"but why his arms should appear on the bands… "
Maybe it was as simple as just needing to find four coats of arms to maintain the symmetry of the design.
Anyway, Christies seem popular. so here's another one (sorry, I can only do links)
http://www.christies.com/lotfinder/l...ID=54470031002
The "British envoy" referred to was, I believe Sir Alexander Burnes.
Lastly, Mir Murad Ali Khan remained loyal to the British (and them to him), even during The Mutiny of 1857, remaining Amir of Khaipur until his death in 1894.
Regards
Richard