NEW DELHI :
The National Company Law Appellate Tribunal (NCLAT) on Wednesday said it will review the settlement between fast food major McDonald’s and its Indian partner Vikram Bakshi over the sale of his shares in Connaught Plaza Restaurants Ltd (CPRL).
NCLAT said the settlement reached between McDonald’s and Bakshi was prima facie in violation of a Debt Recovery Tribunal order and it “would not be given effect to".
A two-member NCLAT bench headed by Chairperson Justice S.J. Mukhopadhaya also asked Bakshi not to leave the country without its permission.
“We find that parties (Bakshi and McDonald’s) have reached agreement...which is prima facie against the interim order of DRT. We are of the view that parties should not implement such agreement nor leave the country without intimating DRT or this tribunal," NCLAT said.
During the last hearing, NCLAT had given Bakshi a last and final chance to settle the issue with Housing and Urban Development Corp. Ltd (Hudco), which is claiming ₹194 crore in dues. NCLAT had earlier allowed the intervention application filed by Hudco opposing the deal.
CPRL, which is now wholly owned by McDonald’s, after its estranged partner Bakshi transferred his share in the joint venture to the US-based firm, had temporarily shut down its 160 stores.
CPRL had on 20 May said that it has reopened 13 restaurants in Delhi and its suburbs.
On 6 May, estranged partners McDonald’s and Bakshi had told NCLAT that they were working towards an out-of-court settlement to end their dispute.
McDonalds’s announced an out-of-court settlement with the fast food chain in May, agreeing to buy Bakshi from their joint venture that operated outlets of the US firm in north and east India.
The details of the pact, including financial terms, were not disclosed.
Following that both Bakshi and McDonald’s had approached the NCLAT to withdraw cases filed against each other and it was opposed by Hudco.
In its last hearing in August, the NCLAT had given Bakshi last chance to settle the dispute with Hudco.
“We have yet to see the order. Once it is available my legal team shall review it and thereafter we shall take a considered decision," akshi said in response to a query from Mint.
Bakshi who was the burger chain’s local parter for north and east India starting the mid-90s was ousted as its managing director in 2013, starting a six-year-long legal dispute between the two parties. Following the settlement, McDonald’s has taken full control of operations at CPRL. However, on 16 May, Hudco moved NCLAT opposing the settlement between the two till its dues are recovered from Bakshi. Hudco had given a loan of ₹62.38 crore to Ascot Hotels and Resorts in the mid 2000s. However, the latter defaulted on loan repayment. In 2013, Hudco moved the Debt Recovery Tribunal to recover its dues.
Suneera Tandon of Mint contributed to this story.