Supreme Court issues notice in "India’s biggest franchisee scam", seeks CBI, SFIO, ED probe against Westland Trade Pvt Ltd
Litigation News
By
Debayan Roy
2nd Nov, 2020 at 1:05 PM
The Supreme Court today issued notice in a plea seeking a probe into Westland Trade Private Limited, in what has been alleged to be "India’s biggest franchisee scam".
The Bench of Chief Justice of India SA Bobde and Justices AS Bopanna and V Ramasubramanian was hearing a plea by 38 petitioners claiming to be cheated and duped by Westland Trade Private Limited.
It was alleged that this company floated bogus companies such as Hyper Supermarket, Hyper Mart, Big Mart Super Mart, Louies Salon, Midnight Cafe, Franchisee World, BM Mart, H Mart, S Mart etc. The petitioners thus sought an investigation into the company by the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED), or the Serious Fraud Investigation Office (SFIO).
Senior Advocate Gopal Sankaranarayanan submitted that the 38 petitioners approached the Apex Court as "no action was taken either by the states or the Central agencies."
The petitioners, through Advocate Ashwini Upadhyay and Ashwani Kumar Dubey,have accused the directors, partners and beneficiaries of Westland Trade Private Limited of various criminal activities including money laundering, benami transactions, and black money hoarding, among other crimes.
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The plea states that the company took Rs 3 lakh for running a grocery store in May 2019. It opened stores in Karnataka, Telangana, Goa, Maharashtra, Bihar, West Bengal, Chhattisgarh, Gujarat, Uttar Pradesh, Haryana, Rajasthan, Punjab, Madhya Pradesh, Delhi and many other states.
However, in April, this year, the company defaulted in payment, duping about 500 investors.
The plea states that the directors of Westland had established bogus companies to create a scam.
"In collusion with ROC and Bank Staff, the fraudsters have registered many fake, bogus & 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. 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."
Plea filed in Supreme Court
The petition states that by May 2020, the petitioners started digging more to understand who was actually running the company and "soon a lot of scary information started coming out." The plea reads,
"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."
Detailing a need for an SFIO probe, the plea states that the "petitioners’ hard earned money have been looted by the fraudsters by creating bogus-ghost companies throughout country."
"It is necessary to state that SFIO has experts from financial sector capital market, accountancy, forensic audit, information technology, company law, taxation law, customs and investigation."
The petitioners add though they addressed a letter to the Gurugram Police seeking registration of an FIR, no case has been filed in the matter.
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