Plea in SC for joint investigation by CBI, ED & SFIO in alleged ‘franchisee racket’

A petition has been filed in the Supreme Court seeking investigation by multiple agencies in an alleged “franchise racket” by 38 individuals alleging that they have been cheated and duped by ‘Westland Trade Private Limited’ which floated bogus companies.

The plea states that the Directors of the company – Westland Trade Private Limited registered many fake, bogus and ghost companies and brands such as Hyper Supermarket, Hyper Mart, Big Mart, Super Mart, Louies Salon, Midnight Cafe, Franchisee World, BM Mart, H Mart and S Mart etc. These 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 petition seeks an investigation by the Central Bureau of Investigation (CBI), Enforcement Directorate (ED) & SFIO (Serious Fraud Investigation Office) or by a Special Investigation Team to investigate various offences including money laundering and black money hoarding by directors & beneficiaries of the company.

The plea alleged that the company collected franchise fees of Rs. 3 lakh and assured certain payouts and attracted 500 investors.

Further, according to the plea, the company defaulted in the payment during the lockdown and sent an email in May saying it was enforcing Force Majure (unforeseeable circumstances that prevent someone from fulfilling a contract) clause listed in the agreement. The plea claimed that this was strange because even during the lockdown, Grocery stores were open and the business was as usual.

“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,” the plea alleged.

A man was arrested in Uttar Pradesh’s Noida in August in connection with a ‘franchise fraud’ in which scores of people have been allegedly duped to the tune of around Rs. 30 crore.

According to police, a group of people in the National Capital Region (NCR) had floated a company, “Hypermart”, registered in Sector 63 of Noida, and five-six more such firms to target people with offer of giving them a “franchise store” of the firm in their city.

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 sought a fair and speedy trial which is impossible without fair & complete investigation.