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Jan 10, 2018 08:53 PM IST | Source: PTI

HC rejects McDonald's plea against NCLT show cause notice

Justice R K Gauba rejected McDonald's plea and said the reasons for it will follow soon in the judgement, which is not yet available. The court had earlier put on hold the show cause notice issued by the NCLT.

The Delhi High Court has dismissed fast-food major McDonald's plea challenging the show cause notice issued to it by the National Company Law Tribunal (NCLT) on a contempt plea filed by its estranged Indian partner Vikram Bakshi.

Justice R K Gauba rejected McDonald's plea and said the reasons for it will follow soon in the judgement, which is not yet available.

The court had earlier put on hold the show cause notice issued by the NCLT.

McDonald's in its plea had contended that in the absence of rules for the conduct of contempt action under section 425 of the Companies Act read with the Contempt of Court Act, such proceedings would deprive it and others of their fundamental rights.

In its plea in the high court, McDonald's had contended that the NCLT ought not to have entertained the contempt plea when they had already filed an appeal against its July 13, 2017, decision in the appellate tribunal (NCLAT).

Bakshi had moved the contempt plea alleging that the fast-food major's decision to terminate his franchise license with regard to 169 outlets run by their 50-50 joint venture Connaught Plaza Restaurant Ltd (CPRL) violated the NCLT order of July 13, 2017.

NCLT by its order had reinstated him as the Managing Director of CPRL and refrained the US-based food giant from interfering in its functioning.

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 associated intellectual property among other things, within 15 days of the termination notice, which had expired on September 6, 2017.

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

In June 2017, 43 outlets of the fast-food chain were closed in the capital following the expiry of its eating house licences.
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