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The National Company Law Appellate Tribunal (NCLAT) on Wednesday directed Vikram Bakshi, former Indian joint-venture partner of McDonald’s India, and the American Burger Chain to refrain from implementing their out-of-court settlement until further orders.
It also wanted Bakshi to not leave the country without the tribunal or the Debt Recovery Tribunal’s (DRT) permission.
On Wednesday, a two-member NCLAT Bench headed by Chairperson SJ Mukhopadhaya said that the settlement reached between McDonald’s and Bakshi is “prima facie” in violation of the interim order of DRT and “would not be given effect to.” The bench also said that the appeals will now be heard “on merit.” It will now review the settlement between Bakshi and the US-based burger chain.
“We are of the view that parties (Bakshi and McDonald’s) should not implement such agreement nor leave the country without intimating DRT or this Tribunal,” the two member NCLAT bench added.
In its last hearing in August, NCLAT had directed both Bakshi and HUDCO to settle the matter, failing which “the appeals may be heard on merit.” It also said that it is desirable that HUDCO takes steps to settle the matter with Bakshi instead of prolonging the litigation before any forum.
Following a bitter legal feud, Bakshi and McDonald’s had earlier this year informed NCLAT that they had reached an out-of-court settlement, under which the latter acquired the former’s 50 per cent stake in their joint venture, Connaught Plaza Restaurants Pvt Ltd (CPRL), which runs outlets in the North and the East.
When contacted, Bakshi told BusinessLine , “We have not yet seen the order. Once it is available my legal team shall review it and thereafter we shall take a considered decision.”
This new direction comes at a time when the American burger chain McDonald’s and Bakshi are seeking acceptance of the terms of their settlement and vacation of previous orders by NCLAT.
However, in May, state-owned Housing and Urban Development Corporation had filed an intervention petition opposing the settlement between the two parties. It is seeking dues of about Rs 195 crore from Bakshi in relation to a loan granted to his hospitality venture Ascot Hotels & Resorts.
HUDCO had also stated that an order by Debt Recovery Tribunal prevents Bakshi from transferring his shares in CPRL.
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