NCLAT seeks details of settlement with McDonald's from Vikram Bakshi

Appellate tribunal also asks Bakshi to indicate how much he can pay Hudco, which is seeking Rs 190 crore

The National Company Law Appellate Tribunal (NCLAT) on Wednesday directed Vikram Bakshi and his wife Madhurima Bakshi to file on an affidavit detailing the proceeds obtained by them from the sale of their stake in Connaught Plaza Restaurants Limited (CPRL) to McDonalds India Private Limited.

 

A two-member bench led by Chairperson Justice S J Mukhopadhaya also directed Bakshi to mention in the same affidavit, the total amount sought to be recovered from him by the Debt Recovery Tribunal (DRT) decree and as to how much amount he had already deposited.

 

Bakshi, the NCLAT said, should also mention how much amount he intends to pay to settle his dispute with Housing and Development Corporation (Hudco).

 

Hudco had approached the NCLAT seeking Rs 190 crore from Bakshi before his settlement with McDonalds India was given final approval. The money, Hudco had claimed, was owed to them in relation to an unpaid loan of 2013.

 

Bakshi-owned and privately held Ascot Hotels & Resorts reportedly owes around Rs 100 crore to Hudco on unpaid loans, among other penalty charges since 2013. Of this, around Rs 80 crore was borrowed by Ascot from Hudco in 2007-08 to open Savoy Club, a premium corporate club in Noida.

 

Though Bakshi has offered to pay Rs 137 crore to settle the dues of Hudco, the same has been rejected by the central government agency. Hudco wants its entire debt to be cleared before the settlement is allowed by the NCLAT, it said on Wednesday.

 

In 2013, Hudco had filed a criminal case under the Negotiable Instruments Act against Bakshi in a 2012 cheque bounce case and said its dues owed to Bakshi had crossed Rs 75 crore. Hudco had also filed cases against Bakshi under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.

 

The NCLAT was on Wednesday also hearing a plea moved by McDonalds India, in which it sought to withdraw an appeal by which it had opposed the appointment of Bakshi as the Managing Director of the joint venture it had with the latter’s restaurant CPRL.

 

Bakshi and McDonald's India had, on May 7, informed the NCLAT that the two parties were working on an out-of-court- settlement to settle their six-year-old dispute. The NCLAT had then allowed both parties to go ahead with settlement talks and keep the appellate tribunal apprised of the developments in talks. According to the terms of the settlement, McDonald’s India has bought over the 50 per cent stake held by Bakshi and his wife in CPRL for an undisclosed amount.

 

In 1995, Bakshi had inked a deal with McDonald’s to open outlets in India. The partnership, a 50:50 joint venture between McDonald’s India and Bakshi’s CPRL, was inked in a way such that Bakshi’s CPRL would be responsible for opening and managing McDonald's outlets in north and east India.

 

McDonald’s India ousted Bakshi from the post of Managing Director (MD) of CPRL in 2013. Following the ouster, McDonalds India had offered Bakshi Rs 120 crore for the 50 per cent stake held by him and his wife in CPRL.

 

The deal fell through as Bakshi sought Rs 1,800 crore. In July 2017, the National Company Law Tribunal restored Bakshi to the post of MD in CPRL.

 

In June 2017, McDonald’s India terminated the franchise deal of 169 outlets managed by CPRL citing non-payment of royalties and asked suppliers to stop dealing with the latter. CPRL suppliers included Vista Processed Foods, Schreiber Dynamix Dairies, Cremica Foods Industries and Amrit Foods. Subsequently, McDonald’s India also challenged the use of the McDonald’s trademark by CPRL.