Fresh blow to Nirav Modi: UK court orders ₹100 crore repayment to Bank of India
New Delhi: Fugitive diamond trader Nirav Modi has suffered a major legal setback after a London court ruled that he is personally liable to repay more than ₹100 crore to Bank of India under a guarantee linked to a loan extended to a company in his Firestar Group.
In a significant ruling, the London High Court has ordered Nirav Modi to pay more than $10.7 million (over ₹100 crore) to Bank of India in a long-running dispute over a corporate loan and personal guarantee. The judgment strengthens the public sector lender's efforts to recover dues from one of India's most high-profile economic offenders.
Justice Simon Tinkler ruled that Modi was liable under the personal guarantee he signed in connection with a loan extended to Firestar Diamond FZE, a Dubai-based company associated with his business empire. The court held that Bank of India was entitled to recover the outstanding principal amount along with applicable interest.
Case linked to Firestar Diamond loan
The dispute dates back to 2012 when Bank of India sanctioned a loan to Firestar Diamond FZE. In 2013, Nirav Modi signed a personal guarantee agreeing to repay the debt if the company failed to meet its obligations.
Following the emergence of the Punjab National Bank fraud scandal in 2018, Bank of India recalled the loan and sought repayment from both the company and Modi. According to court records, the demands were not met, prompting legal proceedings in the United Kingdom.
During the case, Modi argued that the personal guarantee was unenforceable and questioned whether valid repayment notices had been served on him. He also challenged the bank's decision to terminate the loan arrangement.
However, the court rejected those arguments and found that Bank of India had followed the required procedures. Justice Tinkler noted that Modi had failed to provide a convincing legal defence explaining why the bank should not recover the money owed under the guarantee.
The court also dismissed claims that Modi had not received notices from the bank. Evidence showed that notices had been delivered to the London prison where he is currently being held and had also been shared with his legal representatives.
PNB fraud fallout cited in judgment
The judgment referred to the impact of the alleged Punjab National Bank fraud on the financial condition of the Firestar Group. The court observed that the fraud allegations significantly weakened the group's financial position and increased the risk faced by lenders.
The ruling cited an email sent by Modi in February 2018 acknowledging that the circumstances had affected the group's ability to meet its financial obligations. This correspondence helped support the bank's argument that repayment obligations remained valid despite the company's financial difficulties.
Another setback for the fugitive businessman
The latest verdict adds to a series of legal defeats for Modi in the United Kingdom. Earlier this year, a British court rejected his attempt to reopen proceedings challenging his extradition to India.
Modi has remained in custody in London since his arrest in March 2019. Multiple applications for bail have been denied by British courts as Indian authorities continue efforts to bring him back to face charges related to the multi-billion-dollar Punjab National Bank fraud case.
For Bank of India, the judgment represents a major step in recovering funds through international legal channels. It also demonstrates that Indian lenders can successfully pursue claims against defaulting borrowers overseas, even when assets and operations span multiple jurisdictions.
For Nirav Modi, the ruling adds another substantial financial liability to an already growing list of legal and financial challenges. As extradition proceedings and fraud-related cases continue, the decision further tightens the pressure on the fugitive businessman.