A day after Yogendra Vasupal, co-founder of online home stay aggregator Stayzilla approached the Principal Session Court Chennai seeking bail, the prosecution on Tuesday “strongly” opposed the application noting that the accused has committed a clear case of cheating (section 420 of IPC).
“This is a clear case of breach of trust, the complainant has rendered advertisement services to the accused believing that he would promptly pay the charges, but the accused has exploited the trust of the complainant by cheating him,” the City Public Prosecutor M.L. Jegan said.
On March 14, the Central Crime Branch (CCB) police arrested Mr. Vasupal based on a complaint from C.S. Aditya of Jigsaw Advertising and Solutions Private Limited for offences under sections 406 (Punishment for criminal breach of trust), 420 (Cheating), 506 (i) (Criminal Intimidation) of the IPC. According to the complainant, Stayzilla had failed to make payments for advertising services rendered by him since February 2016 and has defrauded him of ₹1.69 crore.
In addition to the opposition made by the prosecution, counsel for the complainant contended that the accused had closed down the registered office of the company in the city. “The Companies Act mandates that every creditor must be duly informed before closing the registered office of a company registered under the Act. But Mr. Vasupal had failed to do so, which clearly establishes his intention to defraud the creditors,” the counsel said.
Denying the contention of the accused that this is a civil dispute, the complainant said, the invoices dates back to 2016, till the date of Mr. Vasupal’s arrest on March 14 the bills were never disputed. “It was only after his arrest he is disputing the bills, so as to give a civil colour to the issue,” he said.
Asserting that the company – Stayzilla – cannot be treated as a ‘startup’, the complainant said, “The firm was established in 2005. It has been in existence for almost 12 years. But they still claim to be a startup. So far they have received Rs. 87 crore as investment. On February last, a board meeting of the company was convened in which all other directors except the founding members resigned. Immediately after the meeting the company has been closed down.”
Pointing out that the second accused in the case is still absconding, the complainant sought the court to let the accused on bail till his dues are settled. Earlier, senior counsel B. Kumar appearing for the accused reiterated that the dispute is civil in nature and that criminal cases has been foisted as a pressure tactics.
“The oral agreement between the complainant C.S. Aditya of Jigsaw Advertising and Solutions Private Limited and Mr. Vasupal dates back to 2014. Since then various invoices totalling to Rs. 8.50 crore were raised out of which Rs. 6.8 crore has been already paid. The pending is Rs. 1.69 crore which includes the disputed invoices amounting to Rs. 1.44 crore,” Mr. Kumar said.
Assuring that the petitioner is ready to pay the balance Rs. 25 lakh within two weeks if released on bail, the counsel contended that the petitioner has not closed down the company, but the business model. “He has all intention to start a new and more profitable business model under the same company. The company still has receivables about Rs. 7 coroe and it cannot be closed down easily without initiating winding up process under the Companies Act,” he added.
Noting that the petitioner is already under judicial custody for 14 days and even was given one day custody to the Central Crime Branch, Mr. Kumar said, “The police has not sought any further custody and grave injustice would be rendered to the petitioner if not enlarged on bail.” Meanwhile, an application seeking anticipatory bail for the second accused Sarjit Singhi was also field in the court.
Recoding the submissions, the Principal Sessions Judge M. Nazir Ahamed passed over the pleas for passing orders.
