News

July 11, 2019

NCLAT Urges HUDCO To Drop Its Opposition To McDonald’s-Vikram Bakshi Deal And Recover Remaining Sum From DRT


[ By Bobby Anthony ]

McDonald's

The National Company Law Appellate Tribunal (NCLAT) has advised the counsel for HUDCO to accept the Rs 137 crore settlement offer by Vikram Bakshi for now and recover the remaining amount if needed through Debt Recovery Tribunal (DRT) proceedings.

The tribunal has indicated that a Rs 10-crore deposit by Bakshi towards claims by HUDCO may be enough to satisfy DRT to lift its stay on selling his stake in Connaught Plaza Restaurant Ltd (CPRL).

It may be recalled that the DRT had directed Bakshi to pay Rs 195 crore to HUDCO in the matter.

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 had executed personal guarantees for repayment of the loan, apart from various other securities in the loan agreement.

It is HUDCO's case that any amount which is payable to Vikram Bakshi must be deposited with the DRT by McDonald’s for settlement of dues.

Incidentally, Bakshi has sold his stake in CPRL, a joint venture between him and McDonald's India for the burger chain’s operations in north and east India, as part of their dispute settlement.

HUDCO, which proceeded against Bakshi over personal guarantees on loans to his hospitality business Ascot Hotels had intervened, pointing to an order by the Debt Recovery Tribunal (DRT) preventing Bakshi from selling any shares in CPRL.

Earlier, Bakshi’s counsel Amit Sibal had submitted before the NCLAT bench that his client had deposited Rs 10 crore — the entire proceeds from the sale of his shares in CPRL — with DRT and that the amount had already been withdrawn by HUDCO.

Sibal had also stated that Bakshi was set to propose a onetime settlement to HUDCO of Rs 137 crore against the initial disbursement of Rs 62.38 crore to Ascot Hotels.

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