Nitin Desai death case: Edelweiss CEO, Chairman seek protection from Bombay HC

Edelweiss chairperson Rashesh Shah and CEO Raj Kumar Bansal have moved the Bombay High Court, seeking to quash an FIR registered against them for abetment to the suicide of art director Nitin Desai, India Today reported on Tuesday. Desai, who had defaulted on Rs 185 crore loans taken from a subsidiary of Edelweiss, was found dead at his ND Studio in Khalapur Raigad near Karjat on August 2.

Also read: All about Edelweiss' Rashesh Shah, the man whose firm is under scanner for death of art director Nitin Desai

Maharashtra Deputy CM Devendra Fadnavis had said that the role of the lending firm would be probed to know whether he was charged high interest and if he was under mental stress. Edelweiss in a statement on Sunday said that an FIR has been filed against five persons including Chairman Rashesh Shah.  

According to the report, Naina Desai, the wife of Nitin Desai and the complainant in the FIR, has been made a respondent in the two petitions filed by Bansal and Shah. The petitions aim to invoke the extraordinary jurisdiction of the High Court and, as an interim relief, seek no coercive action by the police, the report said, adding that the petitions also seek a stay of the investigation.

Also read: Edelweiss on Nitin Desai's death: 'No undue pressure, interest charged as per prevailing market rates'

Desai's family claims that the loans were taken from Edelweiss between 2016 and 2018, and part of the repayment had been made. The complaint alleged that the lending firm had pressured Desai to recover an outstanding loan and attempted to take over his ND Film World Studio in Karjat due to the loan default.

The FIR was filed against Bansal, Shah, and interim resolution professional (IRP) Jitender Kothari, who was appointed by the National Company Law Tribunal (NCLT) in Mumbai as the IRP after initiating a corporate insolvency resolution process against Desai's company, ND's Art World Pvt Ltd.

The police have so far recorded about 10 statements from witnesses so far and have issued summons to Bansal and Shah to appear before them. However, the two immediately approached the High Court, stating that there could not have been an abetment to suicide when they were merely following the legal process for loan recovery. The petitions are likely to be heard this week.

In its statement, Edelweiss said that there was no wrongdoing of any nature in the recovery of loans. It said loans to Desai were given at prevailing market rates. According to the statement, after Desai's company defaulted on payment, the loans were assigned to CFM Asset Reconstruction Company Pvt Ltd (CFM) "which had initiated various legal actions under due provisions of law".

"Edelweiss ARC (EARC) acquired a portfolio of assets from CFM under auction process which included NDAWPL and merely continued with legal actions that were initiated earlier. The company was eventually admitted under IBC by NCLT Mumbai on July 25, 2023," the statement said, adding that Desai's appeal against the NCLT order was dismissed by the NCLAT on August 1, and he took his life the following morning.

Edelweiss said that it acted "fully in accordance with the letter and spirit of the law" and the regulatory framework established by the RBI. The company further said that the interest rate charged by the company was "as per prevailing market rates".

(With inputs from Vidya)