Police File FIR Against OYO and Ritesh Agarwal in Jaipur Over Alleged Fake Bookings

In a new legal development, an FIR has been filed against OYO, the popular hotel booking platform, and its founder Ritesh Agarwal in Jaipur over allegations of fake bookings that reportedly led to a massive ₹2.66 crore GST notice. The case has sparked concerns about the company’s practices in the hospitality industry.

Complaint Against OYO’s Alleged Practices

The FIR was lodged at Jaipur’s Ashok Nagar police station following a complaint filed by Madan Jain, the owner of Samskara Resorts, which had partnered with OYO. According to the complaint, OYO inflated Samskara Resort’s reported turnover by showing fake bookings, some of which were allegedly made during periods when no official agreement existed between the two parties.

Samskara Resorts had entered into a 12-month agreement with OYO, which commenced on April 18, 2019. The resort claims that during this period, it only received bookings worth ₹10.95 lakh through OYO and paid GST based on this figure. However, OYO reportedly reported bookings amounting to ₹22.22 crore, leading to the GST department issuing a notice for unpaid taxes and penalties of ₹2.66 crore.

Allegations of Fake Booking Reports

The complaint further states that OYO recorded bookings for Samskara Resort in the financial years 2018-19, 2019-20, and 2020-21, even though no contract existed between the two parties during those years. The resort alleges that this manipulation led to the inflated turnover and, ultimately, the demand for a substantial tax payment.

Legal Action and Charges

The FIR names OYO (officially known as Oravel Stays Pvt Ltd), founder and CEO Ritesh Agarwal, and several others involved in the operation. They face charges of cheating, criminal breach of trust, forgery, and criminal conspiracy under the Indian Penal Code (IPC).

Allegations of Widespread Inflated Billing Practices

This case is not an isolated incident. According to reports, OYO has been accused of similar practices by other hotels as well. Husain Khan, President of the Hotel Federation of Rajasthan, claimed that approximately 20 hotels have received GST notices based on inflated bookings generated by OYO. Khan pointed out that OYO has had a history of disputes with hotels in the region, citing a previous campaign where 125 hotels displayed banners saying, “We are not accepting OYO bookings,” in protest of the company’s actions.

OYO’s Past Legal Issues

The hotel giant has faced controversies in the past concerning its business practices. In 2021, the company was criticized for its terms of contracts with hotel owners and its alleged role in generating inflated bills. This new FIR adds to the growing concerns about OYO’s relationship with its hotel partners and its business transparency.

Ritesh Agarwal and OYO’s Response

As of now, OYO has not issued an official statement in response to the allegations. However, the company has historically maintained a strict stance on compliance with tax laws and regulations. The ongoing legal proceedings may impact the company’s reputation and its operations in India.

Impact on the Hospitality Sector

The case underscores the growing challenges and scrutiny faced by large platforms in the hospitality industry. With several hotels and resorts raising concerns over their dealings with OYO, it remains to be seen how the company will address these issues and what the legal consequences will be.

The case is still under investigation, and authorities are expected to examine the details of the reported inflated bookings and the broader implications for the hospitality industry in India.

Sources By Agencies

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