National Company Law Appellate Tribunal (NCLAT) has dismissed an appeal by home-stay startup— Stayzilla, against the insolvency process order by National Company Law Tribunal (NCLT).
A three-member bench of SJ Mukhopadhaya, AIS Cheema and Balvinder Singh said that it did not find any merit in the company's appeal and ordered dismissal, Business Standard reported.
Earlier, one of Stayzilla's founders, Yogendra Vasupal, had argued that there was a dispute and therefore the application under section 9 of the 'I&B Code' was not maintainable.
But the NCLAT bench found that the document preferred by Jigsaw Solutions, who initiation the insolvency proceedings against Stayzilla, was complete.
"As we find that there is no specific objection made by Stayzilla in writing, raising any dispute with regard to the quality of services as claimed to have been rendered by Jigsaw, no dispute can be raised at the stage of submitting reply under subsection (2) of Section 8 of the I&B Code," the business daily quoted the court order.
Earlier on September 15, NCLT's Chennai bench had admitted the insolvency process against the Bengaluru-based startup on a petition filed by city-based advertising firm Jigsaw Solutions.
Jigsaw Solutions argued that as the firm failed to repay its dues for the job undertaken, Jigsaw Solutions demanded Stayzilla to liquidate. Stayzilla had appointed Jigsaw Solutions to do outdoor and bus-shelter publicity for the debt-ridden startup.
The NCLT bench had then appointed Karthigeyan Srinivasan as interim resolution professional (IRP) and ordered to complete the proceedings within 180 days.
Countering the argument, the counsel for Stayzilla submitted that there were deficiencies in the work done by the vendor and accused Jigsaw of creating fake invoices to raise bills.
One of the co-founders of Stayzilla, Yogendra Vasupal, was earlier arrested and was in prison for almost four weeks.
