Plea Seeking Probe Into Allegedly "India's Biggest Franchisee Scam": SC Issues Notice To Home Ministry, Finance Ministry, Central Agencies

The Supreme Court on Monday issued notice in a plea seeking investigation by the Central Bureau of Investigation(CBI), Enforcement Directorate (ED) & SFIO (Serious Fraud Investigation Office) or by a Special Investigation Team into various offences including money laundering and black money hoarding by directors & beneficiaries of Westland Trade Private Limited.

A bench comprising Chief Justice SA Bobde, Justices AS Bopanna & V. Ramasubramniun has issued notice to Home Ministry, Finance Ministry, CBI, ED, SFIO, Police Commissioner Delhi Gurugram and Noida.

Senior Advocate Gopal Sankaranarayan appeared for the petitioners and submitted that despite complaints, no action was being taken. "Only 1 FIR registered in Noida. This issue is of a national nature. State nor Central agencies taking action," said the Senior Counsel.

The plea has been filed by 38 petitioners through Advocate Ashwani Upadhyay averring a Franchisee Scam and states that the directors of the company in collusion with ROC and Bank Staff registered many fake, bogus and ghost companies and brands viz. Hyper Supermarket, Hyper Mart, Big Mart, Super Mart, Louies Salon, Midnight Cafe, Franchisee World, BM Mart, H Mart and S Mart etc. In doing so, the ghost companies claimed to help individuals to start business in retail sector but dishonestly misappropriated and converted petitioners' hard earned money into black money and benami properties in violation of the contract.

The Plea states, in this regard -

"The injury is large because under a well planned conspiracy, directors, sleeping partners and employees deceived the petitioners by fraudulently and dishonestly inducing them to deliver their hard earned money thereby causing injury to not only mind body and property but also right to life, liberty, dignity, and trade guaranteed under Article 19 & 21. In collusion with ROC & Bank staff, directors partners and employees made false documents and electronic records with intent to cause injury to petitioners and commit fraud."

The petitioners state that the company enforced Force Majeure clause listed in the agreement and stated that there will be no payments for the month of April-May. "This was strange because even during the lockdown, Grocery stores were open and the business was as usual", the plea states.

"By May 2020, petitioners started digging more to understand who was actually running the company and soon a lot of scary information started coming out. All email IDs started bouncing back. The registered address was locked and there was no one there. The registered Head Office, which is in Noida, hardly had two people working and they had no idea who the owner or master mind was. The Director Mr. Kunal Keshav sent us a note saying that he had resigned" - Excerpt of Plea

The petition also alleges that Mr. Arun Modi who called himself an Advocate kept threatening the petitioners. It is alleged that the directors' partners and beneficiaries of Westland Trade Pvt Ltd cheated the petitioners and converted their hard earned money into black money and benami property, and that "the store was just a way to lure innocent people by promising a fake business model".

Stating that an investigation by CBI, ED and SFIO is essential, the petitioners claim that the instant case is not a simple case of mischief forgery criminal breach of trust, dishonestlyinducing delivery of property, cheating by personation, falsificationof accounts, concealment of property, dishonest misappropriation,corporate fraud, benami transaction and black money hoarding but the biggest Franchisee Scam of India, committed by an organized international racket of money launderers, cheaters and fraudsters.

Further to this, it is stipulated in the petition that the investigation by ED is essential because petitioner's hard earned money has been laundered out of country and converted into black money and benami properties and that the ED is a specialist economic intelligence agency responsible for fighting economic crime in India.

The plea states that Investigation by the SFIO is essential because it has experts from financial sector, capital market, accountancy, forensic audit, IT, company law, taxation law, customs and investigation and petitioners' hard earned money has been looted by fraudsters by creating ghost companies throughout the country.

Averring that the petitioners' right to trade guaranteed under Article 19 and right to life guaranteed under Article 21 has been severely infringed, the plea prays for a fair and speedy trial which is impossible without fair & complete investigation.

Additionally, the petitioners have also prayed for appointment of a receiver or forensic auditor and pass appropriate directions for recovery of petitioners' hard earned money expeditiously and also to direct Centre to take apposite steps to prevent such frauds in future.