Fugitive businessman Nirav Modi has suffered another legal setback in the United Kingdom after a London court ordered him to pay more than USD 10.7 million, equivalent to over Rs 100 crore, to Bank of India in a loan recovery dispute linked to a Dubai-based company promoted by him.

In a judgment delivered on Tuesday, the London Circuit Commercial Court ruled that Modi was personally liable for the repayment of dues owed by Firestar Diamond FZE, a Dubai-based entity of the Firestar Group, under a personal guarantee he had executed in favour of the bank.

Court Upholds Personal Guarantee

The court held that Modi remained legally responsible for the debt after Firestar Diamond FZE defaulted on its obligations.

According to the judgment, the recoverable amount includes approximately USD 4.1 million, or around Rs 38.9 crore, as the principal outstanding sum, along with applicable interest claimed by the bank. The total liability exceeds USD 10.7 million.

The dispute arose from a loan facility sanctioned by Bank of India in 2012, several years before allegations related to the Punjab National Bank fraud case surfaced.

On August 3, 2012, Modi signed a personal guarantee undertaking responsibility for repayment if the borrowing company failed to meet its obligations.

Financial Troubles After PNB Fraud Investigation

Court records noted that the financial position of the Firestar Group deteriorated significantly after investigations into the alleged Punjab National Bank fraud became public in early 2018.

In February 2018, the Central Bureau of Investigation registered its first FIR in connection with the case. Investigators later alleged that the fraud involved transactions worth nearly USD 2 billion.

Following the default by Firestar Diamond FZE, Bank of India initiated separate recovery proceedings against Modi based on the personal guarantee agreement.

The bank issued multiple demand notices seeking repayment and maintained that no payments were made despite repeated requests.

The judgment also referred to an email sent by Modi in which he acknowledged that adverse media coverage had severely affected the group’s business operations and its ability to meet financial liabilities.

Court Rejects Modi’s Arguments

Modi challenged the proceedings and argued that the personal guarantee could not be enforced.

His legal team contended that the bank had failed to issue a valid repayment demand and lacked sufficient grounds to accelerate the loan and seek immediate recovery.

The defence also claimed 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, holding that the notices had been properly served.

It observed that the October 2025 demand notice had also been sent to the prison in the United Kingdom where Modi is currently being held.

The court further noted 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.

Based on the evidence presented, the court concluded that Bank of India was entitled to demand repayment, accelerate the loan facility and enforce the personal guarantee.

Extradition Battle Continues

The ruling adds to the legal challenges facing Modi as he continues to resist extradition to India.

Earlier this year, the UK High Court rejected his attempt to reopen his challenge against extradition after considering assurances provided by the Government of India.

Modi remains in custody in the United Kingdom and is pursuing legal remedies before the European Court of Human Rights in an effort to block his extradition.

He is wanted by the Central Bureau of Investigation and the Enforcement Directorate in connection with the alleged Rs 13,000 crore Punjab National Bank fraud case.

The latest judgment is expected to strengthen Bank of India’s efforts to recover outstanding dues while increasing legal pressure on Modi amid his ongoing extradition proceedings.

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