A Chennai court has turned down the bail plea of Yogendra Vasupal, co-founder of the now-defunct homestay startup Stayzilla, in an alleged case of non-payment of dues to a vendor.
The Special Metropolitan Magistrate Court observed that "bail cannot be given at this moment since a police custody application is pending".
Vasupal, who has been in custody for 10 days now, will continue to be remanded in Chennai's Puzhal Central Prison. He and co-founder Sachit Singhi are the first and second accused in the case, respectively.
Rupal Yogendra, Vasupal’s wife and co-founder of Stayzilla, told VCCircle that his lawyers were discussing the next steps. People close to Vasupal indicated that the lawyers may move higher courts.
Vasupal's family and friends recently posted a blog on Medium titled “How did a civil matter become criminal?â€, wherein they said it was a matter of disputed invoicing with the vendor for non-performance of services.
Vasupal was arrested on March 14 by the Chennai Police on charges on non-payment of dues to advertising agency Jigsaw Solutions.
The development came barely weeks after Stayzilla shut down its operations last month.
Meanwhile, entrepreneurs and investors across India have taken to Twitter demanding Vasupal’s release and condemning the alleged bullying he has been meted out with. Several have criticised his arrest, saying criminal complaints against startups shutting shop will be unhealthy for the ecosystem. The hashtag #ReleaseYogiNow was trending on Twitter last week.
In a blog post on Medium, Vasupal has written about the ordeals that he and Singhi had been facing over the past few weeks. Rupal Yogendra said he wrote the blog titled ‘Help! I need everybody’ before he was arrested.
Vasupal wrote his version of two developments. “The first case is against a politician who was our landlord. We have video and audio proof of an assault and then a verbal threat to kill. The second case is against us from a media agency with whom the company had a dispute over deficiency of services and to whom we had asked to take it up in court.â€
He added, “I have realised that while we all want India to Start-up and Stand-up, the regulatory framework + corruption (sic) does not let one pick up after they fall. Instead it works overtime to bury them.â€
Stayzilla had raised close to $30 million in funding, including an undisclosed amount in Series A from investors including Nexus Venture Partners and Matrix Partners, according to data from VCCEdge, the data platform of News Corp VCCircle. In February 2015, it raised $15 million in Series B funding led by Nexus Venture Partners.
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