Stayzilla founder Yogendra Vasupal's bail petition rejected

Vasupal was arrested after a vendor complained that dues of Rs 1.69 cr were not paid by the company

A bail petition by Stayzilla founder Yogendra Vasupal was rejected by a court here, even as his co-founders continued to campaign for intervention by entities in the segment and the government to secure his release.

Vasupal, founder of the online accommodation aggregator, was arrested on March 14 on a charge of cheating, after a vendor complained that dues of Rs 1.69 crore were not paid by the company that had also suspended its operations.

A metropolitan magistrate dismissed the bail petition even as Vasupal's counsels argued it was a civil case and criminal charges were foisted to put pressure on him.

On Wednesday, business bodies had supported Vasupal and sought intervention of the government. S Gopalakrishnan, chairman of the Start-Up Council of the Confederation of Indian Industry and Ravi Gururaj, executive council member of Nasscom, the software sector's apex association, said there was an immediate need to lay guidelines on business closures.

Start-ups had, they said, become a growth engine of innovation for India and the Prime Minister's 'Startup India' call had given a boost to the youth and their entrepreneurial dream. "The company is still active. Criminalising a person who was solely and earnestly working towards these closures has blocked the path for everyone else, for selfish reasons. It is not only hurtful to Stayzilla's existing partners but demoralising for entrepreneurs," went a blog on behalf of Vasupal.

Jigsaw Advertising and Solutions had made the cheating complaint to the police. Sachit Singhi, one of Stazilla's three founders, wrote an e-mail to its investors on the evening of March 14 that Vasupal was missing and last seen in a police station. After this, around 300 entrepreneurs, including former Infosys board member Mohandas Pai, Paytm founder Vijay Shekhar Sharma and Ola Cabs co-founder Bhavish Aggarwal, in a letter to the Union home minister, sought justice for Vasupal. They expressed concern at the manner of arrest and alleged harassment by officials.

Stayzilla decided to halt operations in February and said it was looking at a different business model.

"All Yogi wanted was a complete restructuring of Stayzilla and had begun discussion with prospects in the accommodation and tourism space. He even attended a travel summit in Delhi in the 2nd week of March to begin discussions on the reboot. He was in the process of liquidation of assets that were not generating revenue and focus on vehicles which had a good opportunity in the current system. The company was also in the parallel process of collection from debtors and other payoffs," wrote its co-founders in a blog.

The company has raised $34 million in four funding rounds from Nexus Venture Partners and Matrix Partners.