Rajasthan HC Flags False Claims By Samskara Resort, Grants Relief To OYO

A single judge bench of the Rajasthan High Court has granted interim protection from coercive action to hospitality major OYO in a case that alleged the IPO-bound company inflated its earnings by showing fake bookings of a resort.

The incident resulted in an INR 2.66 Cr GST notice being served to the Samskara Resort located in Jaipur.

However, in a statement to Inc42, OYO said that in its ruling, the Rajasthan HC expressed concern over “misleading and factually incorrect” claims made by the resort against Ritesh Agarwal-led company in the GST liability case.

“The court observed that Samskara Resort failed to furnish critical information such as check-out records, blocked room data, and a copy of the operational agreement—facts material to the case. It appears that the resort owner is attempting to deflect attention from tax-related concerns, particularly issues related to GST compliance,” OYO said.

The court was hearing a plea by OYO seeking quashing of the FIR filed by Samskara Resort against it.

 Last week, Madan Jain, director of Samskara Resort, lodged an FIR against OYO for alleged cheating, criminal breach of trust, forgery and criminal conspiracy against them under the Bharatiya Nyaya Sanhita (BNS).

During the hearing, Justice Praveer Bhatnagar observed that it was, in fact, Samskara that failed to provide the booking sale register, agreement and other documents, showing lapses on their part, according to OYO.

The court has sent a notice to Jain and directed the police to submit a status report within two weeks.

The next hearing in the case is scheduled after three weeks.

“The hon’ble court also acknowledged that the FIR in question was unwarranted and unfair. OYO’s records clearly show that a significant portion of the bookings at the property were walk-ins, likely recorded directly by the hotel’s own staff during the contract term with OYO,” said advocates representing OYO, RB Mathur and Lipi Garg. 

Meanwhile, OYO has also filed a defamation case against the Jain in the Delhi High Court, the advocates added.

As per the FIR filed by the resort, it signed an agreement with OYO in 2019 for 12 months and recorded business transactions totalling INR 10.95 Lakh during the period. The resort claims to have paid GST dues for the same. 

However, OYO allegedly showed bookings worth  INR 22.22 Cr between financial years 2018-19 (FY19), FY20 and FY21 with Samskara, for which the GST bill of INR 2.66 Cr is still pending, apart from penalty.

This comes a day after a OYO denied allegations levelled by Samskara. 

“The hotelier is deliberately attempting to shift focus from his own GST liabilities by falsely implicating OYO. Our records clearly show that a significant portion of the bookings at the property were walk-ins, likely entered directly by the hotel’s staff during the contractual period,” a company spokesperson said.

“This entirely disproves the baseless allegation of fake bookings. OYO has had no business association with this hotel for (the) last 3-4 years. We are confident that the misleading FIR will be quashed in due course,” they added.

As per founder Ritesh Agarwal, OYO is likely to record a 60% year-on-year (YoY) jump in its revenue to INR 2,100 Cr in the last quarter of FY25.

The company turned profitable in FY24 after recording a net profit of INR 229.5 Cr during the year, against a net loss of INR 1,286.5 Cr in the previous financial year. Meanwhile, its operating revenue remained flat at INR 5,388.7 Cr in FY24, a decline of 1.3% from INR 5,463.9 Cr in the previous fiscal year.