Relief for OYO subsidiary in ‘bankruptcy’ case as NCLAT stays insolvency proceeding

By: |
April 8, 2021 4:19 PM

"OHHPL appealed the order in front of NCLAT and explained that a demand draft of INR 16L was issued to the claimant under protest and the claimant has willingly banked the DD," OYO said.

The NCLT order had asked OHHPL’s creditors to submit their claims with proof by April 15, 2021. (Bloomberg/File)

A day after Oravel Stays filed against the NCLT order, which had sought to initiate insolvency proceedings against the company’s subsidiary OYO Hotels and Homes Private Limited (OHHPL) in a payment default case, the National Company Law Appellate Tribunal (NCLAT) has now admitted OYO’s plea and ordered a stay against the formation of committee of creditors (COC). “The NCLAT provided a stay for the formation of COC in IBC proceedings against OHHPL, subsidiary of OYO. OHHPL appealed the order in front of NCLAT and explained that a demand draft of INR 16L was issued to the claimant under protest and the claimant has willingly banked the DD,” OYO said in a statement.

A news report had earlier claimed that OYO has filed for bankruptcy even as the company Founder and CEO Ritesh Agarwal had refuted the same in a tweet on Wednesday. Oravel Stays, the parent firm of OHHPL, company of subsidiary hospitality 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 contended that OHHPL had defaulted for an amount of Rs 16 lakh.

“We are surprised to hear that the Hon’ble 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 had said in a statement. The company had said that Rs 16 lakh in dispute has already been paid to the claimant by the entity with whom 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 interim resolution professional. Ahmedabad-based Keyur Jagdishbhai Shah who is part of corporate legal advisory firm Keyur J. Shah & Associates was appointed as the interim resolution professional for the same.

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