In a blow to homestay aggregator Stayzilla, the Supreme Court has dismissed the appeal filed by co-founder Yogendra Vasupal challenging the insolvency proceedings ordered by the National Company Law Tribunal.
On September 18, 2017, the National Company Law Tribunal (NCLT) Chennai, Stayzilla to become insolvent and pay the outstanding dues to the tune of Rs 1.7 crore to JigSaw Advertising and Solutions. The Tribunal had observed that based on the facts and circumstances of the case and the submissions made by both the counsels, Stayzilla has defaulted in the payment of the outstanding debt to JigSaw along with interest. It then ordered commencement of the Corporate Insolvency Resolution process.
Speaking to The News Minute, Vasupal said that the Supreme Court observed that there was no written communication of the dispute and that Stayzilla’s reply notice communicating to Jig Saw of the dispute was not done within 10 days’ time.
“I think, I'll just have to pen it down as learning that no matter what or who record everything in written. I also dint have access to all the company mails in the last 3 months to dig and find more,” he said.
Reacting to SC’s decision, Aditya CS, CEO, JigSaw Solutions, who initiated the corporate insolvency proceedings against Stayzilla said, “Supreme court dismissed Stayzilla's petition earlier today. I stand vindicated. Wonder what the defaulters and their lobbyists will cry about now. To all those claiming deficiency of services, the highest court said there was none. You can wait for the resolution plan. A lot of interesting things will come up and there will be a lot of development apart from this that will expose many things. And whoever brought disrepute to my name and my business will pay the price for it.”
There is also a criminal case that was earlier filed that is proceeding parallel. The trial is stayed and awaiting a quash hearing, while Jig Saw wants to seek a vacation of stay.
As per NCLT’s order from September, the Interim Resolution Professional will take charge of Stayzilla’s management.
The order also prohibits Stayzilla from transferring, encumbering, alienating or disposing any of its assets. It is also prohibited from recovering of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor, which in this case is Stayzilla.
The Stayzilla issue dates back to February 24, 2017 when it suspended operations claiming that it will restructure itself and reboot operations.
Following this, Aditya claimed that the company did not pay him his dues to the tune of Rs 1.7 crore since January 2016 and filed a criminal case against Vasupal and CFO Sachit Singhi.
Vasupal was arrested on March 14. The night before his arrest, Vasupal had also put out a blog saying he was being harassed by his landlord and by Jig Saw Solutions. Voodoo dolls were allegedly sent to the CFO's house.
The battle, which started with Vasuapl’s arrest and his claims of being harassed by Aditya, got ugly after Aditya publicly put out what he claimed was proof that the company owed him Rs 1.7 crore.
After Vasupal received bail a month later, he then furnished proof of Aditya cheating them with photoshopped pictures as proof of delivery for Stayzilla’s advertising campaign.