NCLAT closes insolvency case against Oyo – Times of India
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BENGALURU: The National Company Law Appellate Tribunal (NCLAT) has closed the insolvency proceedings against Oyo and its subsidiary Oyo Hotels and Homes (OHHPL). The tribunal’s order disallowed the intervention of external parties, including the Federation of Hotel & Restaurant Associations of India (FHRAI), in the matter. Oyo is expected to work closely with its hotel partners for the closure of any pending claims.
The order’s origin goes back to a disputed amount of Rs 16 lakh between Oyo and a hotel owner, Rakesh Yadav, with regard to the ‘minimum guarantee’ that Oyo provides to owners. Oyo used to offer a minimum amount per month to property owners regardless of the business the property did.
TOI had earlier reported NCLT, Ahmedabad’s observation that Oyo failed to pay the benchmark revenue partially for July and August 2019 and then defaulted on the entire sum between September and November 2019. Keyur Shah, appointed independently by NCLT, had said Yadav filed the application for his pending dues in early 2020, before the Covid pandemic, when the default threshold for invoking insolvency proceedings under the IBC (Insolvency & Bankruptcy Code) was Rs 1 lakh. This threshold was raised to Rs 1 crore in March 2020 to prevent the triggering of proceedings against MSMEs facing the Covid-19 heat.
Oyo, however, subsequently settled Yadav’s dues, and Yadav withdrew the insolvency plea. But other organisations tried to continue to pursue the matter. This has now been disallowed.
Rohit Kapoor, CEO – India & Southeast Asia at Oyo, said, “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. We remain committed to building the most trusted brand for our partners and resolving all issues, as we’ve been proactively doing in the past.”
He said Covid-19 has impacted the travel industry significantly and efforts of industry organisations should be to help resurrect the industry during this grim time. “Despite today’s judgment, we welcome collaborative conversations with them and all other associations to work towards the resurgence of travel in India,” he said.
The order’s origin goes back to a disputed amount of Rs 16 lakh between Oyo and a hotel owner, Rakesh Yadav, with regard to the ‘minimum guarantee’ that Oyo provides to owners. Oyo used to offer a minimum amount per month to property owners regardless of the business the property did.
TOI had earlier reported NCLT, Ahmedabad’s observation that Oyo failed to pay the benchmark revenue partially for July and August 2019 and then defaulted on the entire sum between September and November 2019. Keyur Shah, appointed independently by NCLT, had said Yadav filed the application for his pending dues in early 2020, before the Covid pandemic, when the default threshold for invoking insolvency proceedings under the IBC (Insolvency & Bankruptcy Code) was Rs 1 lakh. This threshold was raised to Rs 1 crore in March 2020 to prevent the triggering of proceedings against MSMEs facing the Covid-19 heat.
Oyo, however, subsequently settled Yadav’s dues, and Yadav withdrew the insolvency plea. But other organisations tried to continue to pursue the matter. This has now been disallowed.
Rohit Kapoor, CEO – India & Southeast Asia at Oyo, said, “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. We remain committed to building the most trusted brand for our partners and resolving all issues, as we’ve been proactively doing in the past.”
He said Covid-19 has impacted the travel industry significantly and efforts of industry organisations should be to help resurrect the industry during this grim time. “Despite today’s judgment, we welcome collaborative conversations with them and all other associations to work towards the resurgence of travel in India,” he said.
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