Fugitve diamantaire Nirav Modi suffered a fresh legal setback even as a London court ordered him to pay more than USD 10.7 million (over ₹ 100 crore) to Bank of India.
The ruling was in connection with a loan extended to a Dubai-based company promoted by him, wherein Modi undertook personal responsibility to repay the loan in the event of a default. In this regard, the London Circuit Commercial Court held that Modi was personally liable for the debt, reported news agency ANI, saying he had provided a personal guarantee for the loan granted to the Firestar Group.
In the judgement delivered on Tuesday, the court directed Modi to repay the outstanding dues under the guarantee. The fugitive has been lodged in a London prison since 2019, having been accused of defrauding Punjab National Bank of ₹6,498 crore. He was arrested by Scotland Yard in March 2019, based on India’s extradition request.
What is the case?
The dispute is regarding a loan facility extended by Bank of India to Dubai-based Firestar Diamond FZE in 2012, several years before the PNB case came to light. Modi had executed a personal guarantee in favour of Bank of India on August 3, 2012, according to ANI.
{{/usCountry}}The dispute is regarding a loan facility extended by Bank of India to Dubai-based Firestar Diamond FZE in 2012, several years before the PNB case came to light. Modi had executed a personal guarantee in favour of Bank of India on August 3, 2012, according to ANI.
{{/usCountry}}However, following investigation into the alleged PNB fraud in 2019, the financial position of the Firestar Group deteriorated. The CBI in 2018 registered its first FIR in connection with the case. After Firestar Diamond FZE defaulted on its loan, Bank of India independently initiated recovery proceedings against Modi. The bank issued demand notices, but no payment was made.
The recovery proceedings were challenged by Modi in a UK court, with his lawyers arguing that the personal guarantee was unenforceable and that BoI had failed to make a valid demand for repayment. However, the court rejected these arguments, holding that a 2025 demand notice had also been sent to the prison in which he had been lodged. The court concluded that BoI was entitled to demand repayment, citing evidence of the deteriorated financial condition of the group.
Nirav Modi approaches European Court of Human Rights to halt extradition
Meanwhile, after a UK court refused to reopen his extradition proceedings which had been decided upon in 2022, Nirav Modi approached the European Court of Human Rights (ECHR) in Strasbourg, France.
However, Indian agencies believe that his application is likely to be rejected at the admission stage only, given that his previous attempts to invoke the European Convention on Human Rights have been dismissed by UK courts, according to an earlier HT report.
“If anything, this fresh attempt by Nirav Modi will just delay by a few months his repatriation to India because he has already exhausted all his legal options in the UK,” an official said, requesting anonymity.