The bail appeal of Yogendra Vasupal, one of the co-founders and chief executive of homestay aggregator Stayzilla, was dismissed today by a special court in Chennai. The Chennai police had arrested Vasupal on March 14, following a complaint from Jigsaw advertising agency, who said Stayzilla had not paid the company its dues of over Rs 1.56 crore for the services rendered.
Judge MM Kabir of the Special Metropolitan Magistrate court for CCB-CBCID cases denied the bail saying "a police custody application" was pending, the Economic Times reported. He has been in judicial custody for nine days.
The Chennai-headquartered hotel and homestay aggregator that had cumulatively raised $34 million (about Rs 220 crore), shut operations on February 23 this year.
On the day of his arrest, in a blog post, Vasupal had claimed that his former landlord sent him death threats (presumably for not paying rent) and also elaborated on Stayzilla's dispute with its media agency (Jigsaw) and going by what he said, it looked like some people tried to intimidate the members of the founders' families.
Since then some of the investors in Stayzilla, who had lost their money, appealed for his release. Sections of the media, who focus exclusively on the start-up world, also started a campaign on Vasupal's behalf. In fact, startup headsand many techies had written a letter to Home Minister Rajnath Singh criticising the manner in which Vasugpal had been arrested.
"If ever there's a right to be an entrepreneur, that's clearly been violated. Period. The question is not how this will affect entrepreneurship today, but how young Indians looking to become entrepreneurs in the future will give up even before starting up," mentioned the letter.
Raising concerns over the issue, the letter further mentioned, "You can find as many technical flaws and loopholes about a client-vendor contract (which by the way can be contested in the long term), and go roundabouts regarding how "an innocent" vendor was forced to abuse, intimidate and even send voodoo dolls with the picture of entrepreneur's kids".