Stayzilla case: NCLT orders insolvency proceedings

Septmber 19, 2017
ENS Economic Bureau

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.
Stayzilla counsel 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 NCLT, 5 months after Yogendra Vasupal, co-founder & CEO of Stayzilla was granted bail by Madras HC in a case filed by the company alleging default of payment. Jigsaw filed a petition requesting for initiation of insolvency as an operational creditor under section 9 of the IBC 2016 against Inasra Technologies.

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