On Monday (November 4), a Bengaluru hotelier has filed a first information report (FIR) at the Ulsoor police station in Bengaluru against OYO founder and group CEO Ritesh Agarwal as well as others in the company. The complainant has alleged “criminal breach of trust”, “cheating”, “criminal conspiracy”, “abetment”, “computer related offences” under Section 107, 120B, 405, 420 Of The Indian Penal Code 1860 and Section 66 of the Information and Technology Act, 2000 read with Section 156 of the Code of Criminal Procedure.
The case has been filed against Rohit Srivatsava, head of southern India for OYO, Madhvendra Kumar, head, business development; Gourab De, head, business development and in charge of property; Prateek Agarwal, finance, OYO and Manjeet Singh, finance, OYO and Mrinmoy Chakraborty, business development manager at OYO.
Talking to Inc42, Elister Fernandez, CEO of Roxel Inn said that OYO hasn’t paid them assured benchmark revenue of INR 7 Lakh each month, as signed under contract on May 23, 2019. Fernandez alleged that OYO has created multiple non-existent room bookings which it marked under no-show and cancellations.
In a statement to Inc42, an OYO spokesperson refuted “the claims made in the complaint that has been wrongfully filed against our founder and six other office bearers, based on false allegations and exaggeration on a regular commercial dispute.” The police has summoned the alleged accused to meet the investigating officer on November 7.
Why Roxel Inn Filed FIR Against OYO
In its complaint, Fernandez has alleged that, “It is brought to notice that in the month of June, with an intention to cheat and cause wrongful loss, OYO and its team has created bogus bookings in various names to the property.”
“However, none of this was forthcoming on paper or in reality and hence my company immediately corresponded via email stating the details of the No-show and Cancellations of the bogus bookings made on the OYO platform and further requested to OYO and its team to adjust an amount of INR 7098/- for willful and negligent act of OYO and its team,” he added.
He alleged that repeated mails didn’t solve the issues and OYO continued to charge Roxel Inn for such “bogus” bookings. Talking to Inc42, Fernandez also said that OYO has repeatedly broken conditions of the contract they had signed. “We had specifically asked not to book unmarried couples for our hotel, but they continued to send such couples against our policy and charge us under 3C policy — which is used to determine penalties and rewards — for not accepting the booking,” he explained.
OYO spokesperson condemned “the Bengaluru owner’s insistence to discriminate and not welcome Guests against the law.”
Talking to Inc42, Pradeep Shetty, joint honorary secretary, FHRAI and vice president, HRAWI said that the case is similar to a bunch of concerns against OYO for defrauding and not paying dues of hoteliers. “We have asked all the small hoteliers who can’t get out of contractual agreements with OYO to take the justice route and make their concerns heard against the company. We are also trying to reach to the tourism industry to take cognizance of the concerns around OYO.”
Hoteliers Vs OYO: An Unending Dispute?
The complaints against OYO and its “predatory” behaviour surfaced last year and since then, the trend hasn’t come to an end. In September, a Bengaluru hotelier Natarajan V R S, who alleged the OYO’s founder Ritesh Agarwal and two other company representatives of cheating and criminal breach of trust. The case was refuted by OYO.
Sources close to OYO claimed that in this case Karnataka High Court passed an injunction asking to stay criminal proceedings. However, there are several other troubles for OYO.
In August, Inc42 had extensively reported about the concerns of hotel owners and the continuous protests. At the time, independent protests by small hotel owners were being carried out in multiple Indian cities including Nashik, Pune, Kota, Manali, Jaipur, Ahmedabad and Delhi.
Hoteliers claim that the hospitality unicorn has cheated them of their promised returns and minimum guarantees by levying a slew of charges, often without informing them. Many of these charges are not specified in the contract between the owner and OYO, hotel owners that Inc42 spoke to, alleged.
At present, OYO along with MakeMyTrip and GoIbibo is under Competition Commission of India (CCI) scanner and is already facing the brunt of the US hoteliers as well. The latest criminal complaint is among many OYO’s legal team has to find answers for, however, it is hard to demerit the claims of hundreds of hoteliers.