Fugitive diamond merchant Nirav Modi has suffered another major legal setback in the United Kingdom after the London High Court ruled in favour of Bank of India in a loan recovery case involving more than $10.7 million (over Rs 100 crore).
This development marks a significant financial win for the state-run lender as Indian banks continue pursuing overseas recovery actions against economic offenders accused of siphoning off public money and defaulting on massive loans.
UK court rules in favour of Bank of India
The dispute stemmed from a loan extended by Bank of India to Firestar Diamond FZE, a Dubai-based company linked to Nirav Modi’s business empire. The bank argued that Modi had personally guaranteed the loan, making him legally responsible for clearing the outstanding dues.
Earlier this year, Modi challenged the claim in the UK courts and had personally appeared in London in an attempt to contest the proceedings. However, the High Court sided with Bank of India, validating the lender’s claim and allowing it to move forward with recovery proceedings through legal mechanisms available in Britain.
Rs 100 crore recovery boost for Indian bank
The ruling comes as an important development from a financial standpoint, giving Bank of India a pathway to recover over Rs 100 crore, which would help reduce losses linked to high-profile loan defaults involving fugitive businessmen.
The judgment also sends a bigger message that Indian public sector banks can successfully pursue loan recovery cases internationally, even when borrowers shift assets or business operations abroad.
Another legal defeat for Nirav Modi
This is the latest in a string of setbacks for Nirav Modi, who has remained in UK custody since his arrest in London in March 2019. Earlier this year, the London High Court had rejected his attempt to reopen extradition proceedings, reaffirming earlier decisions that cleared the path for his return to India to face criminal charges. British courts have also repeatedly denied him bail over the years.
Shadow of the PNB scam still looms large
Nirav Modi remains one of the main accused in the 2018 Punjab National Bank fraud case, one of India’s biggest banking scandals involving fraudulent issuance of banking guarantees. Indian agencies including the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) have charged him with fraud, money laundering and criminal conspiracy.
Authorities allege the scam caused losses running into thousands of crores, severely impacting India’s banking sector and triggering tighter scrutiny of loan sanctioning systems.
Why this judgment matters
Beyond the legal significance, the UK court’s decision strengthens India’s broader efforts to recover public money from fugitive economic offenders. In December 2025, the defence ministry informed Lok Sabha that fugitive businessmen collectively owe Indian public sector banks more than Rs 58,000 crore, making international recovery actions increasingly crucial for protecting taxpayer-backed banking institutions.
The ministry had said that as many as 15 individuals, including Vijay Mallya and Nirav Modi, have been declared Fugitive Economic Offenders (FEOs) under the Fugitive Economic Offenders Act, 2018, of which nine are linked to major financial frauds involving public sector banks.
According to the finance ministry’s data in December 2025, banks had managed to recover Rs 19,187 crore from all fugitive offenders. This means that out of the Rs 58,082 crore owed, about Rs 38,895 crore remains unpaid, outstanding principal and interest that banks have not been able to recover yet.