Nirav Modi must repay Rs 108 crore to Bank of India as London High Court upholds personal guarantee

27 June, 2026
Nirav Modi must repay Rs 108 crore to Bank of India as London High Court upholds personal guarantee

Winning Bizness Desk

Mumbai.Fugitive diamond trader Nirav Modi has suffered another legal setback after the London High Court directed him to pay 11.5 million dollars, or around Rs 108 crore, to Bank of India in a loan guarantee dispute. The ruling relates to a personal guarantee he had provided for a loan granted to Dubai-based Firestar Diamond FZE. The decision comes as Modi remains lodged in a London prison for the past seven years while continuing his legal battle against extradition to India.

Loan guarantee declared legally enforceable

The dispute centers on a commercial loan extended by Bank of India to Firestar Diamond FZE, a Dubai company linked to Nirav Modi. Modi had personally guaranteed the loan but later attempted to challenge the validity of that guarantee before the UK court. However, Justice Simon Tinkler of the London Circuit Commercial Court ruled in favour of Bank of India, holding that the demand notice served on Modi in October 2025 was legally valid and enforceable.

Key points of the ruling:

  • Nirav Modi must pay about 11.5 million dollars (around Rs 108 crore).
  • The amount includes both the outstanding principal and accumulated interest.
  • The court upheld the validity of the demand notice issued in October 2025.
  • The liability arises from his personal guarantee for Firestar Diamond FZE.

Indian law supports bank's recovery claim

Justice Tinkler observed that under Indian law, Nirav Modi's personal guarantee cannot be treated as void or ineffective. The court held him liable to repay the principal amount of 4.105 million dollars, estimated at nearly Rs 34.3 crore. With interest accrued until March 2026, the outstanding liability has risen to approximately 11.5 million dollars, or around Rs 108 crore, and the interest will continue to increase until the dues are cleared.

Important facts in the case:

  • Principal amount: 4.105 million dollars (around Rs 34.3 crore).
  • Total outstanding with interest till March 2026: 11.5 million dollars.
  • Interest on the amount will continue to accumulate.
  • The proceedings relate to commercial loan recovery.

Separate from the massive PNB fraud case

The law firm Fladgate LLP, which represented Bank of India, clarified that this case is entirely independent of the nearly 2 billion dollar Punjab National Bank fraud and money laundering investigations involving Nirav Modi. Lawyer Milan Kapadia said the proceedings relate solely to the recovery of commercial dues arising from the personal guarantee. Bank of India has been pursuing this recovery through legal proceedings since 2018.

Recent legal developments:

  • Extradition to India was approved in April 2021.
  • Multiple bail pleas and appeals have already been rejected.
  • In March this year, Modi lost his final UK attempt to stop extradition, claiming he faced the risk of torture in India.
  • According to reports, he has now approached the European Court of Human Rights in France, where the matter is still pending.

Still wanted in 3 criminal cases

Apart from the commercial recovery proceedings, Nirav Modi remains wanted in India in three major criminal cases. These include the CBI investigation into the Punjab National Bank fraud, the Enforcement Directorate's money laundering case, and another CBI case alleging tampering with witnesses and evidence. In April 2021, then UK Home Secretary Priti Patel approved his extradition to India. Since then, several of his appeals and bail applications have failed.