Nitin Desai Suicide: Edelweiss Chairman & CEO, MD Move Bombay HC Seeking Quashing Off FIR In Art Director's Death Case

Mumbai: Chairman of Edelweiss Financial Services Rashesh Shah; and Managing Director and CEO of Edelweiss Asset Reconstruction Company Limited Raj Kumar Bansal have approached the Bombay High Court seeking quashing of the FIR registered against them for allegedly abetting suicide of renowned Indian art director Nitin Desai.

Desai was found hanging at his ND Studio located in Karjat on August 2. It was suspected to have died by suicide and police had initially registered an Accidental Death Record (ADR). An autopsy report confirmed the death by hanging. Subsequently, his wife Naina Desai, registered an FIR against the company.

Desai's Wife Lodged FIR In Abetment To Suicide Case

On August 4, Desai’s wife, Naina, approached the Khalapur police station to register an FIR into Desai’s death. Following this, an abetment to suicide case was registered against Shah and Bansal. FIR was also registered against an interim resolution professional Jitendra Kothari and two others under Sections 306, 34 of the Indian Penal Code (IPC).

Desai left behind a series of voice notes detailing the circumstances that led to his death.

Senior advocate Amit Desai mentioned the pleas before a division bench of Nitin Sambre and RN Laddha seeking an urgent hearing. Desai said that the Shah and Bansal merely followed the official procedure for recovery.

Pending hearing in the petitions, the two have sought stay on the investigation and also sought that the police be directed not to take coercive steps against them.

Edelweiss' Statement On Desai's Loans

According to a statement issued by Edelweiss, Desai, the promoter of ND's Art World Pvt Ltd (NDAWPL), had taken loans of Rs150 crore and Rs35 crore in 2016 and 2018, respectively, from ECL Finance Ltd, a Non-Banking Financial Company, promoted by the Edelweiss Group.

The loans were primarily for financing a theme park and for repaying existing debt, besides general corporate purposes and working capital needs. “We emphasise that NDAWPL was disbursed financial assistance at prevailing market rates. It had encountered financial difficulties in 2019 and defaulted. Various attempts to improve the financial condition of the company did not bear fruit,” the statement read.

The loans were then assigned to Asset Reconstruction Company Pvt. Ltd. (CFM) which had initiated various legal actions. Edelweiss ARC (EARC) acquired a portfolio of assets from CFM under an auction process which included NDAWPL and said it "merely continued with legal actions that were initiated earlier", the statement added.

It further said: “The company was eventually admitted under IBC by NCLT Mumbai on 25 July. Desai's appeal against the NCLT order was dismissed by the honourable appellate tribunal (NCLAT) on 1 August, and he took his life the following morning.”

A second statement issued by Edelweiss on August 6 said that recoveries on NPA accounts is not just a right of creditor but also an obligation. “We would like to state that ECLFL and EARC have acted fully in accordance with the letter and spirit of law and the regulatory framework established by the RBI which prescribes that pursuing recoveries on NPA accounts is not just a right of creditor but also an obligation. The interest rate charged by ECLFL was as per prevailing market rates; legal processes for recovery are elaborately established under RBI and IBC guidelines and were duly followed by EARC. At no time was there any undue pressure being put on the borrower for recovery,” the statement read.