Principal Sessions Judge M Nazir Ahamed dismissed the bail application after Public Prosecutor M L Jegan and counsel for the complainant opposed the bail plea.
An anticipatory bail application filed by Vasupal's partner and co-accused in the cheating case, Sarjit Singhi, was also dismissed by the court.
This is the second time Vasupal's bail plea has been turned down. On March 23, Special Metropolitan Magistrate had dismissed his bail plea.
On March 14, the Central Crime Branch had arrested Vasupal on a complaint by CS Aditya of Jigsaw Advertising and Solutions for offences including criminal breach of trust, intimidation and cheating.
When the bail application came up for hearing today, the Public Prosecutor argued that it was a clear case of breach of trust. The complainant had rendered advertisement services to the accused in the belief he would get his charges. However, the accused exploited the trust and cheated him, he submitted.
According to the complaint, Stayzilla allegedly defrauded the advertisement firm of Rs 1.69 crore.
The counsel for the complainant, Nirmal Kumar, submitted that the accused had an intention to defraud his creditors.
"The Companies Act mandates that every creditor must be duly informed before closing the registered office of a company registered under the Act. But Vasupal failed to do so, which clearly establishes his intention to defraud the creditors," he said.
Senior counsel B Kumar, appearing for the accused, averred that the dispute is "civil in nature" and that criminal cases were foisted as "pressure tactics".
Noting that Rs 6.8 crore out of the Rs 8.50 crore mentioned in invoices had been already paid and the pending dues of Rs 1.69 crore included the disputed invoices of Rs 1.44 crore.
He said his client was ready to pay Rs 25 lakh within two weeks if released on bail, and contended that it was only the business model that was shut and not the firm.