  We present optical spectroscopic and milli-arcsecond scale radio continuum
observations of the quasar M1540-1453 ($z_{em}$ = 2.104$\pm$0.002) that shows
associated HI 21-cm absorption at $z_{abs}$ = 2.1139. At sub-kpc scales, the
powerful radio source with 1.4 GHz luminosity of $5.9\times10^{27}$ WHz$^{-1}$
shows Fanaroff-Riley (FR) class I morphology caused by the interaction with
dense gas within 70 pc from the AGN. Interestingly, while there are indications
for the presence of absorption from low-ionization species like FeII, SiII and
SiIII in the optical spectrum, the expected strong damped Ly$\alpha$ absorption
is not detected at the redshift of the HI 21-cm absorber. In comparison to
typical high-$z$ quasars, the Ly$\alpha$ emission line is much narrower. The
`ghostly' nature of the HI Ly$\alpha$ absorber partially covering the broad
line region of extent 0.05 pc and the detection of widespread HI 21-cm
absorption covering the diffuse radio source (extent $>$425 pc) imply the
presence of a large clumpy HI halo -- which may have been blown by the jet-ISM
interaction. Further observations are needed to confirm the `ghostly' nature of
the Ly$\alpha$ absorber, and obtain a better understanding of the role played
by the jet-ISM interaction in shaping the radio morphology of this powerful
AGN. The study showcases how joint radio and optical analysis can shed light on
gaseous environment and origin of radio morphology in AGN at high redshifts,
when these are still the assembly sites of giant galaxies.
