The Supreme Court has given an interim order of status quo in an appeal against the insolvency proceedings of hotel and homestay aggregator Stayzilla, freezing the insolvency resolution process (IRP) ordered by the National Company Law Tribunal (NCLT). The development, experts say, marks a crucial juncture in the winding-down narrative of the ‘controversial’ homestay and hotel aggregator.
Hearing the appeal filed by Stayzilla founder Yogendra Vasupal on Friday, a two-judge bench at the apex court granted a week’s time to respond for advertising vendor Jigsaw Solutions — which had gone after Vasupal for disputed dues of Rs 1.7 crore — and a week’s time for a rejoinder before listing the case for further hearing. Till then, both parties have been ordered to maintain status quo.
Earlier, in a case filed by Jigsaw with the NCLT-Chennai, the court had found that Stayzilla had defaulted in paying back dues, initiating a 180-day IRP to be spearheaded by a professional. After a dismissal at the National Company Law Appellate Tribunal (NCLAT), Vasupal had approached the Supreme Court recently.
Samratt KR, one of the counsellors for Vasupal, said: “Our case rests on the ground that the presence of a pre-existing dispute, unresolved and pending a criminal case, erodes the necessity for the implementation of the Insolvency and Bankruptcy Code (IBC).” Senior advocate Arvind DatarBSE 0.00 % had appeared for Vasupal.
The ‘pre-existing dispute’ that burst on to the startup scene was weeks after Vasupal declared in February this year, through an online post, that he was suspending operations and working on a reboot of Stayzilla. Soon after, based on a complaint from Jigsaw, Vasupal was arrested by the police on counts of cheating, a day after an FIR was filed.