Vaibhav Chawla, co-founder of Delhi-based storage startup Wherehouse, was arrested at 1 am on Tuesday following a “frivolous complaint” by a customer. Chawla’s arrest came a day after he announced he was shutting down his startup, citing operational chaos and capital constraints after a few of his teammates were arrested without documents.
The matter, which started as a dispute between the startup and the complainant, escalated and ended in police action, he said in a LinkedIn post. The businessman added that the company achieved profits last year, adding that the past few months have been tough for him and his team.
“A frivolous complaint, and the line has been crossed. In the past few days, the Wherehouse team has been detained without any documents, only to be released after the families showed up at the police station. “Wherehouse means nothing if we can’t protect the people who built it,” the post read.
Chawla added that recent events have made it “not worth fighting over” and that they will continue the process of transitioning brands and teams in due course within months.
What is the issue?
The complaint was filed by Curio Lifestyle, which approached the storage startup in July 2024 to expand its business, Wherehouse said in a statement to Moneycontrol.
Both entities signed a formal agreement in August 2024, but Curio Lifestyle began defaulting on payments by November. Despite repeated reminders, the dues remained unpaid by March this year, and as of May 31, the amount stood at around INR 1.92 lakh.
In June, the customer filed a counterclaim alleging that Wherehouse owed him money, but Chawla dismissed the suit based on the terms of the contract. As the email exchanges escalated into abusive and threatening messages, he terminated the agreement.
The client went to the economic crimes wing instead of clearing his dues, the startup said. In its defense, Wherehouse asserted that the complaint was an attempt to avoid payment.
What does it mean for ease of doing business in India?
According to Merlin AI founder Pratyush Rai, the incident is both tragic and comical at the same time.
“For your information – the client who used police force to arrest the founder, did all this to default on payment of around INR 1.28 lakh/USD 1,500. That’s all it takes to force a man to stay in jail without an FIR and lawyers. And to convince them to shut down their shop. The situation is tragic and comical at the same time,” he wrote in a post on X.
“Ease of doing business in India is only for those who have the clout to get the police to arrest someone else at 1 a.m.,” wrote Sandeep Hegde, head of marketing at Auralis.
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2025-12-03 06:05:00
