Blow for Stayzilla's Vasupal as SC dismisses plea against insolvency order

A division bench of the Supreme Court has dismissed the civil appeal of Yogendra Vasupal, the founder of online accommodation aggregator Stayzilla, challenging insolvency proceedings ordered earlier by the National Company Law Tribunal (NCLT). The case relates to a payment-related dispute between Vasupal and Stayzilla’s vendor Jigsaw Solutions.

NCLT had earlier issued an order initiating a Corporate Insolvency Resolution Process (CIRP) and appointed an Insolvency Resolution Professional (IRP). And, the National Company Law Appellate Trinunal (NCLAT) had dismissed Stayzilla’s appeal against this.

According to information published on the Supreme Court website, the civil appeal filed against Jigsaw by Vasupal and the IRP appointed by NCLT had been “disposed as dismissed on March 21, 2018” by judges Adarsh Kumar Goel and Rohinton Fali Nariman.

Jigsaw, which was initially appointed by the company to handle advertisement-related activities, including at highways and airports, filed an application against Inasra Technologies Pvt Ltd, which owns Stayzilla, for a default in payment of outstanding debt to the tune of Rs 16.9 million, along with an interest at 18 per cent a year.

An online aggregator of hotels and homestays, Stayzilla is funded by investors including Matrix Partners and Nexus Ventures. The company had in February 2017 said that it was suspending operations and would reboot with a different model.

The next month, the police arrested Vasupal on Jigsaw’s complaint under a criminal procedure, following which hundreds of entreprenuers sought that he should be released. Later, he was released on bail and the vendor approached the NCLT and received a favourable order.

While his investors offered to settle the disputed amount with Jigsaw, Vasupal declined a settlement, saying cash was never a constraint in this case, and that it was more about principles. He alleged that Jigsaw had forged proofs related to the advertisement campaign and not submitted the proof his company had sought.