Fugitive businessman Nirav Modi has faced another major legal setback in the United Kingdom after a London court directed him to repay more than USD 10.7 million, equivalent to over Rs 100 crore, to Bank of India. The ruling comes in a loan recovery case linked to Firestar Diamond FZE, a Dubai-based company of the Firestar Group promoted by Modi.

The London Circuit Commercial Court delivered its judgment on Tuesday and ruled in favour of the Bank of India. The court held that Modi was personally responsible for repaying the loan under a personal guarantee he had signed in support of the borrowing company. According to the judgment, his liability continued even after the company defaulted on its repayment obligations.

The amount owed to the bank is approximately USD 4.1 million, or nearly Rs 38.9 crore, which is the outstanding principal. Along with the interest claimed by the bank, the total recoverable amount exceeds USD 10.7 million.

The dispute is linked to a loan facility sanctioned by the Bank of India in 2012, several years before allegations related to the Punjab National Bank (PNB) fraud case emerged. On August 3, 2012, Modi signed a personal guarantee in favour of the bank. Through this agreement, he accepted individual responsibility for repaying the dues if the borrower failed to fulfil its obligations.

Court records show that the financial condition of the Firestar Group worsened significantly after investigations into the alleged banking fraud became public in early 2018. In February that year, the Central Bureau of Investigation (CBI) registered its first FIR in connection with the PNB fraud case. Investigators later alleged that the fraud involved transactions worth nearly USD 2 billion.

After Firestar Diamond FZE defaulted on the loan, Bank of India launched separate recovery proceedings against Modi under the terms of the personal guarantee. The bank sent several demand notices seeking repayment of the outstanding dues. However, it stated that no payment was received despite repeated attempts to recover the amount.

Modi challenged the proceedings before the London court. His legal team argued that the personal guarantee could not be enforced. They claimed that Bank of India had not issued a valid repayment demand and did not have sufficient grounds to accelerate the loan and seek immediate recovery of the amount.

His lawyers also argued that Modi never received notices issued in April 2018 and October 2025 because he was outside India during those periods. They maintained that the notices were therefore ineffective.

The court rejected these arguments. It concluded that the notices had been properly served. The judgment noted that the October 2025 demand notice had also been sent to the prison in the UK where Modi is currently being held.

The court further observed that Modi’s legal representatives had received a copy of the April 2018 notice in 2019. This, according to the judgment, established that he was aware of the bank’s repayment demand.

In its observations, the court stated that by February 2018, it had become clear that the financial position of both Modi and the Firestar Group companies had deteriorated significantly. The ruling also referred to an email sent by Modi to the bank. In that communication, he acknowledged that adverse media reports had seriously affected the group’s business operations. He also admitted that the companies were no longer in a position to meet their financial liabilities.

Based on these findings, the court concluded that Bank of India was fully entitled to demand repayment of the outstanding amount. It also held that the bank had the right to accelerate the loan facility and enforce the personal guarantee signed by Modi.

The judgment marks another setback for Modi as he continues to fight extradition to India. He is one of the main accused in the alleged Rs 13,000 crore Punjab National Bank fraud case and remains in custody in the United Kingdom.

Earlier this year, the UK High Court rejected his attempt to reopen his challenge against extradition after reviewing assurances provided by the Government of India. Modi is currently pursuing legal remedies before the European Court of Human Rights in an effort to prevent his extradition.

The latest ruling is expected to strengthen Bank of India’s efforts to recover its dues. It also adds further legal pressure on Modi as he continues to face multiple proceedings linked to the alleged multi-billion-dollar banking fraud case in India.