McDonald’s Case: NCLAT Gives Four Weeks To Vikram Bakshi To Settle Hudco Dispute
Hudco is claiming dues of Rs 195 crore from Vikram Bakshi, the former partner of McDonald’s India.
The National Company Law Appellate Tribunal on Tuesday gave four weeks' time to Vikram Bakshi to settle his dispute with state-owned Housing and Urban Development Corp. Ltd. which is claiming dues of Rs 195 crore from the former McDonald's partner.
A two-member NCLAT bench, headed by Chairman Justice SJ Mukhopadhaya said this would be the "last chance" to Bakshi to settle the dispute with Hudco. "We allow four weeks time to Vikram Bakshi to settle the matter with Hudco," said the NCLAT. The tribunal wants Bakshi to file a report on the development by filing an affidavit in the matter before it.
Earlier in May, McDonald's Corp. announced it has reached an out-of-court settlement with Bakshi, buying out his stake in their joint venture Connaught Plaza Restaurants Pvt. Ltd., which operates U.S.-based fast-food chain's outlets in northern and eastern India.
Both McDonald's and Bakshi had moved to withdraw cases filed against each other before the NCLAT to settle their dispute, which was then opposed by Hudco claiming dues of Rs 195 crore on Bakshi.
During the proceedings, counsel Amit Sibal representing Bakshi informed the NCLAT that he has already paid Rs 66 crore to Hudco and land was also in their possession.
"We have already paid Rs 66 crore, and are ready to pay another Rs 70 crore," Sibal said, adding that "4.65 acres of unencumbered property worth Rs 300 crore is already in the possession of Hudco."
Sibal further submitted that Bakshi has deposited Rs 10 crore before Debt Recovery Tribunal on Tuesday. He contended that the DRT order was no more a hindrance as he has already paid as ordered, and Hudco was raising an issue with respect to the debt recovery court order.
"There cannot be a settlement in contravention of any judicial order”, the NCLAT said, referring to the order passed by the Debt Recovery Tribunal in Hudco's case against Bakshi.
On May 9, the presiding officer of DRT Delhi had directed Bakshi not to transfer his 3,100 attached shares of Connaught Plaza Restaurant Ltd.
Hudco had moved NCLAT, seeking a stay on the settlement till Bakshi makes the payment. The appellate tribunal also instructed Bakshi to explore the possibility of a settlement with Hudco.
Bakshi had given guarantee to Hudco against a loan of Rs 62.38 crore to Ascot Hotels and Resorts for a commercial project in Noida, Uttar Pradesh, in 2006. Ascot Hotels and Resorts defaulted and was declared a non-performing asset in August 2011.
To recover the loan, Hudco moved the DRT in 2013 and requested to attach 3,100 shares (having a value of Rs 1,000 each) in CPRL, which were in the name of Bakshi.
On this, DRT on Feb. 2, 2016 issued "interim directions restraining Vikram Bakshi from alienating or transferring or creating any third party interest in the 3,100 shares of CPRL or any other quantity in the name of Vikram Bakshi till further orders.
When Hudco came to know about the settlement between Bakshi and McDoanld's, it moved an intervention application before the NCLAT, where both have filed petition against each other.
"The settlement so arrived at between the appellant (McDonald's India) and respondent (Bakshi) with regards to transfer of shares to the appellant without settling the dues of the applicant/intervenor (Hudco) will cause grave and irreparable losses to the public exchequer," said Hudco, adding that it can not proceed without its approval.