Nirav Modi must pay Bank of India USD 11.5 million, London court rules

A London court has held Nirav Modi liable to Bank of India under a personal guarantee linked to a Dubai loan. The ruling strengthens the bank's recovery claim even as Modi remains jailed in the UK fighting extradition to India.

In Short

• Judge found Modi was validly served and the bank demand lawful
• The personal guarantee was held enforceable under Indian law after expert evidence
• Accruing interest will keep increasing the amount due beyond March 2026

Fugitive diamond merchant Nirav Modi is liable to pay Bank of India more than USD 11.5 million, including accruing interest, under a personal guarantee linked to a loan given to Firestar Diamond FZE, a Dubai-incorporated firm associated with him, the High Court in London has ruled.

Modi, 55, had challenged the enforceability of the guarantee while he remains in prison in the UK fighting extradition to India in the separate USD 2 billion Punjab National Bank fraud and money laundering case. In a judgment delivered at the London Circuit Commercial Court on Tuesday, Justice Simon Tinkler found in favour of Bank of India after a long legal process that was also affected by delays in the transfer of paperwork within the UK prison service.

The court considered three main issues: whether Modi had been validly served with a demand, whether that demand related to a liability he owed to the bank, and whether the personal guarantee was enforceable. On all three issues, Justice Tinkler ruled in favour of the bank after also hearing from experts on Indian law. Modi had largely chosen to represent himself as a "Litigant in Person".

"Mr Modi was validly served with the October 2025 Modi Demand. That was a valid demand for a liability to the Bank under the Personal Guarantee," Justice Tinkler ruled. "The Personal Guarantee is not, as a matter of Indian law, void/unenforceable. Mr Modi is therefore liable under the Personal Guarantee to the Bank for the principal amount due of USD 4,105,189.34," he said.

The judge also referred to "the interest on that sum for which Mr Modi is liable", which takes the amount to an estimated USD 11.5 million until March 2026, with further interest continuing after that date. "The interest calculated on the basis set out by the bank is to be added to the principal sum in calculating the total amount due," the judge concluded.

Bank of India, represented by Milan Kapadia of Fladgate LLP, has been pursuing the case since 2018, when allegations began to circulate about companies associated with Modi. Following the judgment, Fladgate said: "This case is a commercial banking recovery claim by Bank of India against Mr Modi as guarantor. It does not concern, and makes no findings in respect of, the wider fraud allegations against Mr Modi or the Punjab National Bank fraud."

During hearings over the past year, Modi sought adjournments citing severe vision loss, clinical depression and prison-related constraints. The judgment records "significant disruption" after he was moved from HMP Thameside in south London to HMP Pentonville in north London last October without arrangements for his case papers to be transferred. The ruling also notes that Pentonville prison authorities failed on two occasions to produce him in court despite valid court orders. "The (prison) governor provided a full statement that recognised, and apologised for, the errors made. It also identified changes to training and processes that the governor would put in place to ensure that these incidents were not repeated," the judgment said.

Modi remains in custody in connection with three criminal proceedings in India: the CBI case on the PNB fraud, the Enforcement Directorate case on the alleged laundering of the proceeds of that fraud, and a third case involving alleged interference with evidence and witnesses in the CBI proceedings. In April 2021, then UK home secretary Priti Patel ordered his extradition after a prima facie case was established against him. He has since made several unsuccessful bail applications and appeals in the UK courts. In March, he lost a final attempt to reopen his extradition case on the ground of an alleged "real risk of torture" in India, and he is believed to have since approached the European Court of Human Rights in France for an injunction, with confidential proceedings continuing.

The ruling means Bank of India has succeeded in its recovery claim against Modi over the personal guarantee, with the court holding that the demand was valid, the liability was due and the guarantee was enforceable, even as he remains in prison contesting extradition to India in the separate criminal cases.

With PTI Inputs

- Ends