oyo insolvency case: SC to hear hotelier’s appeal against tribunal’s Oyo order on Oct 21
The matter had been listed for hearing on Friday. Oyo’s counsel termed the appeal an attempt to blackmail the company because
it was coming out with an IPO.
Mona Agrawalla, who runs the Central Courtyard Resort in Siliguri, had challenged NCLAT’s dismissal of an insolvency case against Oyo in the Supreme Court. The Federation of Hotel & Restaurant Associations of India and other hoteliers had also filed applications to be included in the case.
The matter being heard by a two-judge bench consisting of justice Indira Banerjee and justice JK Maheshwari has now been adjourned for October 21.
Senior advocate Neeraj Kishan Kaul — representing Agrawalla — said the matter raises an important question of whether a party could be permitted to settle and a corporate insolvency resolution process could be withdrawn without the consent of all the lenders. The court said it would have to hear the matter.
“The law as laid down is that once the corporate insolvency resolution process has begun and a petition is admitted, after that it can’t be done without the consent of the lenders. Two judgments of this court say that after the CIRP has commenced, every creditor must be heard and his consent taken before a withdrawal can be permitted. In a matter like this I have to file a Form B as a lender. That’s all that I’m required to do and I have claimed that,” said Kaul.
KV Viswanathan, senior advocate appearing on behalf of Oyo, said the interventions should not be allowed because they have no legal standing. “If Mr Kaul’s client or the intervenors have any claimants, they ought to issue a Section 8 notice, await the reply and satisfy the admission of the tribunal that they have the claim. These are attempts at blackmail because Oyo is filing a red herring prospectus and raising an IPO. All these applicants want to blackmail [Oyo] on the eve of its IPO,” he said.
The issue originated in 2019, when Gurugram-based hotelier Rakesh Yadav accused Oyo of defaulting on payments and violating an agreement. In March 2021, the National Company Law Tribunal (NCLT) admitted a plea for corporate insolvency proceedings against the company following the hotelier’s complaint. NCLT appointed advocate Keyur Jagdishbhai Shah as the interim resolution professional (IRP), and asked other creditors of the company to submit their claims as well.
While Oyo appealed against the NCLT order in NCLAT, which stayed the formation of a committee of creditors, the process of filing claims against the company continued.
In total, Oyo’s creditors, including Agrawalla, filed claims worth around Rs 160 crore to NCLT. The company termed the claims as arbitrary and said that many of them were under dispute and without basis. It said that a demand draft of Rs 16 lakh—the pending amount claimed by Yadav—was issued to him under protest. In July, NCLAT allowed the withdrawal of insolvency proceedings against Oyo.
Rohit Kapoor, Oyo’s CEO for India & Southeast Asia, said at the time that the company had already settled the matter with the original claimant, but subsequent intervenors with “vested interests” had delayed its closure.