You are using an older browser version. Please use a supported version for the best MSN experience.

NCLT reserves order on Vikram Bakshi plea against McDonald’s ending franchise pact

LiveMint logoLiveMint 04-09-2017 Harveen Ahluwalia

New Delhi: The National Company Law Tribunal (NCLT) on Monday reserved its order on a plea by Vikram Bakshi, the estranged partner of McDonald’s India Pvt. Ltd, against the termination of their franchise pact by the fast-food chain.

The verdict is likely to be pronounced on Tuesday.

On 21 August, McDonald’s India terminated its franchise agreement with Connaught Plaza Restaurants Pvt. Ltd (CPRL) for all 169 McDonald’s outlets in north and east India, citing non-payment of royalties as the primary reason.

Bakshi, the managing director of CPRL (a joint venture between him and McDonald’s India), is supposed to shut the restaurants within 15 days of termination (by 6 September).

The tribunal was hearing his appeal that the termination of pact is in contempt of an NCLT order of July 2017, which asked American fast food chain McDonald’s Corp. to refrain from interfering in the smooth functioning of Connaught Plaza and all its 169 restaurants.

“This is an attempt to circumvent the order. This is an action to further oppress the petitioner (Bakshi),” said Tejas Karia, Bakshi’s counsel, during the hearing.

He added that after the termination of the franchise pact, CPRL will be reduced to a shell company.

McDonald’s India argued the termination of agreement is the contractual right of the firm and that this right has been exercised by McDonald’s India and not McDonald Corp.

“There was no injunction against MIPL (in the NCLT order),” McDonald’s counsel said during the hearing.

In 2013, McDonald’s had voted against the re-election of Bakshi as managing director of CPRL, following which Bakshi challenged his removal at the Company Law Board (now NCLT), accusing McDonald’s of mismanagement and oppression. NCLT reinstated Bakshi as managing director on 13 July.

More From LiveMint

image beaconimage beaconimage beacon