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SC ALLOWS FHRAI’S APPEAL TO BE TAGGED IN SILIGURI HOTELIER’S CASE AGAINST OYO

01 th Dec 2021

In the recent hearing on Nov 29, based on the Civil Appeal filed by India’s apex Hospitality Association - Federation of Hotel & Restaurant Associations of India (FHRAI) under Section 62 of the IBC challenging the final order dated 07.07.2021 passed by the Ld. NCLAT, the Hon’ble Supreme Court has allowed FHRAI to be tagged along with the Appeal of Ms Mona Agrawalla of Dabriwal Enterprises in Siliguri against OYO on 15th Dec 2021.

 

FHRAI had filed the Appeal on behalf of its hotel members who are suffering hugely on account of non-payments of debts by Oyo Hotels & Homes Pvt Ltd. (OYO). This development comes after the Hon’ble NCLAT vide an impugned order of 7th July 2021 had allowed the Withdrawal Application filed by Operational Creditor - Rakesh Yadav who has settled with OYO. The Association has stated the Withdrawal Application was accepted without taking into account the 110 other operational creditors with dues of over Rs.225 crores.

 

“The latest development has offered several hoteliers especially, those operating in the budget and mid-market segment, a ray of hope of recovering the dues owed from OYO. Aggrieved by the Hon’ble NCLAT’s Impugned Order, several members approached FHRAI to file Civil Appeal against the Order and to also be impleaded in the Appeal matter of Ms Mona Agrawalla of Dabriwal Enterprises. Many hoteliers including our members are facing hardships due to COVID19 and have scarce resources to file individual and costly litigations in the SC on their own. These hoteliers just can’t leave their businesses to go to Delhi especially, during pandemic and hence FHRAI filed a Civil Appeal challenging the judgement passed by NCLAT. The Hon’ble SC has allowed our Association to be tagged along with the Siliguri based hotelier’s Appeal. This is a big breakthrough,” says Mr Gurbaxish Singh Kohli, Vice President, FHRAI.

 

The FHRAI was also an Intervenor in the NCLAT and represented around fifty members with claims of approx. Rs.100 Crores.

 

“OYO operates its business under maze of more than a dozen subsidiary entities. These individual entities have agreements with independent hotels, mostly in the budget segment. FHRAI has the data of hundreds of such hotels that have reported payment defaults and other unethical business practices by OYO. The systemic depredation of the budget segment hotel business and its market as a means to achieve notional billion-dollar valuation for OTAs is a serious cause of concern for the hospitality ecosystem of our country. The FHRAI has also filed a complaint before the Competition Commission of India (CCI) against Oyo for engaging in anti-competitive business practices. The CCI is investigating OYO for alleged violation of the provisions of competitive laws. If CCI finds a case against OYO, it may also order behavioural changes which will have materially adverse effects,” concludes Mr Pradeep Shetty, Jt. Hon. Sec., FHRAI.

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