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Cult.fit Co-Founder Rishabh Telang Seeks Quashing of FIR Ahead of IPO
Cult.fit co-founder Rishabh Telang has approached the seeking to quash a criminal FIR registered against him by the on allegations of , , and . The petition comes just weeks after the fitness startup filed its for a ₹950-crore initial public offering (IPO). Justice M. Nagaprasanna, hearing the matter on Tuesday, issued notice to the State of Karnataka and the complainant, Deepak Poduval—Telang's brother-in-law and former business associate—but declined to . The court observed that the police had only issued a notice under and there was no immediate apprehension of arrest. The next hearing is scheduled for .
The Allegations
The FIR, registered on , stems from a complaint by Poduval, who was a co-founder of Cult Fitness Private Limited, incorporated in November 2015 with Telang and Poduval each holding a 50% stake. Poduval alleges that Telang orchestrated the transfer of the company's business, customers, goodwill, and revenue to Cultfit Healthcare Private Limited—incorporated in August 2016—without his consent. He further claims that his signatures were forged on documents submitted to the to facilitate the striking off of Cult Fitness in 2019, effectively wiping out his equity. The complaint invokes provisions of the relating to , , , , and , along with .
According to Poduval, the alleged irregularities came to light only after he examined company records in . He contends that he did not receive any compensation for the loss of his stake and that the entire transaction was carried out behind his back.
Telang's Defense
Telang has strongly rebutted the allegations, arguing that the complaint is a belated and commercially motivated attempt to extract leverage. His senior counsel, , submitted that the events in question occurred between 2016 and 2019, and that Poduval had full knowledge of and consented to the transactions. “R2 says that Cult Fit Healthcare took over Cult Fitness Pvt. Ltd. in 2016, eventually Cult Fitness was struck off on . According to R2, these events happened without his knowledge… after 10 years he files a complaint,” Chouta argued.
The counsel further told the court that Poduval had held 20% equity (not 50% as alleged) and had signed assignment deeds in 2017, agreeing to the transfer of trademarks and intellectual property to the new entity. “He had no objection to trademarks going to new company. He receives a sum of 1 crore. In 2017, he signs assignment deeds which were accompanied with consideration, and there are in case of dispute,” Chouta submitted. Telang maintains that the dispute is essentially civil or commercial in nature and should be resolved through arbitration, not criminal proceedings.
Court's Observations
Justice M. Nagaprasanna, after hearing the preliminary arguments, noted that the police had only issued a BNSS (which requires a person to appear before the investigating officer) and that there was no immediate threat of arrest. However, the court refused to , indicating that the required further scrutiny. “The court noted that the police had issued Telang a … and that there was no immediate apprehension of arrest,” the order states. The judge issued to the State and Poduval, returnable by , and directed them to file their responses to Telang's .
Legal Implications and Analysis
This case raises several important legal issues concerning the boundaries between civil disputes and criminal prosecutions. Telang's argument that a nearly decade-old commercial transaction should not be converted into a criminal case echoes well-settled principles under (now BNSS), where courts have repeatedly held that a criminal complaint cannot be used as a tool for recovery or harassment when the dispute is essentially civil. The presence of in the assignment deeds further strengthens the case for a .
However, the High Court's refusal to suggests that the allegations of —particularly the claim that signatures were fabricated—require examination by the police. is a , and if the documents were indeed forged, the criminal color cannot be washed away simply because there is an underlying commercial relationship. The court will likely weigh the truth of the allegations against the delay in filing the complaint.
Another significant aspect is the timing: the FIR was registered just weeks after Cult.fit filed its IPO papers. Telang's counsel implied that the complaint is linked to a family dispute, possibly an attempt to derail the IPO or extract a settlement. Such strategic litigation is increasingly common in high-stakes corporate exits, and courts are alive to the misuse of criminal law for collateral purposes.
Impact on Corporate Governance and IPO Preparedness
The case serves as a cautionary tale for startup founders and investors. Disputes among co-founders, especially those involving alleged financial irregularities, can surface at the most inopportune times—such as during an IPO. Companies must ensure that all corporate actions, including transfers of assets and striking off of entities, are properly documented and consented to in writing. The absence of clear records can lead to protracted litigation.
For the legal community, the will be closely watched. If the eventually allows Telang's plea, it would reaffirm the principle that stale, civil disputes cannot be given a criminal complexion. Conversely, if the court allows the investigation to continue, it could embolden investors to file criminal complaints in similar situations. The outcome will also influence how IPOs are structured in cases where previous corporate entities have been merged or wound up.
Conclusion
The will examine the competing narratives on , when the State and Poduval are expected to file their responses. For now, the investigation continues, but Telang has secured an important procedural victory by having the court take cognizance of his arguments without any coercive measures. As Cult.fit steams ahead with its IPO plans, the legal fireworks in the High Court are a reminder that corporate growth is seldom linear—and that past disputes can cast long shadows.
