BackNCLAT upholds plea to drop insolvency case against Oyo
Claims registered in the case were estimated to be between ₹160 crore and ₹200 croreIn June, Oyo had settled the matter out of court, but NCLAT continued to hear the case, based on claims of other creditors
PremiumBENGALURU : The National Company Law Appellate Tribunal (NCLAT) has allowed the withdrawal of the ongoing insolvency case against Oyo Hotels and Homes Pvt. Ltd(OHHPL), a unit of the multi-hospitality chain Oravel Stays Pvt. Ltd, closing the proceedings in effect. Oyo will continue to work closely with its hotel partners for the closure of any pending claims, it said. This has come as a setback to multiple hoteliers who had approached the NCLAT with claims of defaults by the company. Mint has reviewed a copy of the order.
The Federation of Hotel and Restaurant Associations of India (FHRAI) had said in May that it was allowed by NCLAT to act on behalf of the affected hotel owners in the insolvency case against Oyo’s subsidiary. The claims registered with the interim resolution professional were estimated to be between ₹160 crore and ₹200 crore, the industry body said. The claims of FHRAI members alone were of the tune of ₹70 crore to ₹80 crore, it said.
The matter came to the fore after R.K. Yadav, owner of Yellow White Residency Hotel, filed a case with NCLAT alleging that Oyo’s arm had defaulted on a payment of ₹16 lakh. In April, NCLAT ordered a corporate insolvency resolution process against OHHPL.
Oyo and Yadav settled the matter out of court in June, but NCLAT continued to hear the matter, based on claims of other creditors. “We welcome the decision of NCLAT and that the matter has finally been laid to rest. We had already settled with the original claimant but subsequent interveners with vested interests who were not a party to the case had delayed its closure...Despite today’s judgment, we welcome collaborative conversations with them and all other associations to work towards the resurgence of travel in India," said Rohit Kapoor, CEO, India and South-east Asia at Oyo.
Khaitan & Co. represented Oyo in the case. FHRAI now aims to file an appeal challenging NCLAT’s order. “The intervention was filed to reduce the hardship and avoid multiplicity of litigations...Now, many hotels across the country that are facing extreme hardship on account of the shutdowns and closures will be put through additional hardship of filing separate claims," said Pradeep Shetty, joint honorary secretary, FHRAI.
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