NCLAT stays corporate insolvency proceedings against Oyo subsidiary
The NCLT plea had been filed by a Gurgaon hotelier, who had accused the company of defaulting on payments and violating an agreement. The NCLAT ruling has now halted a ruling by the Ahmedabad bench of the NCLT initiating corporate insolvency proceedings against the subsidiary, OHHPL.
April 09, 2021 / 09:00 PM IST
File image of Oyo Founder and CEO Ritesh Agarwal
Softbank-backed Oyo got a reprieve when the National Company Law Appellate Tribunal (NCLAT) admitted a plea by its subsidiary Oyo Hotels and Homes Pvt Ltd (OHHPL) seeking a stay on insolvency proceedings against it, the company said in a statement on April 8.
The Ahmedabad bench of the NCLT had ordered the initiation of corporate insolvency proceedings against OHHPL on March 30.
The NCLAT order has halted the formation of a committee of creditors (COC).
In its March 30 order, the Ahmedabad bench of the NCLT had asked all the creditors of Oyo’s subsidiary OHHPL, which operates under the brand name Weddingz.in, to submit their claims by April 15.
The NCLT plea had been filed by a Gurgaon hotelier, who had accused the company of defaulting on payments and violating an agreement that required the hotel to operate under the brand Oyo.
Oyo challenged and appealed the order before the 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 INR 16L was issued to the claimant under protest and the claimant has willingly banked the DD,” the company said in a statement.