homebusiness Newscompanies NewsOyo 'subsidiary' faces insolvency proceedings by NCLT over payment default, to challenge order
Oyo 'subsidiary' faces insolvency proceedings by NCLT over payment default, to challenge order
Oyo has reportedly challenged the NCLT order based on a complaint by a Gujarat hotel owner on default of payments worth Rs 16 lakh.
The Ahmedabad branch of the National Company Law Tribunal (NCLT) has ordered a corporate insolvency resolution process of Oyo Hotels and Homes Pvt. Ltd, over a payment default of Rs 16 lakh to a Gurgaon-based hotel owner.
Oyo says NCLAT admitted its plea against the insolvency order, and said that NCLAT has ordered a stay on the formation of a Committee of Creditors for IBC proceedings against subsidiary
The hotel owner had approached the NCLT stating that he had entered into a contract with Oyo Hotels and Homes in 2018 which granted the latter an exclusive license to operate the hotel under the 'Oyo Rooms' brand. The complainant said that Oyo had defaulted on payments of Rs 16 lakh between July and November 2019, and issued a demand notice under the insolvency and bankruptcy code in November 2019.
As per the filings, Oyo had informed the NCLT that the business had been transferred from Oyo Hotels and Homes to another entity Mypreferred Transformation and Hospitality Pvt Ltd. However, the NCLT in its order has said that Oyo Hotels and Homes had the liability to make payment of dues to the hotel owner, which was the operational creditor.
The tribunal ruled that operational debt is due to the applicant and called for a public announcement of the initiation of corporate insolvency resolution.
Oyo in a statement on Wednesday said it is challenging the order, with founder Ritesh Agarwal tweeting that the company has appealed to the NCLAT about the matter.
"We are surprised to hear that the Hon’ble NCLT has admitted a petition against OHHPL a subsidiary of OYO for INR 16 Lakhs in a contractual dispute, which dispute is not even with this subsidiary. We have filed an appeal. The matter is sub-judice and we would refrain from commenting further on the merits of the matter at this stage. We have strong faith and belief in our judicial system," the company statement said.
Agarwal added that the company has already paid Rs 16 lakh to the hotel owner 'under protest'.
There is a PDF and text message circulating that claims OYO has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking INR 16Lakhs (USD 22k) from OYO's subsidiary leading to a petition at NCLT. 1/3
— Ritesh Agarwal (@riteshagar) April 7, 2021
(Edited by : Ajay Vaishnav)
First Published: Apr 7, 2021 1:01 PM IST
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