Mohatta Palace was built by Seth Shivratan Chandraratan Mohatta, a Marwari businessman, in 1927. He was a friend of Quaid-i-Azam Mohammad Ali Jinnah.

The government of Pakistan decided, just after the partition, to requisition one residence of people who owned more than one for establishing government offices.

Since Seth Mohatta owned more than one house the government decided to requisition Mohatta Palace for the offices of the Ministry of Foreign Affairs.