NCLAT keeps McDonald-Vikram Bakshi settlement agreement on hold

A two-member bench headed by Chairman Justice S J Mukhopadhaya accepted the intervention plea filed by the House Urban Development Corporation (HUDCO) and suggested the parties to settle the issue.

New Delhi:The National Company Law Appellate Tribunal (NCLAT) on Wednesday admitted the intervention plea filed by state-owned HUDCO claiming dues of Rs 195 crore from Vikram Bakshi, the estranged India partner of US-based McDonald's.

A two-member bench headed by Chairman Justice S J Mukhopadhaya accepted the intervention plea filed by the House Urban Development Corporation (HUDCO) and suggested the parties to settle the issue.

"HUDCO intervention is accepted," said the NCLAT.

The bench has listed the matter on May 27 for the next hearing.

Fast food chain McDonald's has reached an out-of-court settlement with Bakshi, buying out Connaught Plaza Restaurants Ltd, which runs the restaurants chain of US-based fast food major in the north and east India, from their joint venture.

HUDCO has filed an intervention application before the NCLAT, seeking its dues from Bakshi, before the deal with McDonald's is over.

During the proceedings, Solicitor General Tushar Mehta, representing HUDCO informed the appellate tribunal that a matter related dues of Rs 195 crore is going at Delhi-based DRT (Debt Recovery Tribunal).

"There can not be a settlement … the matter is still pending there (DRT)... How can they do it," said Mehta adding that Bakshi would first have to clear HUDCO's dues before disposing of his stake in CPRL.

According to him, the DRT has restricted Bakshi from selling or transferring his shares held in CPRL.

However, counsel from Bakshi and McDonald's requested the appellate tribunal to proceed as their settlement was almost close and requested to withdraw their respective petitions filed against each other at NCLAT.

On this, Justice Mukhopadhaya said: "We cannot annul a tribunal's order."

He further said: "If the settlement is contrary to law, then we can not admit it."

"You settle it (with HUDCO)...," said the NCLAT chairman.

During the proceedings, counsel from Bakshi and McDonald's informed about settlement and requested to withdraw the cases.

However, HUDCO opposed the move.

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.

Earlier on May 6, estranged partners McDonald's and Bakshi had informed NCLAT that they were working towards an out-of-court settlement to end their dispute.

On May 9, they announced an out-of-court settlement with the US fast-food chain agreeing to buy Bakshi from their joint venture that operated outlets of the chain in the north and east India.

The details of the pact, including financial terms, were not disclosed.