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A legal source connected to the litigation said that an appeal has been moved with the Principal Sessions Court in Chennai today against the decision of a special court for Metropolitan Magistrate, CCB-CBCID cases.
Vasupal, the founder of the online accommodation aggregator was arrested on March 14 on charges of cheating after a vendor complained that dues of over Rs 1.69 crore were not paid by the company that suspended its operations.
On Thursday, a Special Metropolitan Magistrate dismissed the bail petition of Vasupal and granted a day's custody to the Central Crime Branch. His counsels argued that it was a civil case and criminal charges were foisted to put pressure on him.
A blog on behalf of Vasupal posted by his family and friends refuted various allegations raised against the founder including that the founders siphoned money from the start up.
"Company is still active. So criminalizing a person who was solely and earnestly working towards these closures has blocked the path for everyone else for Aditya's selfish reasons. It is not only hurtful to Stayzilla's existing partners but also demoralizing for entrepreneurs across," a blog on behalf of Vasupal said.
On Wednesday, industry bodies had united behind Vasupal and sought intervention of the government to secure his release. Leaders of various industry bodies including CII Start Up Council Chairman Kris Gopalakrishnan, Nasscom Executive Council Member Ravi Gururaj has said that there is an immediate need to lay guidelines on business closures.
In a statement, they said that start-ups have become the growth engine of innovation for India and the Prime Minister's vision for Startup India has given a tremendous boost to the youth of the country and their dream to be an entrepreneur.
A vendor Jigsaw Advertising and Solutions complained to the police that Stayzilla had cheated to the tune of Rs 1.69 crore. Sachit Singhi, one of the three founders, March 14 evening wrote an e-mail to the investors that Vasupal is missing and was last seen in a police station. Various entrepreneurs running start ups and investors extended their support to Vasupal following this.
Over 500 entrepreneurs including former Infosys board member T V Mohandas Pai, Paytm founder Vijay Shekhar Sharma and Ola Cabs co-founder Bhavish Aggarwal, in a letter to Union Home Minister Rajnath Singh which was published in help-yogi.com, has sought justice for Vasupal. The founders expressed their concern on the manner in which Vasupal was arrested and the alleged influence including harassment by the concerned officials in Chennai.
StayZilla decided to halt operations in February and said it was looking at a different business model.
"All Yogi wanted was a complete restructuring (reboot) of Stayzilla and had begun discussions with prospects in the accommodation and tourism space. He even attended a travel summit in Delhi in the 2nd week of March to begin his 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. Company was also in the parallel process of collection from debtors and other pay offs," wrote co-founders in the blog.