Bakshi case: NCLT issues show-cause notice to McDonald's Corp

The National Company Law Tribunal (NCLT) today issued show-cause notice to fast food major McDonald's Corporation and its Indian arm over the contempt plea filed by their estranged Indian partner Vikram Bakshi.

Besides, the tribunal dismissed another plea by Bakshi challenging termination of the franchise license of 169 outlets by McDonald's, run by their 50:50 joint venture -- Connaught Plaza Restaurant Ltd (CPRL).

Bakshi had filed a contempt petition alleging that by terminating the license the US-based food giant has violated the NCLT order dated July 13 which reinstated him as the Managing Director of CPRL and also refrained McDonald's Corporation to interfere in the functioning of CPRL.

McDonald's and its Indian subsidiary contended that as they have already filed an appeal against NCLT's order before the National Company Law Appellate Tribunal (NCLAT), it should not be admitted at this stage.

Not consenting with it, NCLT bench headed by Chairman Justice M M Kumar said: "It has been argued that on account of filing an appeal before the NCLAT, notice in the present application for contempt may not be issued. However, we are unable to accept the submission".

The tribunal further directed McDonald's, MIPL and other respondents to reply the "notice to show cause" by September 20.

On the other hand, the tribunal did not admit Bakshi's plea over termination of the operating license.

NCLT said it was "of view that this application at this stage would not be maintainable because both... have filed their respective appeals which are pending before the NCLAT".

Moreover, the tribunal also observed that Justice G S Singhvi, who has been appointed as administrator on the board of CPRL by it, has granted permission to Bakshi to approach the NCLAT to seek relief.

"Both the appeals are pending consideration before NCLAT and propriety demands that any such application for interim relief be preferred before NCLAT," the tribunal said, while dismissing Bakshi's plea over termination of license with the JV firm.

However, the NCLT bench, which also consisted technical member S K Mohapatra, also said:" We make it clear that we have not considered the issues on merit and this order shall not be construed to have expressed any opinion on the controversy".

Bakshi has been at loggerheads with the fast food chain over the management of CPRL after he was ousted from the post of MD of the McDonald's franchisee in August 2013.

McDonald's India had asked CPRL not to use its brand system, trademark, designs and its associated intellectual property, among others, within 15 days of the termination notice which gets over on September 6.

Bakshi had moved the NCLT following termination of license by McDonald's India Pvt Ltd (MIPL).

In June, 43 outlets of the fast food chain were closed in the capital following expiry of eating house licenses.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)