Relief for OYO subsidiary in “bankruptcy” case as NCLAT suspends insolvency proceedings

OYO is currently working with over 1 lakh of small hotel and home business entrepreneurs with 99% of its hotels and homes following a revenue sharing model. (Bloomberg / File)

A day after Oravel Stays filed a complaint against the NCLT order, which sought to initiate insolvency proceedings against the subsidiary of OYO Hotels and Homes Private Limited (OHHPL) in a default of payment case, the National Company Law Appeals Tribunal (NCLAT) has now admitted plea and ordered the suspension of the formation of the Creditors Committee (COC). “NCLAT has suspended COC training in IBC proceedings against OHHPL, a subsidiary of OYO. OHHPL appealed the order to NCLAT and explained that a sight bill for INR 16L was issued to the claimant under protest and the claimant had voluntarily banked the DD, ”OYO said in a statement. communicated.

A news report previously claimed that OYO filed for bankruptcy even as the company’s founder and CEO, Ritesh Agarwal, refuted the same in a tweet on Wednesday. Oravel Stays, the parent company of OHHPL, a company of the subsidiary of the hotel chain OYO Hotels and Homes Private Limited (OHHPL), had challenged the NCLT order on April 7, 2021, following an insolvency plea filed on March 30, 2021, filed by one of its creditor Rakesh Yadav. Yadav had maintained that the OHHPL had defaulted for an amount of Rs 16 lakh.

“We are surprised to learn that the Honorable NCLT has admitted a petition against OHHPL a subsidiary of OYO for Rs 16 lakh in a contractual dispute, which is not even with this subsidiary,” OYO said in a statement. The company had said that Rs 16 lakh in dispute had already been paid to the claimant by the entity with which the dispute was raised other than OHHPL. The NCLT order had asked OHHPL’s creditors to submit their claims with proof by April 15, 2021 to the provisional resolution professional. Ahmedabad-based Keyur Jagdishbhai Shah, who is part of the business legal consultancy firm Keyur J. Shah & Associates, has been appointed as an interim resolution professional for the same.

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