NCLAT ordered stay on the constitution of CoC extended in favour of OYO subsidiary

NCLAT ordered stay on the constitution of CoC extended in favour of OYO subsidiary

-Clarification on current National Company Law Appellate Tribunal (NCLAT) proceeding- 

  • NCLAT previously granted stay on the constitution of the Committee of Creditors to continue
  • NCLAT asked the Claimant to file its response to OHHPL’s appeal. NCLAT noted OHHPL’s submissions that OHHPL was the wrong entity against whom proceedings were initiated and that another entity had already paid the claimed amount which was encashed and accepted by the Claimant without protest

At OYO, while we await the court order, we have been made aware that unverified information is being circulated once again on the NCLT and the NCLAT matter. While we respect the confidentiality of the judicial process, the response herein is a consequence of the circulation of unverified messages on this matter. In the interest of bringing facts forward, we are stating the following as we all await formal details from the court.

Further, to the incorrect report circulating last week on social media on insolvency and such similar terms used erroneously in the context of OYO, on 8th April, 2021, the Hon’ble NCLAT (National Company Appellate Law Tribunal, New Delhi) admitted our plea and ordered a stay on the formation of CoC (Committee of Creditors) under the CIRP (Corporate Insolvency Resolution Process) against OHHPL, an OYO subsidiary.

The insolvency matter was first filed before NCLT, Ahmedabad by a claimant for INR 16 Lakhs, which OHHPL challenged in NCLAT and was granted with the interim relief of a stay on the constitution of the CoC. The Claimant has already accepted the disputed amount of INR 16 lakhs which was paid under protest by a different subsidiary against the disputed claim.

We have been informed that unverified claims of large amounts are also being made to the Interim resolution professional (IRP) in response to the public announcement. Please note, these claims are received by the IRP as part of the standard process but they aren’t reviewed, assessed, contested or confirmed, or even adjudicated (as some of these may pertain to ongoing disputes) yet. These claims are arbitrary and are aspirational demands, many of which are currently under dispute and without basis. All claims against the entity in question will have to be submitted to the IRP for verification, assessment on veracity and genuineness of the same. Unfortunately, some parties proceed to submit frivolous, inflated, fictitious and unadjudicated claims taking undue advantage of the process. These claims do not straightaway form dues or payments by OHHPL. Such claims await evaluation basis factual evidence and substantive documents and could be rejected by the IRP.

An example of such an unverified and over-exaggerated claim is of INR 50 Crore by a single claimant for reputational damage. This specific claim is already under legal proceedings (name not being disclosed to maintain confidentiality). Needless to mention, such claims are bound to be rejected by the IRP during the process of verification of such claims.