StayZilla CEO Yogendra Vasupal arrested; says corruption in India does not let failed startups pick up

Sainul Abudheen

Yogendra Vasupal says the current regulatory framework and corruption in India does not let startups pick up after they fall; instead it works overtime to bury them

Yogendra Vasupal, Co-founder and CEO of online home-stay startup StayZilla, which recently shut operations, was arrested by the Chennai police over charges of defrauding slapped by advertising agency Jigsaw Advertising, says an Economic Times report.

He is currently lodged in a prison in Chennai, according to this report.

Meanwhile, Vasupal’s wife and StayZilla COO Rupal Vasupal alleged that the charges slapped against him are fabricated. In blog post titled ‘Help! I need everybody…’ on, which was posted by Rupal just before his arrest last night, Vasupal said the charges against him are fabricated. 

Vasupal also said that the current regulatory framework and corruption in India “does not let one pick up after they fall. Instead, it works overtime to bury them”.

“I want to bring to light the problems that me and Sachit (Co-founder Sachit Singhi) are facing. We are also seeking any help that you have to offer. I had announced that Stayzilla will be rebooting its operations on Feb 23rd. While things are progressing well with respect to the reboot (more on that later), I have realized that while we all want India to Start-up and Stand-up, the regulatory framework + corruption does not let one pick up after they fall. Instead it works overtime to bury them,” he said in the article.

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“Here are the facts on 2 cases. The first case is against a politician who was our landlord. We have video and audio proof of an assault and then a verbal threat to kill. The second case is against us from a media agency (apparent reference to Jigsaw Advertising) with whom the company had a dispute over deficiency of services and to whom we had asked to take it up in court. The stark difference in the approach taken by the police in these 2 cases should tell you something important,” he added.

Vasupal said that they had been working out of its office in Bangalore for roughly a year. When they got to know in end of January that the next three to five weeks was going to be touch and go, they thought it would be better to sit down with the landlord and explore various options and prepare for contingencies.

“Landlord assaulted us”

“In the initial meetings I had to bear a lot of verbal insults of being called a failure multiple times and how a failing company is destroying the reputation of his building. I ignored all those repeated insults to find any common ground with the Landlord. Over multiple meetings he started getting even more agitated demanding immediate payment (for which he had accepted a post dated cheque of March 7th) and became violent. He assaulted my admin staff in front of me threatening to kill him with the revolver in his car,” he said. (See the above video)

“After this assault I got to know from my admin team that he has been a regular source of trouble for them with him insulting and accosting them at every turn. In fact the smoking area in the company was moved from the ground floor (adjacent to the bike park) to the terrace because he used to pass comments on any women staff who took their breaks there,” he remarked.

StayZilla Co-founder and CEO Yogendra Vasupal

StayZilla Co-founder and CEO Yogendra Vasupal

Unfortunately, this was brought to his attention almost towards the end, he said. He was not able to find any CCTV footage beyond a month old and proceed in the right legal manner. So, decided to pursue the latest assault instead of ignoring it through the right legal means. “The key reason was the fact that this was a perennial problem and the behaviour I had witnessed was not a one-off thing. All of us after all make mistakes once in a while.”

He then went to the nearby police station with his complaint and evidence to register his case. After trying to persuade the in-charge to take the case, he returned with only a promise that the complaint would be heard by a senior police official.

He went the next day in the morning at 9:30 am. The police filed an FIR by 2 pm after they learnt that Vasupal had video evidence of the assault and that the media had started getting interested in it. “I assured them that I am after justice and not revenge and that if an FIR was filed, I would like to quietly have the matter resolved by them while me and my team were protected,” he said.

“Just as the FIR was filed, I found out that the landlord had returned with a lot of his folks roaming in front of the office in bikes and on feet. I again had to escalate the matter to a senior official to get them out of the office because everybody in the police station still refused to do anything about it. Keep in mind the FIR was already filed by then. The senior officer was informed by my Lawyer that he would inform the media and have a reporters with TV cameras at the office with in 1 hour. The senior officer acted fast and got 2 flying squads to the office to contain the Landlord,” he went on.

Vasupal further said when he got to the office he found 10 police men there to protect them. Almost four of them inside with the landlord, and the remaining outside. The landlord was comfortably seated and the policemen were pleading with him to leave the premises, which he did after two-and-half  hours of cajoling, Vasupal alleged.

“I thanked the police and told them that I understood their compulsion. I also asked them to tell me honestly if the FIR was enough to protect me or if I should look at other alternatives like going to the public. I was assured that there would not be any problem further. My lawyer, on the other, hand suggested we should take an injunction from the court against him or any of his persons entering into the premises. It made sense to me to seek the protection of the court looking at how helpless the police seemed to be and we got our injunction. In parallel we also sent a notice that we are vacating and asking for our deposit back,” he explained in the article.

Almost a month later, on March 9, two police officials from Bangalore came to Vasupal’s home in civil dress and said he was wanted in the police station for questioning. Vasupal called his attorney immediately, who informed him he did not have to proceed unless there was a court summons or warrant.

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“I got back to the cops whom I seated at my home and informed them of the same. I then asked them for more information on the reason they wanted me. I was told that there is a case against me by somebody from Chennai for cheating, intimidation and etc. I recognised the name of the complainant and informed them that there was a dispute between (the) two companies and we had asked the other company to take it up in the court. I don’t personally owe anybody money and I am wondering how can they get confused on such a basic matter as this was a clear civil case. I also pointed out that we have been asking the other company to take it to court if they felt they were wronged as we felt within our right. I also pointed out that my company is also owed close to INR 7 crore (US$1 million) from various debtors, but I am not going around filing false criminal cases against them,” he elaborated.

Vasupal was then made to speak with the inspector who told him that until now they had not filed a complaint or registered an FIR at that point and asked him come to the police station. Vasupal told him that this complaint was filed in Chennai already and that his lawyer had interacted with the police in Chennai and apprised them of the whole matter and about the bogus nature of the complaint. “I also informed him that we have been verbally threatened on call multiple times by owners of that company. And that I didn’t understand why I had to go to 2 stations in 2 different states for the same case.”

He continued: “The Inspector then lay down the line stating that sending mufti policemen was the first way, the second way was that they will file an FIR and send uniformed policemen and have me arrested and jailed. After being taken aback for a split second, I realized that as long as I fear going to the Jail, I will always succumb to baseless threats. I then told him if it was my fate to go to jail, I will. Post which I will win this baseless case in court and prove him wrong. Ended the call with that.

The mufti policemen at home were still trying to convince me to go to the station to respect the their superior’s wishes (“after all we are all in the same locality and will keep seeing each other” said one). I learnt that the Inspector from the Chennai police station was there at the Bangalore station and was the source of the complaint. I was shocked. Just the previous night my Lawyer had stated to me that he had met the Chennai Inspector over the weekend and that he had guided my lawyer to respond to the false complaint first and then provide our complaint on the threats and harassment from the owners of the media agency. My lawyer was asked to bring the draft response on the following Monday to settle the matter — 13th March — as the Inspector was taking a personal trip for 2 days. That’s when I realized that things are not neutral as the Inspector had communicated one thing to my lawyer while doing something else and was acting in bad faith.

The same day policemen went to Sachit’s house asking for him, went to my home over the weekend asking for myself. When my parents or his parents asked for the reason, they said that there was some complaint and that they did not know what it was about. My father lost it and asked them how they could be looking for a person with no knowledge of what they were looking for, or if they were just trying to create nuisance.

We immediately asked his wife and kids to my home. Eight hours later they were safe with us. In the meanwhile, our lawyer got his known colleagues in Chennai activated and the next Monday (Feb 27) we went there to handle this (while giving this interview on the same day). We met up with the lawyer and he advised us that he would first go to the station to understand the case and then call us there. He finally managed to meet the Inspector only on Sunday as he was also busy with other things.

On Sunday, I got to know that the complaint filed against us had false accusations like Sachit going to the vendor’s office to threaten with two henchmen of some MLA. That I used to call him and threaten him of dire consequences if he pursued the matter. I laughed and said I had never spoken to him and would love for him to get any call records proving the same. And that Sachit was the one who was threatened by people visiting office and on call. We even had the CCTV footage of those henchmen coming to our office. At that point I thought that this vendor was smart to have used his illegal actions as the template of his complaint against us. Now in hindsight, with the bad faith shown, I am not sure if it was the vendor who was smart or was he being guided by the Inspector/higher ups to protect himself better.

The same day, my lawyer gave the gist of the case outlining that this was between 2 companies (where Stayzilla had already paid over 80% over a period of 3 years, where cumulative amount paid is 6.5 Crore Rupees) and that the dispute began with a “severe deficiency of services” and we have repeatedly asked the other party to go to court if they felt there was any wrong. It was also pointed out that the Pvt Ltd company had certain protections offered in terms of these kind of cases. Further the call recording of the vendor and his family threatening Sachit and his family was also shared. My lawyer walked away with the impression that the Inspector was professional and that it made sense to work with him to close the case and followed his instructions to first close this case before filing the real case of threat, intimidation, outraging the modesty of women next.

It is curious that after giving that advice and before our response could be perused, he came to Bangalore to pursue this further. In fact when my lawyer in Chennai got to know that the Inspector was there in Bangalore, he tried reaching the Inspector multiple times through unanswered calls.”

He also observes that he has always quietly felt that all knowledge/IT/BPO workers in Bangalore are only looked at as a source of revenue which can be gotten by shaking them down. This is across all government departments.

“This is while we pay and bring in the bulk of the taxes to the city. We have no one to blame except our own apathy. A politician who is not in power and with an FIR filed with irrefutable proof is molly cuddled and to this day has not been taken in. While even a false case from a party who threatens brothel cases is enough to get us to the threatened with an open arrest. We need to organize and get across the message that we won’t put up this.”

When contacted this morning, Vasupal’s sister Lavanya told e27 that she was going to meet his senior counsel for a bail application.


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