Fugitive businessman Nirav Modi faced another legal setback as a London court ordered him to pay over USD 10.7 million to Bank of India in a loan recovery dispute. The Court held him personally liable for dues linked to Firestar Diamond FZE.
Fugitive businessman Nirav Modi has suffered another legal setback in the United Kingdom. A London court has directed him to pay more than USD 10.7 million (over Rs 100 crore) to the Bank of India in a loan-recovery dispute that stemmed from a personal guarantee Modi executed for a Dubai-based company linked to him.
Delivering the judgment on Tuesday, Justice Simon Tinkler of the London Circuit Commercial Court held that Modi was personally responsible for the outstanding dues of Firestar Diamond FZE, a Dubai entity forming part of the Firestar Group, after it defaulted on its repayment obligations.
The decision represents a major win for Bank of India, which has been pursuing recovery actions against Modi in the broader aftermath of the alleged Punjab National Bank (PNB) fraud. As per the court, Modi’s liability arises under the personal guarantee for the principal outstanding sum of roughly USD 4.1 million, along with the interest claimed by the bank. With interest factored in, the total amount recoverable comes to over USD 10.7 million.
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Adding that Modi did not present any defence explaining why the bank was not entitled to recover the amount, Justice Tinkler observed,
“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,”
The underlying dispute relates to events beginning in July 2012, when Bank of India approved a loan facility for Firestar Diamond FZE. In August 2012, Modi executed a personal guarantee in favour of the bank, committing to individual responsibility for repayment if the borrowing company defaulted.
The Firestar Group’s financial condition deteriorated after allegations connected to the alleged PNB fraud came to light in early 2018. In February of that year, the Central Bureau of Investigation registered its first FIR related to the alleged fraud involving companies associated with Modi and his uncle Mehul Choksi. Following this, Bank of India recalled the loan and issued repayment demands to both Firestar Diamond FZE and Modi. The bank, however, alleged that no repayment was made even after repeated notices.
Modi challenged the proceedings in the London court, arguing that the personal guarantee was not enforceable. His counsel submitted that the bank had failed to issue proper repayment demands and that it lacked adequate grounds to accelerate the loan and demand immediate recovery. Modi also claimed that he did not receive the notices issued in 2018 and 2025, since he was reportedly outside India during those periods.
The court rejected these submissions. Justice Tinkler ruled that the repayment notices had been validly served, noting that the October 2025 demand notice was also sent to HMP Thameside, the UK prison where Modi is currently held. The court further found that a copy of the April 2018 notice had been received by Modi’s legal representatives, indicating that Modi was aware of the bank’s repayment demand.
A crucial question for the court was whether the consequences of the alleged PNB fraud qualified as a “material adverse effect” that entitled Bank of India to recall the loan and enforce the personal guarantee. The court answered in favour of the bank. Justice Tinkler stated that by mid-February 2018, it was reasonable to infer that the borrower and companies within the Firestar Group had been materially and adversely impacted by the allegations surrounding the PNB fraud.
The court also relied on an email from Modi dated February 17, 2018, in which he acknowledged that adverse media reporting had severely affected the group’s operations and threatened its ability to meet liabilities owed to banks.