Global travel technology company, OYO in a recent letter to National Company Law Tribunal (NCLT) requested the tribunal to expedite the Ministry of Corporate Affairs’ (MCA) investigation on the running of Federation of Hotel & Restaurant Associations of India (FHRAI) and make the same available to the public at large and the members of hospitality industry.
Recently the NCLT’s Principal Bench, New Delhi passed an order where it directed MCA to look into the affairs of FHRAI and examine if it conducts itself in a manner complaint with the provisions of Companies Act. The order also stated that this was necessary course of action due to a “series of litigation that is breeding due to conduct in the affairs of FHRAI”. The Hon’ble Tribunal also pointed out that “personal interest has come to loom over the functioning of FHRAI and this has to be curbed”.
The representation by OYO points out that the “present governing body members of the FHRAI, are running a deleterious and malicious agenda aimed towards ruining the interest of hotel industry at large, and creating hurdles and bottlenecks for new players in the market, who are posing a stiff challenge to the self-serving agenda of certain members of the FHRAI with vested interest.”
OYO, in its letter to NCLT, also talks about how this is worrisome development for the business environment of the country. “Various government machineries have launched a concerted effort to improve the ‘Ease of doing business in India’ and efforts are being made to make our country a more business friendly destination. It does not augur well for the business environment of our country when prominent start-ups, being universally acclaimed for their drive and innovation are the subject of such concerted and intimidatory tactics launched by the present committee of FHRAI, across multiple forums with the sole malicious intent to harm the hotel industry of the country, whose interest such organisations espouse.”
FHRAI was formed with the intent to promote the travel and tourism industry, however the recent allegations of unfair elections and mismanagement by Hotel & Restaurant Association of Northern India (HRANI) and Hotels and Restaurants Association of Western India (HRAWI), two regional chapters of FHRAI has highlighted vested interests of former office bearers. OYO’s letter recounts the findings and order passed by the NCLT’s Principal Bench which observes that, the object of the FHRAI is to promote the interest of hotels of various regions by encouraging and protecting the hospitality industry in India has been defeated due to petty squabbles time and again. Personal interest has come to loom over the functioning of FHRAI. Certain members of various regions of FHRAI are breeding litigation for personal reasons and we strongly disapprove of it. What encourages the parties to seek more terms of appointment, the position they seek to hold, and for objective is troubling this Tribunal. If there is no personal interest of members then the Federation should run smoothly. This is not happening as we see from facts as narrated earlier.
OYO in its letter to NCLT has questioned the functioning of FHRAI and has also urged to take appropriate action against the erring committee members.