No industry, including startups, must function within the ambit of law and cannot claim any special privileges, said Karnataka minister adding “if a person has raised or taken money, he or she must pay.”

The new India is an aspirational one, one that is raring to go and show the world it can do. Which is why, there are youngsters and start-ups galore in the country, with a lot of encouragement from the Prime Minister Narendra Modi and the central government. Yes, it is an exciting new phase of entrepreneurship that will drive the country’s economy, absorbing the armies of youngsters coming out of educational institutions.

But, there is need for caution too, as just enthusiasm and zeal are not enough, there has to be practicality built into the ecosystem of the start-up one is starting up. Or else, there is a danger that one could land in jail, like Stayzilla co-founder Yogendra Vasupal is finding out to his utter shock and dismay. Yes, his arrest, the first of its kind in India wherein a company allegedly cheated and reneged on its committed payments to an advertising company – Jigsaw Advertising.

Vasupal was called in for questioning and arrested and then remanded in judicial custody since March 14 and since then he has been lodged in jail in Chennai. His pleading that it was a civil case and not a criminal one and action against him was unjustified so far has fallen on deaf ears, as his bail plea was rejected by the magistrate’s court on Friday.

Leading start up backers and venture fund capitalists and the NASSCOM wrote to Prime Minister Modi, union home minister to intervene in the matter.

“But what these startup backers and investors do not realize that the matter is in courts and there facts matter and not sentiments,” said a senior journalist familiar with criminal investigation and court proceedings.

Stazyzilla officials also moved the Karnataka government as the company is located in Bengaluru. But the Karnataka information and technology minister Priyank Kharge, who had tried to intervene with the Tamil Nadu government initially, later admitted that “no industry, including startups and vendors, are above law and should function within the parameters and anybody raising money should pay up.”

Yogendra Vasupal was arrested for alleged cheating and criminal intimidation.

“If you have raised or taken money, you have to pay up. You cannot say I will not pay,” the minister is quoted as saying in reports from Bengaluru.

Jigsaw Advertising had alleged Stayzilla had defrauded it to the tune of about Rs 1.68 crore for services it rendered since last year. “We are middle class first generation entrepreneurs and have had sleepless nights for the past many months. We have been cheated and are the victims when it is being painted as if we are the villians. The company owes us a lot of money, that we have to pay our vendors out of our pocket,” said Radha Sekhar, proprietor of the advertising company based in Chennai.

The Karnataka minister initially seemed to be supporting Stayzilla’s Vasupal, but later avoided committing himself to either side.

But Kharge dismissed the contention of the startup bodies the startup was in danger. “How can it be? Not a sigle startup will close because of this Stayzilla incident, the Karnataka minister asserted, reports said.