The Bombay High Court on Friday refused to grant immediate relief to the Managing Director and Chief Executive Officer of Edelweiss Asset Reconstruction Company Limited, Raj Bansal, and its chairperson, Rashesh Shah, till August 18, who have been booked for allegedly abetting the suicide of art director Nitin Desai.
A Division Bench of Justices Nitin Sambre and R.N. Laddha was hearing a petition to quash a First Information Report (FIR) against them for allegedly abetting Desai’s suicide.
Senior advocate Amit Desai, appearing for the duo, requested the court to grant them protection from arrest till the next date of hearing. Public prosecutor Aruna Kamat Pai opposed the request and said the FIR was registered only last week and that the probe was still on. The court said, “Wait for a week. Next week we will consider”, and refused to grant any interim relief.
The court also issued notice to Desai’s wife, the complainant in the case, who filed the FIR against Mr. Bansal, Mr. Shah and two others of the same company.
Jitender Kothari, who was appointed by the National Company Law Tribunal (NCLT) as an interim resolution professional, has also moved the High Court seeking the FIR to be quashed in the same case. He was overseeing insolvency proceedings initiated against Desai’s company, ND Art World.
Nitin Desai, 54, well-known art director, production designer, and film and television producer, died on August 2. After two days, his wife lodged an FIR against Mr. Bansal and Mr. Shah under Sections 306 (abetment of suicide) and 34 (common intention) of the Indian Penal Code.
Insolvency petition
According to the police, an insolvency petition was filed against Desai with the Mumbai Bench of the NCLT. The body was retrieved from his ND Studios and sent for autopsy. A case has been registered, and a probe is on to find out the reason for the extreme step. Known for working on films like Lagaan, Jodhaa Akbar, Devdas, Hum Dil De Chuke Sanam, and Prem Ratan Dhan Payo, Mr. Desai reportedly had trouble paying back a ₹252-crore loan.
His company had borrowed ₹185 crore via two loans from ECL Finance in 2016 and 2018. His financial troubles began in January 2020. The debt was later assigned to Edelweiss Asset Reconstruction Company Limited. On January 31, 2020, the company failed to pay interest amounting to ₹4.17 crore against the loans, and the account was classified as a non-performing asset by the creditors on March 31, 2021. The total default amount was ₹252.48 crore as of June 30, 2022.
The bankruptcy court admitted the petition filed by the creditor to initiate corporate insolvency resolution process, and had appointed Mr. Kothari as the interim resolution professional. Sources said the management of Desai’s company would be with Mr. Kothari during the process. Desai’s company had informed the court that there was a fire at the studio in May 2021, which resulted in loss of property. Further, it blamed the creditors for sending a recovery notice on the same day.
