NEW DELHI: A UK court orders fugitive businessman Nirav Modi to repay Rs 100 crore to Bank of India in loan recovery.
The London Circuit Commercial Court ruled that Nirav Modi must personally repay Bank of India under a guarantee he signed for a loan given to Firestar Diamond FZE.
Nirav Modi has suffered a fresh legal setback in the UK after a London court ordered him to pay more than USD 10.7 million (over Rs 100 crore) to Bank of India in a loan recovery dispute linked to a Dubai-based company promoted by him.
He is currently in jail in London.
In a judgment delivered on Tuesday, the London Circuit Commercial Court ruled in favour of Bank of India and held that Modi, also prime accused in the Rs 13,000 crore PNB scam case, was personally liable for repayment under a personal guarantee he had executed for a loan extended to Firestar Diamond FZE, a Dubai-based entity of the Firestar Group.
The court held that Modi remained legally responsible for the debt after the borrowing company defaulted.
The liability includes approximately USD 4.1 million (around Rs 38.9 crore) as the principal outstanding amount, along with applicable interest claimed by the bank, taking the total recoverable amount to over USD 10.7 million.
The dispute traces back to a loan facility sanctioned by Bank of India in 2012, before allegations in the Punjab National Bank (PNB) fraud case emerged.
On August 3, 2012, Modi signed a personal guarantee in favour of the bank, accepting individual responsibility to repay the dues if the borrower failed to meet its obligations.
According to court findings, the financial position of Firestar Group deteriorated sharply after investigations into the alleged banking fraud surfaced in early 2018.
In February that year, the Central Bureau of Investigation (CBI) registered its first FIR in connection with the PNB fraud case.
Investigators later alleged that the fraud involved transactions amounting to nearly USD 2 billion.
SEPARATE RECOVERY PROCESS INITIATED
Following the default by Firestar Diamond FZE, Bank of India initiated separate recovery proceedings against Modi under the personal guarantee agreement.
The bank issued multiple demand notices seeking repayment of outstanding dues but maintained that no payment was received despite repeated attempts.
Modi contested the proceedings before the London court and argued that the personal guarantee could not be enforced.
His legal team claimed that Bank of India had failed to issue a valid repayment demand and lacked sufficient grounds to accelerate the loan and seek immediate recovery.
His lawyers also argued that Modi did not receive notices issued in April 2018 and October 2025 because he was outside India during the relevant period.
The court rejected those submissions and held that the notices had been properly served.
It observed that the October 2025 demand notice had additionally been sent to the prison in the UK where Modi is currently lodged.
The judgment further recorded that Modi’s legal representatives had received a copy of the April 2018 notice in 2019, establishing that he was aware of the bank’s repayment demand.
In its observations, the court noted that by February 2018 it had become evident that the financial condition of Modi and the Firestar Group companies had significantly worsened.
The ruling also 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 liabilities.
