UK Court Orders Nirav Modi To Pay Over ₹100 Crore To Bank of India In Loan Recovery Case
A London court has ordered fugitive businessman Nirav Modi to pay over ₹100 crore to Bank of India, holding him personally liable under a guarantee executed for a loan extended to Firestar Diamond FZE
Fugitive businessman Nirav Modi has suffered a fresh legal blow in the United Kingdom, with a London court ordering him to pay more than USD 10.7 million (over ₹100 crore) to Bank of India in a loan recovery dispute arising from a personal guarantee executed for a Dubai-based company promoted by him.
The judgment, delivered by Justice Simon Tinkler in the London Circuit Commercial Court on Tuesday, held Modi personally liable for the dues of Firestar Diamond FZE, a Dubai-based entity of the Firestar Group that had defaulted on its repayment obligations.
The ruling marks a significant victory for Bank of India, which has been pursuing recovery proceedings against the fugitive diamantaire amid the wider fallout of the alleged Punjab National Bank (PNB) fraud case.
According to the court, Modi is liable under the personal guarantee for the principal outstanding amount of approximately USD 4.1 million, together with applicable interest claimed by the bank. The total recoverable amount consequently exceeds USD 10.7 million.
"Mr Modi is liable under the personal guarantee to the bank for the principal amount due of $4.1 million. The interest calculated on the basis set out by the bank is to be added," Justice Tinkler observed, adding that Modi had failed to provide any defence explaining why the bank was not entitled to recover the amount.
The dispute dates back to July 2012, when Bank of India sanctioned a loan facility to Firestar Diamond FZE. In August 2012, Modi executed a personal guarantee in favour of the bank, undertaking individual responsibility for repayment in the event of default by the borrowing company.
The financial position of the Firestar Group deteriorated sharply after allegations relating to the multi-crore Punjab National Bank fraud surfaced in early 2018. In February that year, the Central Bureau of Investigation registered its first FIR in connection with the alleged fraud involving companies linked to Modi and his uncle, Mehul Choksi.
Bank of India subsequently recalled the loan and issued repayment demands to both Firestar Diamond FZE and Modi. However, according to the lender, no payment was made despite repeated notices.
Modi challenged the proceedings before the London court, contending that the personal guarantee could not be enforced. His legal team argued that the bank had failed to issue valid repayment demands and lacked sufficient grounds to accelerate the loan and seek immediate recovery.
He further claimed that he had not received the notices issued by the bank in 2018 and 2025 because he was outside India during the relevant period.
The court rejected those arguments.
Justice Tinkler held that the repayment notices had been properly served, noting that the October 2025 demand notice had also been sent to HMP Thameside, the prison in the United Kingdom where Modi is presently lodged. The court further found that a copy of the April 2018 notice had been received by Modi's legal representatives, demonstrating that he was aware of the bank's repayment demand.
A key issue before the court was whether the fallout from the alleged PNB fraud constituted a "material adverse effect" entitling the bank to recall the loan and enforce the personal guarantee.
The court answered the question in the affirmative.
Justice Tinkler observed that by mid-February 2018, it was reasonable to infer that the borrower and every company in the Firestar Group had been materially and negatively affected by the allegations surrounding the PNB fraud.
The court also relied on Modi's own email dated February 17, 2018, in which he acknowledged that adverse media reports had severely impacted the group's operations and jeopardised its ability to discharge liabilities owed to banks.