New Delhi : Fugitive diamantaire Nirav Modi, who has been lodged in a London prison since 2019, has suffered a major legal setback after the London Circuit Commercial Court ordered him to pay more than USD 10.7 million (over ₹100 crore) to Bank of India in connection with a loan extended to a Dubai-based company promoted by him.
The court held that Modi was personally liable for the debt after he provided a personal guarantee for a loan granted by Bank of India to a Dubai-based company of the Firestar Group. In its judgment delivered on Tuesday, the court ruled in favour of Bank of India and held that Modi was legally responsible for repaying the outstanding dues under the guarantee.
The court said Modi's liability includes approximately USD 4.1 million (around ₹38.9 crore) towards the principal outstanding amount, together with interest calculated in accordance with the bank's claim, taking the total liability to more than USD 10.7 million.
The dispute relates to a loan facility extended by Bank of India to Firestar Diamond FZE in 2012, several years before the Punjab National Bank (PNB) fraud case came to light.On August 3, 2012, Modi executed a personal guarantee in favour of Bank of India. Under the terms of the guarantee, he undertook personal responsibility to repay the loan in the event of a default by the borrowing company.
According to court records, the financial position of the Firestar Group deteriorated significantly after investigations into the alleged banking fraud surfaced in early 2018. In February 2018, the Central Bureau of Investigation (CBI) registered its first FIR in connection with the PNB fraud case. Investigating agencies later alleged that the fraud involved transactions worth nearly USD 2 billion.
Following the default by Firestar Diamond FZE, Bank of India initiated independent recovery proceedings against Modi under the personal guarantee. The bank issued demand notices seeking repayment of the outstanding dues. According to the bank, no payment was made despite repeated demands.
Modi challenged the recovery proceedings before the London court. His lawyers argued that the personal guarantee was unenforceable and contended that the bank had failed to make a valid demand for payment. They also argued that the bank lacked sufficient grounds to accelerate the loan and seek immediate repayment.
Modi further claimed that he never received notices issued by the bank in April 2018 and October 2025 because he was not present in India at the relevant time. The court, however, rejected these arguments and held that the notices had been properly served. It noted that the October 2025 demand notice had also been sent to the prison in the United Kingdom where Modi is currently lodged.
The court further observed that Modi's legal representatives had been provided a copy of the April 2018 notice in 2019, demonstrating that he was aware of the bank's demand. In its findings, the court noted that by February 2018, it had become evident that the financial condition of Nirav Modi and the Firestar Group companies had been seriously affected.
The judgment referred to an email sent by Modi to the bank in which he acknowledged that adverse media reports had severely impacted the group's business operations and that the companies were no longer in a position to meet their outstanding liabilities.
The court concluded that, in these circumstances, Bank of India was fully entitled to demand repayment of the loan, accelerate the facility and enforce the personal guarantee executed by Modi. The ruling represents another significant setback for Modi in the United Kingdom, where he continues to contest extradition proceedings initiated by India. In March this year, the UK High Court rejected his attempt to reopen his challenge against extradition, relying on assurances provided by the Government of India.
Modi is presently pursuing legal remedies before the European Court of Human Rights in an effort to halt his extradition to India, where he is wanted by the CBI and the Enforcement Directorate in connection with the alleged multi-billion-dollar Punjab National Bank fraud case.