Mumbai: Corporation Bank, one of the consortium of lenders to fugitive Nirav Modi ’s firms Firestar Diamond International Pvt Ltd and Firestar International Ltd, has approached the dedicated bankruptcy court with an insolvency resolution petition for the default of Rs 38.65 crore and Rs 41.31 crore respectively. Corporation Bank is part of the consortium led by Punjab National Bank (PNB) that lent money to the Modi-promoted firms.This is the first insolvency petition filed by the lender since a government agencies launched a probe against Modi and his uncle Mehul Choksi for their alleged involvement in the about $2 billion (over Rs 14,300 crore) Punjab National Bank (PNB) fraud.According to two separate insolvency petitions filed by the Corporation Bank against Modi promoted firms, the bank was part of the consortium that had given money as term loan to the companies and both the companies defaulted on March 31, 2018.“The lenders are relying on all the trade receivables, stocks of finished and semi-finished diamonds and immovable properties including company’s factory and Modi’s residential properties situated in Maharashtra and Gujarat to recover their dues,” said a person aware of the development. “Nirav Modi had also provided a personal guarantee for the loans and hence with this default, he will be personally liable as well.”Last year, soon after the scam came in light, Nirav Modi controlled US firm Firestar Diamond Inc. had filed for bankruptcy in the New York. The US firm listed around $100 million in assets and liabilities and noted it had 50 to 99 creditors. The bankruptcy court in the US is likely to hear the matter on July 17, 2019. Indian authorities are opposing the bankruptcy proceedings in the US.Currently, multiple agencies including Enforcement Directorate (ED), Serious Fraud Investigation Office (SFIO), CBI, Department of Revenue Intelligence (DRI) and the Income Tax department are investigating the fraud.Email queries to Firestar Diamond International, Firestar International and Corporation Bank remained unanswered till press time.Nishit Dhruva, managing partner of law firm MDP & Partners and an advisor to the bank, confirmed the filing of the insolvency resolution petition in the National Company Law Tribunal (NCLT) but refused to divulge details as the matter was sub judice.Separately, the ED approached the court to declare Nirav Modi and Mehul Choksi fugitive economic offender (FEO) in the court. Choksi’s lawyers are opposing the move. The Bombay High Court will hear the matter on June 10.“Even though the PNB has declared the fraud of about $2 billion, the actual size of dues would go even higher, since it will also include unsecured lenders, operational creditors and even employees of the company,” said Priyanka Sinha, co-founder of Mumbai-based law firm A&P Partners. “Also, since the company is being investigated by multiple agencies, the chances of someone coming forward for resolution would be very bleak.”Interestingly, last year ICICI Bank had filed an insolvency petition against Gitanjali Gems, a company controlled by Mehul Choksi, Modi’s uncle and co-accused in the PNB fraud.The Mumbai bench of NCLT admitted the petition last year in October and in April 2019, the resolution professional (RP) of the company told the tribunal that the lenders of the company had rejected the extension of time beyond 180 days for the resolution process of BSE-listed Gitanjali Gems and hence the firm will be referred for the liquidation.As per Gitanjali’s exchange filing, it owes Rs 12,558 crore to its consortium of lenders. These dues were in the form of working capital loans as well as external commercial borrowings (ECBs). Currently, ICICI Bank has 7.9% voting share in the CoC while PNB has exposure of over Rs 5,518 crore and 43.94% voting rights.