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Insolvency Case: Oyo’s subsidiary gets relief from NCLAT – Moneycontrol.com

The plea had been filed by a Gurgaon hotelier who accused the company of defaulting on payments and violating an agreement that required it to operate and maintain the hotel under the brand Oyo.

File image of Oyo Founder and CEO Ritesh Agarwal

In a big relief to Softbank-backed Oyo, the National Company Law Appellate Tribunal (NCLAT) has admitted the plea of its subsidiary Oyo Hotels and Homes Pvt Ltd (OHHPL) ordering a stay on formation of committee of creditors (COC) and claimant draws, the company said in a statement on March 8.

As per the order, the formation of the COC has been halted. NCLAT in its March 30 order had asked all the creditors of Oyo’s subsidiary to submit its claims by April 15, to initiate the corporate insolvency proceeding.

It had admitted a plea for corporate insolvency proceeding against OHHPL, which operates under the brand name  Weddingz.in.

The plea had been filed by a Gurgaon hotelier who accused the company of defaulting on payments and violating an agreement that required it to operate and maintain the hotel under the brand Oyo.

Oyo challenged and appealed the order in front of NCLAT on April 7.

“The NCLAT provided a stay for the formation of COC in IBC proceedings against OHHPL, a subsidiary of OYO. OHHPL appealed the order in front of NCLAT and explained that a demand draft of Rs 16L was issued to the claimant under protest and the claimant has willingly banked the DD,” the company said in a statement.

It isn’t immediately clear if the whole process of insolvency proceedings has been stayed by NCLAT or only the formation of the COC. The same will be understood only once the copy of the order gets public.

Priyanka Sahay