NCLT Orders Insolvency Resolution Process Against OYO Hotels

Considering an application filed by an operational creditor in respect of non-payment of dues totaling to Rs. 16 lakh, the Ahmedabad bench of NCLT has ordered the start of a corporate insolvency resolution process of Oyo Hotels.

NCLT Orders Insolvency Resolution Process Against OYO Hotels

"The creditors of Oyo Hotels & Homes are hereby called upon to submit their claims before April 15 to the interim resolution professional," a copy of an April 4 NCLT order, signed by interim resolution professional Keyur Jagdishbhai Shah said.

"The order has been passed based on an application filed by an operational creditor. An amount of Rs 16 lakh is outstanding. The order reserved was pronounced on April 1. Based on the merits of the case, the NCLT bench decided that Oyo didn't pay the dues. So as per IBC, CIRP was ordered," Shah told a leading business daily.

Against the order, OYO has filed in appeal in NCLAT.

A PDF version of the order circulating on social media platforms on Wednesday resulted in rumours that the company was filing for bankruptcy.

There is a pdf and text message circulating that Oyo has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking Rs 16 lakh from Oyo' s subsidiary leading to a petition at NCLT", said the company's founder Ritesh Agarwal in a tweet. Further he added, "Oyo has paid that under protest and amount is already banked by the claimant. Oyo has also appealed with the NCLAT about the matter. Oyo is recovering from the pandemic steadily and our largest markets are operating profitably."

He also said the order was against the Oyo subsidiary called OHHPL.

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