Bengaluru: National Company Law Appellate Tribunal (NCLAT) has closed insolvency proceedings against Oyo and its subsidiary Oyo Hotels and Homes (OHHPL). The order of the tribunal rejected the interference of outside parties including Federation of Hotel and Restaurant Association of India (FHRAI) in the matter. OYO is expected to work closely with its hotel partners to close any pending claims.
The origin of the order for a disputed amount of Rs 16 lakh between OYO and Rakesh Yadav, a hotelier, regarding ‘minimum guarantee’ to OYO owners goes back. Oyo used to offer property owners a minimum amount per month, irrespective of the business of the property.
TOI had earlier reported NCLT, Ahmedabad’s observation that OYO partially failed to pay benchmark revenue for July and August 2019 and then defaulted on the entire amount between September and November 2019. Keyur Shah, who was appointed independently by the NCLT, had said that Yadav had filed the application early for his pending dues. 2020, before the Covid pandemic, when the default limit for insolvency proceedings under the IBC (Insolvency and Bankruptcy Code) was Rs 1 lakh. In March 2020, this limit was increased to Rs 1 crore to prevent initiation of proceedings against MSMEs facing the outbreak of COVID-19.
However, Oyo later cleared Yadav’s dues and Yadav withdrew the insolvency petition. But other organizations tried to pursue the matter. It is no longer allowed.
Rohit Kapoor, CEO, India and South East Asia at OYO, said, “We welcome the decision of the NCLAT and the matter has finally been settled. We had already reached a settlement with the original claimant but later the vested interest interveners delayed the closure of the case. We are committed to building the most trusted brand for our partners and resolving all issues, as we have been actively doing in the past. ”
He said that COVID-19 has significantly impacted the travel industry and efforts of industry associations should be there to help revive the industry during this difficult time. “Despite today’s decision, we welcome cooperative dialogue with them and all other associations to work towards the resumption of travel in India,” he said.
The origin of the order for a disputed amount of Rs 16 lakh between OYO and Rakesh Yadav, a hotelier, regarding ‘minimum guarantee’ to OYO owners goes back. Oyo used to offer property owners a minimum amount per month, irrespective of the business of the property.
TOI had earlier reported NCLT, Ahmedabad’s observation that OYO partially failed to pay benchmark revenue for July and August 2019 and then defaulted on the entire amount between September and November 2019. Keyur Shah, who was appointed independently by the NCLT, had said that Yadav had filed the application early for his pending dues. 2020, before the Covid pandemic, when the default limit for insolvency proceedings under the IBC (Insolvency and Bankruptcy Code) was Rs 1 lakh. In March 2020, this limit was increased to Rs 1 crore to prevent initiation of proceedings against MSMEs facing the outbreak of COVID-19.
However, Oyo later cleared Yadav’s dues and Yadav withdrew the insolvency petition. But other organizations tried to pursue the matter. It is no longer allowed.
Rohit Kapoor, CEO, India and South East Asia at OYO, said, “We welcome the decision of the NCLAT and the matter has finally been settled. We had already reached a settlement with the original claimant but later the vested interest interveners delayed the closure of the case. We are committed to building the most trusted brand for our partners and resolving all issues, as we have been actively doing in the past. ”
He said that COVID-19 has significantly impacted the travel industry and efforts of industry associations should be there to help revive the industry during this difficult time. “Despite today’s decision, we welcome cooperative dialogue with them and all other associations to work towards the resumption of travel in India,” he said.
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