Gurgaon-based hotelier drags OYO subsidiary into insolvency court

Gurgaon-based hotelier Rakesh Yadav, who runs a 21-room hotel by the brand name Yellow White Residency has initiated insolvency proceedings against Ritesh Agarwal-owned OYO Hotels & Homes Private Ltd.

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted Yadav’s insolvency petition against OYO Hotels & Homes. According to Yadav’s petition, OYO owed Rs 16 lakh to him and despite repeated reminders and request for payments, the corporate debtor did not pay the outstanding amount.

OYO Hotels & Homes on its part tried to avert the insolvency proceeding against it by arguing that the petition should have been filed against My Preferred Transformation and Hospitality Private Ltd as it had transferred its businesses to MTH with effect from 1 June 2019.

OYO also argued at NCLT that the claims of Rs 16 lakh was arising out of a transaction of immovable property and that liabilities and dues in relations to such transactions cannot be categorized as operational debt.

Though NCLT accepted the fact that corporate debtor’s businesses had been transferred to MTH from 1 June 2019, and that the petitioner was informed of the same, it maintained that agreement entered between the petitioner (Rakesh Yadav) and OYO was intact and the obligations under the agreement will continue to be managed under the OYO brand name.

The NCLT also dismissed OYO’s argument that the outstanding amount was not operational debt, and admitted the insolvency petition. Keyur Shah has been appointed interim resolution professional.

Meanwhile, a statement issued by OYO has said that it is surprised that the NCLT has admitted a petition against its subsidiary for an outstanding amount of Rs 16 lakh in a contractual dispute, which it claims is not even with this subsidiary. It further said that it had filed an appeal against NCLT’s order.

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