A London court Tuesday ordered Indian fugitive diamond businessman Nirav Modi to pay over USD 10.7 million (over Rs 100 crore) to Bank of India in connection with a loan extended to a Dubai-based company promoted by him, news agency ANI reported.
In its judgment, the London Circuit Commercial Court stated that Modi was personally liable for the debt after he provided a personal guarantee for the loan granted by the bank to Firestar Diamond FZE in 2012, the report quoted.
Ruling in favour of the bank, the court held that Modi was legally responsible for repaying the outstanding dues under the guarantee, the news agency noted.
It stated that the businessman’s liability included approximately USD 4.1 million (around Rs 38.9 crore) towards the principal outstanding amount, which, along with interest calculated as per bank’s claim, takes the total liability amount to more than USD 10.7 million.
Dispute traced back to 2012
On August 3, 2012, Nirav Modi executed a personal guarantee in favour of the Indian bank, and accepted personal responsibility to repay the dues if the Firestar company fails to fulfill its obligations.
In February that year, the Central Bureau of Investigation (CBI) to register an initial FIR in connection with Punjab National Bank (PNB) fraud case. Investigators later alleged that the fraud involved transactions worth close to USD 2 billion.
In early 2018, the financial position of the Firestar Group deteriorated following investigations into the alleged banking fraud case. In its findings, the court in London noted this deterioration in the financial conditions of Nirav Modi and the companies under the Group.
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An email sent by Modi to the bank entailed his acknowledgment 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, news agency ANI reported quoting the court’s judgment.
Bank of India’s demand notices and Modi’s challenge
Following the failure by Firestar Diamond FZE, Bank of India began independent recovery proceedings against Modi under the personal guarantee. It issued demand notices seeking repayment of the outstanding dues. Despite these demands, the bank claimed that no payments were made.
Modi then challenged the recovery proceedings before the London court, where 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.
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Modi also claimed he never received the demand notices issued by the bank in April 2018 as well as in October 2025 since he was not present in India at the time.
What did the court say?
The London court, however, rejected Modi’s arguments and held that the demand notices by the Bank of India were properly served, ANI noted.
It noted that the October 2025 demand notice had also been sent to the prison in the United Kingdom where Modi has been lodged since 2019.
The court also made the observation that Modi’s legal representatives were provided a copy of the April 2018 notice in 2019, which shows that he was aware of the bank’s demand.
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The court concluded that Bank of India was fully entitled to demand repayment of the loans, accelerate the facility and enforce Modi’s personal guarantee.
Setback for Nirav Modi
The court’s ruling presents a significant setback for Nirav Modi, who is in the UK contesting his extradition proceedings initiated by India.
In March 2026, the UK High Court rejected his attempt to reopen his challenge, while relying on assurances provided by the Indian government.
Modi is presently dealing with legal remedies before the European Court of Human Rights in an effort to halt his extradition to India. Modi is wanted by the CBI and the Enforcement Directorate (ED) in connection with the alleged multi-billion-dollar Punjab National Bank (PNB) fraud case.
