Delhi police arrest founder after he shuts down company, team detained over client's 'frivolous complaint'

Delhi-based entrepreneur Vaibhav Chawla, the co-founder of warehousing startup Wherehouse, was arrested at 1 am on Tuesday.

Shockingly, the arrest came a day after he announced shutting down his startup, citing operational chaos, capital constraints and a few of his teammates were detained by police without proper documentation after a client’s "frivolous complaint".

Startup founder reveals police harassment on LinkedIn

In a LinkedIn post, Chawla disclosed that the matter, which began as a dispute between the startup and the complainant, escalated and ended in police action.

He added that the company even made profits last year, and that the last few months have been brutal for him and his team. 

"A frivolous complaint, and the line was crossed. In the last few days, the team of Wherehouse was detained without any documents, only to be released after families showing up at the police station. Wherehouse means nothing if we can't protect the very people who built it," the post read. 

Sources in the Delhi Police, however, dismissed claims of detention, stating that no one is in custody. They added that the police is investigating the company after receiving a complaint of cheating.

Founded in 2021, Wherehouse is a supply chain intelligence company that helps brands move closer to their customers, enabling faster and more efficient deliveries and driving business growth.

In his post, Chawla said the company had "pushed through every obstacle, capital constraints, operational chaos, and the brutal realities of building consumer infrastructure" to emerge successful.

"We made mistakes, we learned fast, we stayed honest, and we kept showing up every single day. What we built was not small — a real business, real infrastructure, real people, real impact. And a team that gave a part of their life to this dream. We made profits too last year," he added.

Chawla alleged that the client escalated the matter with a "frivolous complaint", which eventually led to police action that he says went too far.

What actually happened?

According to Moneycontrol, the complaint was filed by Curio Lifestyle, which approached the startup in July 2024 to grow its business. A formal agreement was made in August between Curio Lifestyle and Warehouse, outlining monthly payments and salary reimbursement.

However, the client began defaulting on payments in November 2024. Despite several reminders, fixed fees and manpower pay remained unpaid until March this year. By May 31, 2025, the outstanding debt stood at ₹ 1,92,207, with the brand's total stock value acknowledged at ₹ 46 lakh.

The client then sent an email alleging that money was due to Wherehouse on June 1, which co-founder Chawla denied based on contractual terms. On June 16, Wherehouse dissolved the agreement due to “abusive and threatening behaviour.”

Instead of paying ₹ 1,28,000, the customer allegedly filed a criminal case with the Economic Offences Wing (EOW) after July 15. On July 23, Wherehouse filed a response, claiming that the case was fraudulent and intended to evade payment.

By November 16, officials from the Nangloi Extension Police Station were calling Chawla and refusing to disclose complaint information or papers. Between November 17 and 28, authorities visited the Wherehouse premises at least six times, interrupting work and forcing Chawla to appear alone without a lawyer.

By the end of the month, on November 28, an officer allegedly threatened staff and detained 10 warehouse workers at the station, only to be released after the intervention of family members.

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