During 1971 Bangladesh independence war, Pakistan attacked at several places along India’s western border with Pakistan, but the Indian army successfully held their positions. The Indian Army quickly responded to the Pakistan Army’s movements in the west and made some initial gains, including capturing around 5,500 square miles of Pakistan territory. The war came to a temporary halt with the signing of the Shimla Agreement. In the summit, which opened on 28 June 1972 in Shimla, Mrs. India Gandhi warmly welcomed Mr. Z A Bhutto.

The agreement was the result of resolve of both the countries to “put an end to the conflict and confrontation that have hitherto marred their relations”. It conceived the steps to be taken for further normalization of mutual relations and it also laid down the principles that should govern their future relations. The agreement converted the cease-fire line of December 17, 1971 into the Line of Control (LOC) between India and Pakistan and it was agreed that “neither side shall seek to alter it unilaterally, irrespective of mutual differences and legal interpretations”.

At the time of agreement, the victorious India had with her 90,000 prisoners of war and a large tract of Pakistani territory. In such a favourable state India could have turned a tough bargainer. However Mrs. Gandhi signed an agreement on the night of 2 July after a one-to-one meeting with Bhutto after the parties had packed their luggage for the return. “No one else was present”, but Mrs. Gandhi’s Secretary and economic advisor who was outside the room and has said that there was verbal understanding for a final settlement of the Kashmir question along with an agreement on the Line of Control. Land gained by India in Pakistani Kashmir, Pakistani Punjab and Sindh sectors was returned in the Simla Agreement of 1972, as a gesture of goodwill. There was widespread dissatisfaction in India about the Shimla Accord among the various nationalist outfits, intellectuals and patriots. Strongly condemning this agreement, A B Vajpayee, the leader of the Bharathiya Jana Sangh, described it as a “sell out”.

Reference:

http://www.indianage.com/search.php

http://en.wikipedia.org/wiki/Simla_Agreement

http://en.wikipedia.org/wiki/Indo-Pakistan_War_of_1971

http://www.peacekashmir.org/views-articles/2011/0607-secret-of-shimla-agreement.htm