Highlights
- Judgement relates to banking recovery claim and not wider PNB fraud allegations, lawyers say
- Case concerns a personal guarantee linked to a loan to Firestar Diamond FZE
- In April 2021, then UK home secretary Priti Patel ordered his extradition to face charges in India
FUGITIVE diamond merchant Nirav Modi is liable to pay Bank of India more than £9 million, including interest on a personal loan guarantee, the High Court in London has ruled.
The 55-year-old jeweller, who remains in prison while fighting extradition to India in a separate $2 billion (£1.58bn) Punjab National Bank (PNB) fraud and money laundering case, had challenged the validity of a personal guarantee linked to a loan given to Dubai-based firm Firestar Diamond FZE, which was associated with him.
In a judgment delivered at the London Circuit Commercial Court on Tuesday (23), Justice Simon Tinkler ruled in favour of the Bank of India after a lengthy legal process that was affected by delays in transferring paperwork within the UK prison service.
“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 or unenforceable. Mr Modi is therefore liable under the Personal Guarantee to the Bank for the principal amount due of $4.1m (£3.2m),” he said.
The judge added that interest on the amount was also payable, taking the total due to an estimated $11.5m (£9.1m) up to March 2026, with further interest continuing to accumulate.
“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 said.
Bank of India, represented by Milan Kapadia of Fladgate LLP, had pursued the claim since 2018 after concerns emerged over companies linked to Modi.
“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,” Fladgate said after the judgment.
The court considered three main issues: whether Modi had been properly served with a demand for payment, whether the demand related to money owed to the bank, and whether the personal guarantee was enforceable.
Justice Tinkler ruled in favour of the bank on all three issues. The court also heard evidence from Indian law experts, while Modi largely represented himself as a “litigant in person”.
Transfer of legal papers
During hearings over the past year, Modi sought adjournments, citing severe vision problems, clinical depression and difficulties caused by prison restrictions.
The judgment noted “significant disruption” after Modi was moved from HMP Thameside in south London to HMP Pentonville in north London last October, without arrangements being made to transfer his legal papers. Prison authorities at Pentonville also failed on two occasions to bring him to court despite court orders.
“The 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 over three sets of criminal proceedings in India — the Central Bureau of Investigation (CBI) case linked to the PNB fraud, the Enforcement Directorate (ED) case relating to alleged money laundering, and another case involving alleged interference with evidence and witnesses.
In April 2021, then UK home secretary Priti Patel ordered his extradition to face charges in India after a prima facie case was established. Modi has since made unsuccessful bail applications and legal challenges in UK courts.
In March, he lost an attempt to reopen his extradition case on grounds of an alleged “real risk of torture” in India. He is also believed to have applied to the European Court of Human Rights in France, with confidential proceedings continuing.
(PTI)
