OYO will continue to face insolvency proceedings against it in the National Company Law Tribunal (NCLT), even as the company reached a settlement with the original plaintiff. Even though OYO had managed to reach a settlement agreement with Rakesh Yadav, the NCLT continued to hear the proceedings against OYO, reported Inc42.
Yadav’s company, Yellow White Residency Hotel, moved the Ahmedabad branch of the NCLT on April 1 against OYO Hotels and Homes Private Limited (OHHPL). Yadav had pleaded before the court that OHHPL had not given Rs 16 lakh owed to his company between July and December 2019.
On April 7, other creditors had also come forward in the court stating that the OYO subsidiary owed them substantial amounts of money as well. The creditors had filed claims amounting to Rs 250 crore, reported Inc42.
OYO had appealed for a stay in the NCLT and a partial stay was granted during which OYO privately settled the Rs 16 lakh dues with Yadav.
"The settlement agreement between the original applicant and OYO was already filed with NCLT; but other claimants came forward contesting the withdrawal stating that they also have to get their money. Normally such interlocutory applications are not entertained post- settlement, but it is still up to the court to decide. On the basis of merit, the court will hear the case being made by other claimants," advocate Keyur Jagdishbhai Shah told Inc42. Shah is the court-appointed interim resolution professional (IRP) to the case.
While the claims from creditors have swelled to Rs 250 crore, the matter is mostly unverified by the court. OYO has said the interveners have "no locus (standi) in this matter." The NCLT has not yet ordered the formation of the committee of creditors under the Insolvency and Bankruptcy Code, 2020 as well. The matter will be up for hearing on June 21.
(Edited by: By Shoma)