NCLAT allows settlement between McDonald's and its ex-partner Vikram Bakshi; rejects HUDCO opposition

The National Company Law Appellate Tribunal (NCLAT) on Tuesday allowed the settlement between fast food giant McDonald’s India and its former partner Vikram Bakshi regarding their joint-venture, Connaught Plaza Restaurants Limited (CPRL)..An NCLAT Bench of Chairperson Justice Ashok Bhushan and Dr Alok Srivastava (Member Technical) rejected the application by the Housing and Urban Development Corporation (HUDCO) opposing the settlement..CRPL is now fully owned by McDonald’s after Bakshi transferred his shares to it..HUDCO had filed an intervention application claiming ₹195 crore in dues from Bakshi and demanded that any amount which is payable to Bakshi must be deposited with the Debts Recovery Tribunal (DRT) by McDonald’s.The dispute between HUDCO, Bakshi and McDonald’s pertained to the recovery of a loan amount of nearly ₹63 crore released by HUDCO to Bakshi’s Ascot Hotels and Resorts in 2006. Bakshi and his wife Madhurima executed personal guarantees for repayment of the loan, apart from various other securities in the loan agreement..However, the Tribunal today held that even though HUDCO is entitled to pursue its recovery certificate, the same cannot be a ground to reject the settlement arrived at between Bakshi and McDonald’s.“The fact that HUDCO is entitled to pursue its Recovery Certificate No.330/2015 cannot be a ground to reject I.A. No. 1540 of 2019 which has been filed by both the parties...We, thus, are satisfied that no grounds have been made in I.A. No. 1600 of 2019 (HUDCO’s application) to reject I.A. No. 1540 of 2019 filed by the McDonald’s India Pvt. Ltd. & Ors. and Vikram Bakshi & Ors. In result, I.A. No. 1540 of 2019 is allowed,” the NCLAT ordered..Senior Advocate Arun Kathpalia along with Advocates Niti Dixit, Abhishek Tewari, Raunaq B Mathur and Ishita Mathur appeared for McDonald’s and others. Advocates Tejas Karia, Gauhar Mirza, Prakhar Deep and Nishant Doshi appeared for Bakshi and others.Advocate Rohit Sharma appeared for HUDCO. .NCLAT gives final chance to Vikram Bakshi to settle dispute with HUDCO before McDonald’s Settlement.[Read Order]