The National Company Law Appellate Tribunal (NCLAT) on Wednesday closed insolvency proceedings against Oyo and one of its subsidiaries, and also disallowed the intervention of external parties including Federation of Hotel & Restaurant Associations of India (FHRAI).
Industry body FHRAI said in May it has been allowed by the NCLAT to intervene on behalf of hotels in the Oyo unit insolvency case before the tribunal.
The association had filed the application on behalf of its member hotels in India, who it said at the time are operational creditors suffering hugely on account of non-payments of debt by Oyo.
On Wednesday the NCLAT closed proceedings for insolvency of Oyo’s subsidiary Oyo Hotels and Homes Private Limited (OHHPL), and allowed Oyo’s plea for setting aside the Insolvency and Bankruptcy Code case against OHHPL.
Oyo will continue to work closely with its hotel partners for the closure of any pending claim, the company said in a statement.
“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...Covid-19 has impacted the travel industry significantly and we believe the 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,” said Rohit Kapoor, CEO - India and Southeast Asia, Oyo.
Gurugram-based hotelier Rakesh K Yadav, who filed an insolvency plea with the National Company Law Tribunal (NCLT) against a unit of Oyo, withdrew the case after resolving the issue with the hospitality start-up in June.
Counsels of OYO, Khaitan & Co said, “Throughout the matter, OYO has been forthcoming and committed to working together with all relevant stakeholders including Mr. R K Yadav.
"It was a straightforward case where the two parties involved had settled the matter and there was no room for any interventions which has now been upheld by the Hon’ble Tribunal also.”
In April this year, NCLT Ahmedabad started insolvency proceedings against Oyo’s subsidiary Oyo Hotels and Homes Pvt Ltd (OHHPL) after Yadav filed the case.
He claimed that OHHPL defaulted on a payment of Rs 16 lakh.
Commenting on the settlement, Yadav’s counsel Srinivas Kotni of Lexport had earlier said, “The IBC case regarding Oyo’s subsidiary OHHPL in NCLT Ahmedabad is fully resolved and withdrawal application is executed. Further, my client acknowledges the receipt of Rs 16 lakhs.”
Photograph: Anushree Fadnavis/Reuters