McDonald’s shutdown: CPRL administrator writes to logistics partner to resume services

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New Delhi: In a bid to resume the functioning of 84 closed McDonald’s restaurants in north and east India, former Supreme Court judge G.S. Singhvi has written to Radhakrishna Foodland, the logistics partner of McDonald’s in north and east India to restore the supply chain services.

Singhvi is an administrator appointed by the National Company Law Tribunal or NCLT on the board of Connaught Plaza Restaurants Pvt. Ltd (CPRL), the north and east India licencee of the American fast food chain, to oversee the functioning of CPRL. Radhakrishna Foodland, which manages the distribution network of CPRL in north and east India, had discontinued its services (on 20 December), due to which 84 McDonald’s restaurants faced closure earlier this week.

CPRL is a joint venture between McDonald’s India Pvt. Ltd (MIPL) and Vikram Bakshi, and operates 169 McDonald’s restaurants across north and east India.

In two letters dated 24 December and 25 December, Singhvi said that the discontinuation of services has disrupted and jeopardized the business of CPRL and amounts to “contravention of the orders of the Hon’ble NCLT and tantamount to contempt of the order of NCLT (dated 13 July 2017),” according to which Singhvi has to ensure smooth functioning of CPRL restaurants. “Therefore, you are advised to forthwith resume all the said supply services, so that all the restaurants operated by CPRL have a complete supply of all the products that they are supposed to sell and are able to continue to operate their daily businesses without any impediment,” Singhvi said, in one of the two letters mentioned above.

Mint has reviewed copies of both the letters.

Radhakrishna Foodland was also asked by Singhvi to send response to the letters by Tuesday noon. Balasubramanian N. Iyer, chief operating officer at Radhakrishna Foodland confirmed that the company has officially replied to the letter (and is waiting for Singhvi’s response), without divulging details on the content of the response and restoration of services. “They (Radhakrishna Foodland) have not resumed services. RKFL has replied to justice Singhvi’s letter. They claim it’s a contractual matter and does not fall in the ambit of administrator’s powers. If so, why did they not provide a 30-day notice enshrined in the agreement between CPRL and RKFL,” said Bakshi, in a text message.

The development comes in the backdrop of the ongoing legal battle between Bakshi and MIPL. On 21 August, McDonald’s India had terminated its franchise agreement with CPRL, according to which Bakshi was supposed to cease using McDonald’s name, trademarks, designs, branding, operational and marketing practice and policies and food recipes and specifications from 6 September. This termination was challenged by Bakshi before the NCLT for being in contempt of the earlier NCLT order, which had asked McDonald’s Corp. to refrain from interfering in the smooth functioning of CPRL. So far, Bakshi has continued to operate the restaurants.