Bankruptcy court grants RP's request for immunity due to 'unintentional delay' in ND's Art World resolution process

MUMBAI: The bankruptcy court allows ND’s Art World’s resolution professional’s (RP) application to grant him immunity from any potential action for ‘unintentional delay’ in being able to take necessary steps as required to be performed under the Code (IBC) during the Corporate Insolvency Resolution Process (CIRP) of the company.

Mumbai-based ND’s Art World was promoted by celebrated art director Nitin Desai, who allegedly committed suicide after the company was admitted under the CIRP by the National Company Law Tribunal.

Thereafter, an FIR was filed against the senior officials of Edelweiss Asset Reconstruction Company Ltd and Edelweiss Group along with the company’s interim resolution professional.

Subsequently, the company’s IRP Jitender Kothari, through his lawyer Nausher Kohli approached the tribunal to seek immunity against any action by the lenders or the disciplinary committee of the Insolvency and Bankruptcy Board of India (IBBI) for any ‘unintentional delay’ in the matter.
The tribunal, in its order of August 28 observed that a police case for abetment of suicide under IPC came to be registered in this matter consequent upon suicide by one of the suspended directors of the corporate debtor on the ground that the initiation of CIRP proceedings caused him to commit suicide.

“Due to this, there seems to be an atmosphere of outrage in the area nearby the offices of the corporate debtor and the same are also under the control of Police Authorities for investigation purposes,” observed the division bench of Justice Virendra Singh Bisht and a technical member Prabhat Kumar. “We consider that the facts brought to our notice can be taken on record to safeguard the office of the resolution professional, and in particular, the likelihood of any proceeding against him for negligence in the discharge of his duties under the Code in relation to CIRP process.” On July 25, the NCLT’s Mumbai bench appointed Kothari as the IRP after ordering the initiation of CIRP against ND’s Art World over its Rs 252 crore debt following two loans totalling Rs 181 crore.Desai’s wife had, following his death allegedly by suicide on August 2, lodged a first information report (FIR) on August 4 with the Khalapur police station invoking the offence of abetment of suicide.

The FIR names Raj Kumar Bansal, the managing director and chief executive officer (CEO) of Edelweiss ARC Ltd. and Edelweiss Group’s chairperson Rashesh Shah along with others.