The NCLT bench, comprising Mohd Shariff Tariq, member judicial, and S Vijayaraghavan, member technical, appointed Karthigeyan Srinivasan as interim resolution professional (IRP) and ordered completion of the process within 180 days.
The Chennai bench of National Company Law Tribunal (NCLT) on Monday ordered commencement of corporate insolvency resolution process against the beleaguered home-stay start-up Stayzilla on a petition filed by city-based Jigsaw Solutions. The NCLT bench, comprising Mohd Shariff Tariq, member judicial, and S Vijayaraghavan, member technical, appointed Karthigeyan Srinivasan as interim resolution professional (IRP) and ordered completion of the process within 180 days. NCLT had reserved orders in the insolvency case filed against Inasra Technologies, which runs Stayzilla, by Jigsaw Solutions after hearing the both parties on September 12. The counsel for Jigsaw Solutions had argued that it was seeking the unpaid dues for the job undertaken by demanding dissolving of the troubled home-stay start-up. The company was hired by Stayzilla to do outdoor and bus-shelter publicity for the latter.
Countering the argument, the counsel for Stayzilla submitted that there were deficiencies in the works done by the vendor and accused Jigsaw of creating fake invoices to raise the bills. NCLT in the Monday’s order, however, said from the facts and circumstances of the case along with the submissions made by the counsels, the corporate debtor (Stayzilla) has committed the default in making the payment of outstanding debt along with interest as claimed by the operation debtor (Jigsaw). Jigsaw Solutions had moved the NCLT, five months after Yogendra Vasupal, the co-founder & CEO of Stayzilla was granted bail by Madras HC, post spending close to a month in jail, in a case filed by the company alleging default of payment.
Jigsaw, an advertising agency, run by C S Aditya filed a petition requesting for initiation of corporate insolvency as an operational creditor under section 9 of the Insolvency & Bankruptcy Code 2016 against Inasra Technologies. Jigsaw has submitted before the NCLT that Stayzilla engaged the company for various advertisement campaigns at different geographical locations through baggage tags, billboards and bus-shelters. The services were provided based on the purchase orders and invoices were raised and Stayzilla was bound to make a total payment of `1.69 crore, along with contractual rate of interest at 18% per annum.
Jigsaw further argued that the same had not happened in spite of the demand notice given on May 8, 2017. However, Stayzilla alleged fraud and forgery of documents against Jigsaw for making bogus claim. It has been argued by Stayzilla that there was no legitimate dues, much less unpaid operational debt as stated in the demand notice. Trouble for Stayzilla started when Chennai Crime Branch arrested Vasupal on March 14, based on a complaint file by CS 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 to the tune of Rs 1.7 crore. Opposing the case, the Vasupal camp maintained that the criminal charges foisted against him were part of pressure tactics to settle a civil dispute. Based on Aditya’s complaint, CCB registered a case against Vasupal and his partner Sarjit Singhi for offences under Sections 406 (Punishment for criminal breach of trust), 420 (Cheating), 506 (i) (Criminal Intimidation) of the IPC. Stayzilla had raised close to $ 30 million in funding so far, besides an undisclosed amount in its Series A round, from investors including Nexus Venture Partners and Matrix Partners. In February 2015, it raised $15 million in Series B funding led by venture capital firm Nexus Venture Partners, with participation from existing investor Matrix Partners India.