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Jan 30, 2018 08:49 AM IST | Source: PTI

McDonald's challenges HC order on NCLT show-cause notice

The single judge had on January 9 rejected the fast-food major's plea, saying the grievances raised by it were a result of "unfounded apprehensions" that the NCLT had prejudged the issue and that it "reflects paranoia rather than substance".

Fast-food major McDonald's today moved the Delhi High Court against its single judge's order dismissing the company's plea challenging a 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.

The single judge had on January 9 rejected the fast-food major's plea, saying the grievances raised by it were a result of "unfounded apprehensions" that the NCLT had prejudged the issue and that it "reflects paranoia rather than substance".

The appeal was listed for hearing before a bench of Justices S Ravindra Bhat and A K Chawla, one of whom recused from the matter.

The petition has been sent to the Acting Chief Justice who will now decide which bench should hear the matter.

In its plea before the single judge, McDonald's had contended that in the absence of rules for 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.

It had argued 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 licence 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.

The NCLT by its July 2017 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 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 licence by McDonald's India Pvt Ltd (MIPL).
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