The National Company Law Appellate Tribunal on Wednesday stated that it would “review” the out-of-court settlement reached between US fast food giant McDonald’s and its estranged Indian partner Vikram Bakshi.
The appellate tribunal said the settlement reached between McDonald’s and Bakshi was “prima facie” a violation of the Debt Recovery Tribunal order and it “would not be given effect to”.
A two-member NCLAT bench headed by chairperson Justice S.J. Mukhopadhaya also asked Bakshi not to leave the country without its permission.
“We find that the parties (Bakshi and McDonald’s) have reached an agreement ... Which is prima facie against the interim order of the DRT. We are of the view that the parties should not implement such an agreement nor leave the country without informing the DRT or this Tribunal,” said the NCLAT.
The details of the pact, including financial terms, were not disclosed. After they reached the agreement both Bakshi and McDonald’s had approached the NCLAT to withdraw cases filed against each other. However, Hudco opposed the move.
State-owned Housing and Urban Development Corporation (Hudco) had filed an intervention petition opposing the out-of-court settlement, claiming that Bakshi and related entities owed it about Rs 195 crore.
Hudco also pointed to an order by the DRT that prevented Bakshi from selling any shares in CPRL.
The NCLAT had asked Bakshi to settle the dispute with Hudco, which is seeking dues from Bakshi in relation to a loan granted to his hospitality venture, Ascot Hotels & Resorts.