NCLT admits insolvency plea against Oyo subsidiary; company files appeal

The National Company Law Tribunal on March 30 admitted an insolvency plea against Oyo Hotels and Homes Private Limited, an Ahmedabad-based subsidiary of the Oyo Group. 

The plea, filed by Gurugram-based hotelier Rakesh Yadav, is for Rs 16 lakh over a contractual dispute. The National Company Law Tribunal or NCLT has ordered Oyo’s subsidiary to submit their claims with proof in the case by April 15.

In a statement, the company said that it has challenged the NCLT’s order in the National Company Law Appellate Tribunal or NCLAT. The case has been listed for hearing at the tribunal on Thursday, April 8.

“We are surprised to hear that the Hon’ble NCLT has admitted a petition against OHHPL, a subsidiary of OYO Travels [Oravel Travels Private Limited] for INR 16 Lakhs in a contractual dispute, which dispute is not even with this subsidiary,” an Oyo spokesperson said in a statement. 

“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,” the statement added. 

Oyo also said that it had already paid Rs 16 lakh in dispute to the claimant under protest.

Keyur Jagdishbhai Shah, the owner of Ahmedabad-based Keyur J Shah & Associates, has been appointed as the interim resolution professional in the case. 

Yadav filed a petition against Oyo Hotels and Homes claiming that the company refused to pay him outstanding dues to the tune of Rs 16,02,000 “which clearly shows unwillingness of the company to pay the outstanding operational debt,” according to NCLT’s March 30 order. 

According to the order, OHHPL was supposed to pay Yadav a “benchmark revenue” amount of Rs 4.5 lakh each month. In his petition, he said that Oyo was regular in paying him the benchmark revenue between December 2018 and June 2019. However, he claimed that the company defaulted on its dues between July and December 2019. 

In response, Oyo had informed the NCLT that the business had been transferred from Oyo Hotels and Homes to Mypreferred Transformation and Hospitality Pvt Ltd, the order said. 

Oyo also told the tribunal that the claim was arising out of transactions related to an immovable property and the liabilities and dues in such transactions are not categorised as “operational debt” under the Insolvency and Bankruptcy Code, 2016. 

However, despite the transfer, NCLT maintained in its order that Oyo Hotels and Homes had the liability to make payment of dues to the hotel owner, which was the operational creditor.

“[...]the applicant [Yadav] has placed on record enough documents evidencing the default and hence, the present application deserves to be admitted,” the Ahmedabad-bench of the NCLT held in its order.

It is worth noting that Mypreferred Transformation and Hospitality  has close ties with Oyo. It lists Saurabh Jalan, Rohin Vig, Rakesh Kumar Prusti, Anuj Tejpal, Maninder Gulati and Hiroki Kimoto as directors. At present, all these individuals are connected with Oyo.