The Delhi Bench of Debt Recovery Tribunal (DRT) has asked Connaught Plaza Restaurants’ (CPRL) Managing Director Vikram Bakshi (pictured) and McDonald’s India to appear before it and deposit the proceeds of their proposed settlement.
The DRT has also asked Bakshi not to transfer nearly 3,100 shares of CPRL and asked him to share details of the rates of the shares as on date.
CPRL and McDonald’s have been asked to appear after Housing and Development Corporation (Hudco) had moved an application alleging that Bakshi owed nearly Rs 195 crore to them. Hudco had in 2006 given a loan of Rs 62.38 crore to Bakshi’s private venture, Ascot Hotels and Resorts, for a commercial project in Noida for which he had given a guarantee. The loan however, turned non-performing asset (NPA) in 2011, following which Hudco moved the DRT.
In August 2015, the DRT ruled in favour of Hudco and asked it to recover the amount along with 14 per cent interest from Ascot Hotels, Vikram Bakshi, Madhurima Bakshi and Vikram Bakshi & Co. Bakshi and other respondents were also asked to disclose the details of their movable and immovable assets.
After Bakshi and other respondents failed to do so, Hudco moved DRT seeking attachment of their bank accounts and the 3,100 shares held by Bakshi in CPRL. The plea was allowed by DRT.
Following the news of settlement between Bakshi and McDonald’s India, Hudco moved an intervention application in the National Company Law Appellate Tribunal (NCLAT), seeking that the deal not be allowed to go ahead until its Rs 195 crore debts were paid off.
In its plea before the NCLAT, Hudco claimed that after the loans given to Bakshi’s Ascot Hotels turned NPA, they tried to recover the monies by selling off the land against it the latter was given loans. However, the auction failed to find any buyers even after three attempts.
The NCLAT, while hearing Hudco’s plea, had said that it could not allow the McDonalds India Private Limited-Vikram Bakshi out-of-court settlement deal to go ahead until Hudco's intervention application seeking Rs 195 crore dues from Bakshi were heard. Though the counsels for McDonalds India and Bakshi sought that since the case pending in DRT had nothing to do with the deal between them, the settlement should be allowed to go on as per schedule. The plea, however, was turned down by NCLAT, which suggested that Bakshi settle his dues with Hudco.
“We cannot annul a tribunal’s order. If the settlement is contrary to law, then we cannot allow it. You settle it with Hudco,” the two-member Bench said.
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. 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, McDonald’s had offered Bakshi Rs 120 crore for the 50 per cent stake held by him and his wife in CPRL. The deal had then fallen through as Bakshi had sought Rs 1,800 crore. In July 2017, the National Company Law Tribunal restored Bakshi to the post of MD in CPRL.