Nitin Desai started delaying loan repayment from 2018 end: Edelweiss to HC

Senior Edelweiss officials, accused of abetting the suicide of renowned art director Nitin Desai on Friday submitted to the Bombay high court that he had started delaying on his loan repayment schedules from the end of 2018.

Senior counsel Amit Desai, appearing for Edelweiss Financial Services chairman Rashesh Shah, Edelweiss ARC MD and CEO Raj Kumar Bansal and two other company officials, said a total loan of Rs 181 crore was given to Nitin Desai.

The senior counsel said there was no mens rea (intention) or instigation on the part of the accused to cause abetment of Nitin Desai's alleged suicide.

A division bench of Justices Nitin Sambre and R N Laddha was hearing petitions filed by the officials and Jitender Kothari, who was appointed by the National Company Law Tribunal (NCLT) as an interim resolution professional, seeking for the FIR to be quashed.

The petitioners had sought interim order of protection from any coercive action and for the probe to be stayed in the case pending the hearing of their pleas.

The bench after hearing brief arguments by senior counsel Desai said it would continue hearing the matter on Monday (August 21).

Amit Desai then sought the court to grant interim protection from any coercive action to the petitioners.

The bench, however, refused and said, “What will happen in two days? We have kept the matter on Monday for hearing.”

Amit Desai submitted to the court that in 2016, Nitin Desai had taken a loan of Rs 150 crore from Edelweiss' company ECLF for general corporate purposes.

“Part of the money was used to pay earlier loans. The deceased (Desai) and his company used to take loans earlier too,” the counsel said.

He added that in 2018, an additional loan of Rs 38 crore was sought of which Rs 31 crore was sanctioned and disbursed.

Amit Desai claimed that from the end of 2018, the art director started delaying the repayment.

The bench then sought to know if the 2016 loan was repaid before the additional loan amount was disbursed in 2018.

“Between 2016 and 2018 was the repayment timely?” Justice Sambre asked.

The senior counsel said between 2016 and 2018, the repayment was done on schedule.

“From the end of 2018, there was a delay in the repayment schedule. Let me not call it default. There were delays,” Amit Desai said.

Referring to earlier judgments passed by the high court while quashing abetment of suicide cases, Amit Desai said abetment involves constant instigation and mens rea which are absent in the present case.

“If we have to protect the importance of the financial capital of the country then the use of criminal action should also be such that we don't lose the standing of being the financial capital,” he said.

Nitin Desai (57), who had worked for acclaimed Bollywood films like Lagaan and Jodhaa Akbar, was found hanging at his studio at Karjat in Maharashtra's Raigad district on August 2.

On August 4, his wife approached the Khalapur police station to register an FIR into his death.

Following this, an abetment of suicide case was registered against Shah, Bansal, Kothari and two others.

The FIR was also registered against Kothari and two others under Indian Penal Code sections 306 (abetment of suicide) and 34 (common intention).

Nitin Desai's company ND's Art World Pvt Ltd had defaulted on a Rs 252 crore loan repayment to creditors and the Mumbai bench of the NCLT had initiated insolvency proceedings against it.

Edelweiss ARC, in a statement issued at the time, had denied that any undue pressure was put on the art director for loan recovery.

The Raigad police, who are probing into Desai's death, have found 11 audio clips in a voice recorder at the art director's office.

In one of the voice notes found after his alleged suicide, Desai criticised a financial services firm to which his company owed money, the police said.

Desai also purportedly said he had walked a long road, and could not go any further.

In one of these clips or voice notes, he was heard saying his company could not come out of the financial crisis it was facing because of the procedure adopted by the financial services firm, the police said.

Nitin Desai's death was also discussed in the Maharashtra assembly, where Deputy Chief Minister Devendra Fadnavis said a probe would inquire into the “role of creditors and whether he (was under mental stress and being pressured”.