famine broke out in Bombay and Poona. Imam Sultan Muhammad Shah made not a little distinction of caste or creed while distributing grain, money and clothes during famine. He built a palace in Poona with a view to provide job opportunities and a means of livelihood to the famine stricken people. The site covered an area of 65 acres in the location of Yeravada in Poona. It construction had been made under the care of Lady Aly Shah. It cost over twelve lac rupees. It became known as the Yeravada Palace or the Aga Khan Palace.
The palace became ready in 1900. It was equipped with Iranian carpets, the walls were decorated with the pictures, highlighting the past history of the Ismailis. It is safe to write that it was the first Ismaili Centre. It was surrounded by plants and gardens. The plant of green rose was unique through out India. The Indian students of agriculture used to visit the Yeravada Palace.
When Prince Aly S. Khan visited India for the first time with his mother, he stayed in this palace for 15 days.
In 1954, the Present Imam and his brother Prince Amyn Muhammad had stayed here during their visit to India.
Birla, the close associate of Gandhi possessed a historical building, Birla Bavan in Delhi. A movement launched to convert the Birla Bavan into a Gandhi Memorial, but its owner refused to surrender the property and the matter was referred to the Delhi High Court. After a long hesitation, he gave it to the Government of India. On the contrary, the Imam, when visited India on February 21, 1969 he made open offer to give the Yeravada Palace to the Indian Government to make it the Gandhi Memorial. It must be known that at crack of dawn on August 9, 1942, the morning after the "Quit India" session of the All-India Congress Committee in Bombay, the British India arrested Gandhi and others. Gandhi and Mahadev Desai were taken to Yeravada Palace, where Kasturba, the wife of Gandhi later joined. She died here on February 22, 1944 and Mahadev Desai also died there. Imam Sultan Muhammad Shah got constructed samadhis for them in the compound of the palace. Gandhi was however released on May 6, 1944.
The Yeravada Palace has been handed over to the Indian Government on Saturday, February 22, 1969 as a national memorial to Mahatma Gandhi. During the handing over ceremony, the Imam said in his speech that, "It was 1897 that my great grand-mother took in hand the construction of this palace and since then the property has been intimately connected with my family so much so that until very recently, close relations have been living here. My grandfather was deeply attached to this property having spent much of his childhood with his mother here, and it was late in the eve of his life that he decided to give the property to my late father. From him the palace has passed to my sister, my brother and myself and it has therefore been in the family for four generations. The palace might well have remained in the family for many more years as a much loved home had it not been for the events in 1942 for it was then that Mahatama Gandhi, his wife Kasturba and his Secretary, Mahadev Desai, were sent here to be kept in house custody. Thus the course of history transformed this property from a treasured family possession to one of National Significance....The members of the Ismaili community in India, my brother and I are sincerely happy on the occasion of the handing over to the Government of India of what is to become a National Monument to the Father of the Nation, and we hope that his memory and the noble and profoundly human ideas for which he lived and died will not only be remembered, by practised by all those who will visit this palace in the future."
Finally, it was turned into a National Monument on the occasion of the silver jubilee independence of India on August 15, 1972.