- London court orders Nirav Modi repay Bank of India $10.7M.
- Modi defaulted on personal guarantee for Firestar Dubai loan.
- Court dismissed Modi’s challenge, confirmed bank followed procedures.
A loan agreement signed more than a decade ago has landed fugitive businessman Nirav Modi in fresh legal trouble.
In a significant ruling, a London court has directed Modi to repay more than $10.7 million to Bank of India after holding him personally responsible for a loan extended to a Dubai-based company linked to his Firestar Group, reported ANI. The decision marks another blow for the diamond trader, who remains behind bars in the UK while fighting extradition to India.
The judgment is separate from the high-profile Punjab National Bank (PNB) fraud proceedings but stems from financial obligations that became difficult to ignore after the collapse of Modi’s business empire.
How A Corporate Loan Turned Into A Personal Liability
At the heart of the dispute is Firestar Diamond FZE, a Dubai-based entity that had received a loan facility from Bank of India in 2012.
To secure the borrowing, Modi executed a personal guarantee on August 3 that year, effectively promising to step in if the company failed to repay the bank.
For years, the arrangement remained largely uneventful. That changed after investigations into the alleged PNB fraud surfaced in early 2018, triggering a financial crisis across the Firestar Group and placing several of its businesses under severe stress.
As the group’s financial position deteriorated, Firestar Diamond FZE defaulted on its obligations, prompting Bank of India to invoke the guarantee signed by Modi.
Bank’s Recovery Efforts Reached London
According to court records, the bank issued multiple notices seeking repayment after the company failed to clear its dues.
The lender maintained that despite repeated demands, no payment was received. It subsequently initiated proceedings to recover the outstanding amount directly from Modi.
The court noted that the recoverable amount includes approximately $4.1 million in principal dues along with accumulated interest, taking the total claim to more than $10.7 million.
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Modi Challenged The Demand
The businessman sought to resist the bank’s recovery efforts and argued that the guarantee could not be enforced.
His legal team questioned whether Bank of India had properly accelerated the loan and claimed that repayment notices had not been validly served.
Lawyers acting for Modi also contended that notices issued in April 2018 and October 2025 did not reach him because he was outside India during the relevant period.
The court, however, found little merit in those arguments.
What Convinced The Court
In its ruling, the London Circuit Commercial Court concluded that the bank had followed the necessary procedures before seeking recovery.
The judgment observed that the October 2025 notice had been sent to the UK prison where Modi is currently lodged. It also recorded that his legal representatives had received copies of earlier correspondence, undermining claims that he was unaware of the repayment demands.
The court further pointed to evidence showing the worsening financial condition of the Firestar Group after the alleged fraud came to light.
One factor that appeared to weigh against Modi was an email referenced in the judgment in which he acknowledged that negative publicity surrounding the investigations had severely damaged the group’s operations and ability to meet liabilities.
Based on these findings, the court ruled that Bank of India was entitled to enforce the guarantee and recover the debt.
Another Blow In An Expanding Legal Battle
The ruling comes at a time when Modi continues to battle multiple legal challenges across jurisdictions.
Indian agencies, including the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED), have accused him of involvement in the alleged PNB fraud, a case that investigators say involved transactions worth nearly $2 billion.
While the latest London judgment is focused solely on a loan recovery dispute, it adds to a growing list of unfavourable legal outcomes for the fugitive businessman.
Earlier this year, the UK High Court refused to reopen his challenge against extradition to India after examining assurances provided by Indian authorities.
Modi remains in custody in Britain and is currently pursuing remedies before the European Court of Human Rights in an attempt to halt his extradition.
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