A London High Court has ruled in favour of Bank of India against fugitive businessman Nirav Modi, ordering him to pay over ₹100 crore under a personal guarantee linked to one of his companies. According to reports from The Times of India, ANI, and The Hindu BusinessLine, Modi was found liable for the principal amount of $4.1 million plus accrued interest, totaling more than $10.7 million under a guarantee he signed for a loan to Firestar Diamond FZE. The London Circuit Commercial Court delivered this judgment on Tuesday, marking a significant legal victory for the public sector lender as it pursues recovery of dues linked to the wider fallout from the alleged Punjab National Bank fraud case. Justice Simon Tinkler held that Modi was liable under the personal guarantee to the bank for the principal amount due, stating that "Mr Modi has not provided any defence to explain why the bank was not entitled to that sum." Modi, who has been lodged in a London prison since 2019, suffered this major legal setback as he continues to contest extradition proceedings initiated by India.
The case originated from a loan extended in July 2012 to Firestar Diamond FZE by Bank of India, with Modi signing a personal guarantee in August 2012. As reported by ANI and The Hindu BusinessLine, Modi executed a personal guarantee on August 3, 2012, under which he undertook personal responsibility to repay the loan in the event of default by the borrowing company. The dispute emerged after the PNB scam came to light in early 2018, prompting the bank to recall the loan and issue repayment demands to both Firestar Diamond and Modi in March and April 2018. According to court records, the bank moved to recall the loan in early 2018 after allegations surfaced regarding the multi-crore fraud at Punjab National Bank involving companies linked to Modi and his uncle Mehul Choksi. The court noted that by February 2018, it had become evident that the financial condition of Modi and the Firestar Group companies had been seriously affected, with "the value of the guarantees provided by Mr Modi was very likely substantially impaired." The loan was granted several years before the PNB fraud case came to light, making Modi's personal guarantee binding despite the subsequent fraud allegations.
Modi challenged the bank's claim on three grounds before the London court, arguing that the personal guarantee was unenforceable, he had not received valid repayment notices, and there was no justification for the bank to terminate the loan facility. According to ANI and The Hindu BusinessLine, Modi's lawyers argued that the bank had failed to make a valid demand for payment and lacked sufficient grounds to accelerate the loan and seek immediate repayment. They also claimed that Modi never received notices issued by the bank in April 2018 and October 2025 because he was not present in India at the relevant time. However, Justice Simon Tinkler rejected all three arguments, finding that repayment demands were validly delivered and noting that Modi himself provided a copy of one notice to his solicitors. The court ruled that the fallout from the alleged PNB fraud had affected the Firestar group and significantly impaired the value of Modi's guarantees. Justice Tinkler observed that "from mid-Feb 2018, it was reasonable to infer that the borrower and every company in the Firestar Group was likely to be materially and negatively affected" by the alleged fraud. The court further noted that Modi's legal representatives had been provided a copy of the April 2018 notice in 2019, demonstrating that he was aware of the bank's demand.
This ruling follows an earlier summary judgment granted to Bank of India in March 2024 for the principal sum of $4.1 million plus interest. As reported by The Times of India, the latest judgment clears the way for the lender to pursue recovery of the outstanding amount from Modi under the guarantee. The court's judgment establishes a legal precedent for enforcing personal guarantees in cases involving fraud-related loan defaults, particularly significant given Modi's status as a fugitive businessman facing multiple legal proceedings related to the PNB scam. The ruling represents another significant legal victory for Bank of India as it strengthens the lender's efforts to recover dues from the fugitive businessman while extradition proceedings against him continue in the United Kingdom. The court's decision strengthens the lender's position in pursuing recovery of dues from Modi, who continues to contest extradition proceedings.
Modi's extradition case remains complex as he continues to fight legal battles on multiple fronts. According to the Ministry of External Affairs, India remains committed to bringing Modi back to face justice, with MEA Spokesperson Randhir Jaiswal stating that "the Government of India remains fully committed to ensuring that fugitives are brought back to India to face the law of the land." In March, the UK High Court rejected Modi's petition to reopen his case against extradition, relying on the "quality of assurances" given by the Indian government. The 55-year-old jeweller is accused of orchestrating ₹13,000 crore fraud in the Punjab National Bank in collusion with his uncle Mehul Choksi, who is lodged in a Belgian prison. Modi alone is alleged to have siphoned off ₹6,498.20 crore of the total misappropriated amount, while his extradition was initially ordered by the UK Home Secretary in 2021 but has been stuck in legal limbo since then. The court's latest ruling strengthens India's position in ensuring Modi's eventual return to face justice for his alleged role in the PNB fraud case.
