A half-a-dozen landlords in Delhi have sent legal notices to Sequoia-funded Cars24 for alleged non-payment of rents for months and then shutting stores at various places in “violations” of the lease agreements. Cars24, one of the largest online platforms for used cars has already shuttered about a dozen outlets in Delhi, according to sources.
The legal notices have accused the online auto platform of breach of contract for terminating leases before the lock-in period ended. Cars24, that has so far reportedly raised $100 million from investors, said it currently operates 150 outlets in 35 cities and the company plans to double the number of cities and total number of stores of 230 by the end of the year.
“We conduct periodic internal audit of all properties for compliance and are currently in the process of addressing anomalies observed with a few properties in our recent audit,” a Cars24 spokesperson said in an email response. “As a company, we are rapidly growing and expanding our operations immensely across India”
The three-year-old startup counts marquee investors including Sequoia Capital, Cayman Islands-based Kingsway FCI Fund and Toronto-based KCK Global, Exor Seeds, a fund associated with Exor NV, one of Europe’s leading diversified holding companies and which is controlled by the Agnelli Family and Apoletto Asia, an investment vehicle associated with Russian billionaire Yuri Milner’s DST Global among its backers.
Last year, in a separate case, the Delhi High Court in an interim order had asked Car24 not to indulge in unfair competition or commercial misappropriation or trademark infringement of the Olx brand, after the US-based online trade facilitator accused the car-selling platform of illegally procuring its sellers’ data.
In a lawsuit filed in the high court, Olx alleged that Cars24 representatives or agencies hired by it posed as buyers on the Olx platform, chatted with sellers and procured their contact details. Cars24 had denied the allegations in a response to ET last year.