NEW DELHI: In the early hours of a late-November morning in Delhi, a warehouse entrepreneur who had spent years building a modest but growing logistics business was taken into police custody. What followed was a wave of alarm across startup community, which is now reckoning with the fragile boundary between commercial disputes and criminal action.
A Dispute Spirals Into Detention
In the final weeks of November, Vaibhav Chawla, co-founder of the Delhi-based warehousing startup Wherehouse, found himself at the center of a confrontation he insists should never have left the realm of civil law. According to Chawla, officers from the Nangloi Extension Police Station began contacting him on November 16, repeatedly refusing to provide copies of the complaint filed against him or explain the basis for their inquiries.
What followed, he said, was a series of visits by police to Wherehouse facilities between November 17 and 28. Employees described officers lingering for hours, interrupting operations, and urging Chawla to appear at the station alone and without counsel. On November 28, tensions escalated when an officer allegedly took 10 warehouse staff whom Chawla later characterized as “innocent, blue-collar workers with meager salaries” to the police station, releasing them only after family members demanded answers.
Chawla’s own arrest came days later, at around 1 a.m. on Tuesday. News of the detention spread quickly among founders and operators who recognized the case as an example of how quickly business disagreements can transform into criminal matters in India’s still-maturing regulatory and enforcement landscape.
A Business Relationship Deteriorates
The conflict traces back to a deal struck in mid-2024. According to documents shared by Wherehouse, a brand called Curio Lifestyle approached the startup seeking support for an aggressive expansion in the Delhi NCR region. A formal agreement took shape that August, including terms for monthly service fees and reimbursement of staff salaries.
Wherehouse says it fulfilled its part of the agreement even scaling operations to 75 stores, triple the original scope while payments allegedly began to lapse as early as November 2024. Over the next seven months, the company says it issued repeated reminders as fixed fees and salaries remained unpaid, culminating in an outstanding balance of Rs 1,92,207 by May 2025. Curio, meanwhile, acknowledged stock worth Rs 46 lakh in Wherehouse’s possession, according to the startup.
The relationship fractured further in June. On June 1, the client emailed claiming money was due to her. Chawla disputed the claim, saying contract terms contradicted her position. He reported receiving abusive language and threats to file criminal cases. On June 16, Wherehouse terminated the agreement, citing “abusive and threatening behavior.”
Rather than pursue settlement through negotiation or civil channels, Chawla said, the client filed a criminal complaint with the Economic Offences Wing in July. Wherehouse submitted its defense later that month, calling the complaint “mala fide” and intended to avoid payment obligations.
The Collapse of a Startup Under Strain
By late November, the conflict had moved far beyond unpaid invoices. In a LinkedIn post titled “Shutting down Wherehouse,” Chawla announced that the company he launched in 2021 would cease operations entirely due to the events of recent weeks.
“We started Wherehouse in 2021, with a hypothesis the brands will come closer to the customers,” he wrote. “This was pre-Quick Commerce. The hypothesis stands true. The model evolved and we pushed through every obstacle capital constraints, operational chaos, and the brutal realities of building consumer infra.”
But the police action, he said, crossed a line. The alleged detentions of employees without documentation, followed by his own arrest, left him unwilling to continue operating.
“Wherehouse means nothing if we can’t protect the very people who built it,” he wrote, describing a sense of moral and practical exhaustion.
A Broader Reckoning for India’s Startup Ecosystem
Chawla’s case still unfolding, with neither police nor the complainant having publicly detailed their accounts has rippled through startup ecosystem, where founders often operate at the intersection of fragmented regulation, aggressive competition, and uncertain legal safeguards.
Several entrepreneurs have privately expressed concern that criminal pathways can be used to exert pressure in business disagreements that traditionally would be handled in civil courts. Others argue that such cases reflect growing pains as consumer and logistics sectors expand faster than enforcement norms can adapt.
