A commercial court in Bengaluru has passed an injunction order against CureFoods, a subsidiary of health and fitness startup Curefit, restraining the company from selling any movable assets like kitchen equipment.
The case was filed by CureFoods landlord who moved to court seeking interim protective measures against the firm for allegedly withholding rent and failing to honour the lock-in period in the lease.
Curefoods, which operates the EatFit brand, took up office premises in Bengaluru for Rs 9.5 lakh a month through a registered lease dated January 27, 2020, with a three-year lock-in. Rent was payable from May 1 after the landlord undertook remodelling work to the company’s specifications. ET has reviewed a copy of the complaint.
The company had sent a termination notice claiming that it was unable to do business owing to the Covid-19-induced lockdown. But the landlord argued that the food delivery business continues to operate, and was also deemed an essential service during the nationwide shutdown.
Curefit said it cannot comment on a “sub-judice” matter. It, however, clarified that food sales remain unaffected. “We are not stopping our food sales,” the company’s spokesperson said.
“Ease of doing business requires that contracts are honoured. We welcome the continued protection of contractual rights,” Arjun Rao, Partner at Bhat & Rao, said.
Earlier this month, Curefit undertook a second round of layoffs and furloughs, impacting 600 employees, two months after it laid off over 700 workers.
Aside from shuttering some of its fitness centres under the CultFit brand, the company has also shut down a number of its EatFit cloud kitchens. Earlier this year, the startup had raised around Rs 832 crore in a funding round led by Temasek, the Singapore government-backed investment company.
Curefit is not alone. Several companies including Oyo, Paytm, Ola, Swiggy, Zomato, Uber among others have reached out to builders to renegotiate pan-India rental agreements, renewal clauses, rent escalations etc. to reduce long-term fixed asset costs.