In a statement issued today, the Internet and Mobile Association of India (IAMAI) has strongly urged the Tamil Nadu Government to release Yogendra Vasupal, Founder & CEO of Stayzilla and withdraw the FIR against him. As has been explained by Mr. Vasupal himself, there was no personal fraud involved with this case and this was a corporate matter and he had only signed on behalf of Stayzilla. Therefore, prima facie, it seems that a criminal FIR against him is not tenable.

According to IAMAI, such a criminal case against a signatory of a corporate private limited company for a corporate liability is unprecedented and unheard of. Previously, for similar cases such as the one involving ‘Askmebazaar’ the founder was not criminally charged as an individual. If this becomes a norm, then the start-up ecosystem in India will suffer and the Government of India’s vision of ‘Start-up, Stand-up’ vision will take an enormous hit.

IAMAI has stated that, in this case, prima facie, Chennai Police has deliberately acted in bad faith by resorting to legal overreach.

Prima Facie, Stayzilla has defaulted on genuine payments due to another start-up. Such defaults by large funded companies hurt the startup ecosystem equally badly. IAMAI appeals to Stayzilla management and investors to make full and final settlement to this and other service providers. If both parties are willing, IAMAI can provide a neutral platform for out of court settlement.