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HC stays NCLT show cause notice to McDonald’s

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The Delhi High Court today put on hold the show cause notice issued by the National Company Law Tribunal’s () to fast-food major McDonald’s and its parent company.

HC stays NCLT show cause notice to McDonald's
McDonald's in its plea has 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

According to a PTI report: The NCLT order had come on a contempt plea filed by McDonald’s estranged Indian partner .

Justice R K Gauba gave the interim relief to McDonald’s and listed the matter for further arguments on November 7.

The order came on the company’s plea challenging the show cause notice issued to it by the NCLT.

McDonald’s in its plea has 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.

In its plea in the high court, McDonald’s has contended that the NCLT ought not to have entertained the contempt plea when they have already filed an appeal against its July 13 decision in the National Company Law Appellate Tribunal (NCLAT).

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

NCLT by its July 13 order had reinstated him as the Managing Director of CPRL and refrained the US-based food giant from interfering in the functioning of CPRL.

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.

Bakshi had moved the NCLT following termination of the 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 its eating house licences.