The Supreme Court dismissed a plea by Naina Desai, wife of late film art director Nitin Desai, against the order of the NCLAT upholding the NCLT order initiating corporate insolvency proceedings against the late art director’s company.
A division bench of Justices Sanjiv Khanna and SVN Bhatti dismissed Naina Desai’s Special Leave Petition observing, “We do not find any good ground and reason to interfere with the impugned judgment and hence, the appeal is dismissed.”
Naina Desai had approached the apex court challenging the order of the August 1 order of the National Company Law Appellate Tribunal (NCLAT) by which it upheld the order of the National Company Law Tribunal (NCLT). The NCLT, on July 25, admitted the insolvency proceedings against Desai’s company.
Death by suicide
Desai was found hanging at his ND Studio located in Karjat on August 2. He 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. Desai left behind a series of voice notes detailing the circumstances that led to his death.
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 Edelweiss Financial Services (EFS) chairman Rashesh Shah; Edelweiss Asset Reconstruction Company (EARC) Ltd managing director and CEO Raj Kumar Bansal and others. FIR was also registered against an interim resolution professional Jitendra Kothari and two others under Sections 306, 34 of the Indian Penal Code (IPC).
Shah and Bansal have approached the Bombay High Court seeking quashing of the FIR against them contending that they met him only once after his loan was approved and had limited dealings with his loan account. However, the high court had not granted any relief to them.
Desai, the promoter of ND's Art World Pvt Ltd (NDAWPL), had taken loans of ₹150 crore and ₹35 crore in 2016 and 2018, respectively, from ECL Finance Ltd, a Non-Banking Financial Company, promoted by the Edelweiss Group.
Financial difficulties
The company encountered financial difficulties in 2019 and defaulted. 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 continued with legal actions that were initiated earlier.
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.
