NCLAT gives final chance to Vikram Bakshi to settle dispute with HUDCO before McDonald’s Settlement

The National Company Law Appellate Tribunal (NCLAT) today gave a final opportunity to McDonald India’s estranged partner Vikram Bakshi to settle its dispute with Housing and Urban Development Corporation (HUDCO) before the settlement between McDonald’s and Bakshi could get its nod..“We give last chance to Vikram Bakshi to settle matter with HUDCO. We allow four weeks’ time to settle the matter.” the Appellate Tribunal ordered..The Appellate Tribunal has further directed Bakshi to place an affidavit indicating the development in these four weeks..The order was passed by a two-member Bench of the Appellate Tribunal headed by Chairperson Justice SJ Mukhopadhyay..While McDonald’s is seeking to withdraw its appeal before the Appellate Tribunal against the reinstatement of Bakshi as the Managing Director of their joint venture Connaught Plaza Restaurant Ltd in light of the settlement between them, HUDCO seeks a bite of Rs. 195 crore from the settlement amount payable to Vikram Bakshi by McDonald’s..Reiterating its earlier stand, the Bench observed that it would not allow McDonald’s to withdraw its appeal against Vikram Bakshi if it is found to be in contravention of an order passed by any court of law..“We cannot allow the appeal to be withdrawn. Either you grease both the palms..and you mean both the parties (McDonald’s and Vikram Bakshi)….There are other hands also. Shake hands with those“, Justice Mukhopadhyay remarked soon after the hearing began..In its application filed through advocates Rohit Sharma, Atul Agarwal, Rounak Nayak and Anshul Chowdhary, HUDCO has contended that the settlement is in the teeth of an order passed by the Debts Recovery Tribunal (DRT) on February 2, 2016. This order had restrained Bakshi from transferring or creating any third-party interests in the shares held by him in CPRL..The dispute before the DRT pertained to the recovery of a loan amount of nearly Rs 63 crore extended by HUDCO to Bakshi’s Ascot Hotels and Resorts Pvt Ltd in 2006. Bakshi and his wife Madhurima Bakshi executed personal guarantees for repayment of the loan, apart from various other securities in the loan agreement..After the loan account was declared as a Non-Performing Asset, HUDCO moved the DRT in 2011. In 2013, HUDCO preferred an application to attach the shares of Bakshi in CPRL. Pursuant to the application, Bakshi undertook to not transfer his stake in CPRL. The same was recorded by the DRT in its order..Subsequently, the DRT decreed in favour of HUDCO in 2015. It held that HUDCO was entitled to recover a sum of Rs 68,62,91,032 with simple interest @ 14% per annum from the date of the order until the recovery from Ascot Hotels and Resorts, Vikram Bakshi, Madhurima Bakshi and Vikram Bakshi & Co Pvt Ltd, jointly and severally..It was during the execution proceedings that the DRT restrained Bakshi from transferring his 3100 shares in CPRL..As soon as the settlement deal was announced, HUDCO approached the DRT..The DRT, on May 9, not only directed Vikram Bakshi and McDonald’s India to appear before it but also asked McDonald’s to deposit the proceeds of the settlement with it..HUDCO thus claims that any amount which is payable to Bakshi must be deposited with the DRT by McDonald’s for settlement of dues..Counsel appearing for Vikram Bakshi, Senior Advocate Amit Sibal with Shardul Amarchand Mangaldas Partner Tejas Karia claimed that Bakshi has already paid most of the amount to HUDCO..Disputing HUDCO’s claim of Rs 195 crore for being inflated, Sibal stated that Baskhi has already deposited Rs 66 crore with the DRT against the original dispersed amount of Rs 57 crore..“We have deposited Rs 10 crore today in the morning“, he further stated..Solicitor General Tushar Mehta who appears for HUDCO, however, denied having reached any settlement in the matter..Mehta stated that HUDCO’s claim of 195 crores excluded the sum of Rs 66 crore already paid by Bakshi..In view of the conflicting claims by HUDCO and Bakshi, the Appellate Tribunal directed Bakshi to sit across the table with HUDCO and settle the dispute..McDonald’s was represented by Senior Advocate Sudipto Sarkar..The matter would be heard next on July 10..Bar & Bench is available on WhatsApp. For real-time updates on stories, click here to subscribe to our WhatsApp.