According to a report by ANI, the ruling delivered on Tuesday came in favour of Bank of India. The court held that Modi is personally liable under a personal guarantee he had provided for loans granted to Firestar Diamond FZE, a Dubai-based company belonging to the Firestar Group.
The court ruled that despite the borrowing company defaulting on its obligations, Modi remained legally responsible for the debt under the terms of the guarantee. Nirav Modi is also the principal accused in the Rs 13,000 crore Punjab National Bank fraud case.
The liability includes an outstanding principal amount of nearly .1 million, equivalent to approximately Rs 38.9 crore, along with applicable interest claimed by the bank. As a result, the total recoverable amount exceeds .7 million.
The dispute stems from a loan facility sanctioned by Bank of India in 2012, several years before allegations emerged in the Punjab National Bank fraud case. On August 3, 2012, Modi signed a personal guarantee in favour of the bank, accepting individual responsibility to repay the outstanding dues if the borrowing company failed to meet its financial obligations.
According to the court's findings, the financial condition of the Firestar Group deteriorated sharply after investigations into the alleged banking fraud began in early 2018. In February that year, the Central Bureau of Investigation registered its first First Information Report in connection with the Punjab National Bank fraud case.
The ruling marks another significant legal setback for Nirav Modi, reinforcing his personal liability in international financial disputes while adding to the mounting legal challenges faced by the fugitive businessman in connection with one of India's biggest banking scandals.
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