Entrepreneurship is being encouraged today throughout institutions, across the ranks. But we know it is a messy process, particularly in commercial enterprises. So when Stayzilla co-founder Yogendra “Yogi” Vasupal was arrested by Chennai Police earlier this year, it took the entire startup community by shock, consternation, and eventually, a furore erupted. Vasupal was accused of cheating Aditya CS, proprietor of Jigsaw Advertising of Rs 1.69 crore. Here, it seemed, was an entrepreneur being persecuted for not paying his bills on time—an obviously civil dispute being turned into a criminal case at the behest of the aggrieved party.
Law and order
Why a lack of judicial reforms could kill India’s startup story
If the Stayzilla co-founder’s arrest shook Indian entrepreneurs a while ago, a look at the judicial trend behind the incident must shake the policymakers
The payment dispute between Stayzilla and Jigsaw epitomises a deeper problem with the Indian judiciary that could potentially torpedo the growth of Indian startups
The use of criminal cases to try and resolve a civil dispute is not a new phenomenon but its latest manifestation seems to have obtained judicial blessing
The trends from both the District Courts and High Courts are clear—civil litigation is stagnating or falling and criminal litigation continues to rise
In its 188th Report, the Law Commission had recommended that an outer limit of two years be set for civil suits