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The Supreme Court rejects Naina Desai's appeal against insolvency proceedings, following Nitin Desai's tragic demise.
Keywords -
• Supreme Court
• Nitin Desai
• NCLAT
• Insolvency Proceedings
• Bollywood Art Director
In a recent development, the Supreme Court has delivered a verdict dismissing the appeal of Naina Desai, the widow of the late renowned Bollywood art director, Nitin Desai. This decision comes in response to an order issued by the National Company Law Appellate Tribunal (NCLAT), which had initially rejected Nitin Desai's appeal against the National Company Law Tribunal's (NCLT) order to initiate insolvency proceedings against his company.
The bench of Justices Sanjiv Khanna and SVN Bhatti, in their judgment dated September 11, cited a lack of substantial grounds for interference with the impugned judgment, leading to the dismissal of the appeal.
The chain of events began when, on August 1, the NCLAT dismissed Nitin Desai's appeal against the June 25 NCLT order that had triggered corporate insolvency proceedings and appointed an Interim Resolution Professional (IRP) under the Insolvency and Bankruptcy Code.
Tragically, Nitin Desai, known for creating awe-inspiring sets for blockbuster films like 'Hum Dil De Chuke Sanam' and 'Lagaan,' was found deceased on August 2 at his studio in Maharashtra's Raigad district, near Mumbai.
The Mumbai bench of the National Company Law Tribunal (NCLT) had taken the step of appointing Jitendra Kothari as the IRP and initiating the corporate insolvency resolution process against Nitin Desai's firm, ND's Art World Pvt Ltd.
The root cause of these proceedings can be traced back to Nitin Desai's company's default on a substantial Rs 252 crore loan repayment to its creditors. The company had initially borrowed Rs 185 crore through two loans from ECL Finance in 2016 and 2018. However, repayment issues began to surface in January 2020, ultimately leading to the outstanding dues reaching a staggering Rs 252 crore, including accrued interest, by June 2022.
This decision by the Supreme Court marks a significant development in the ongoing legal proceedings surrounding Nitin Desai's company and the financial complexities it faced.
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