SC notice to Centre on petitions seeking probe into ‘franchise scam’

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Tribune News Service

New Delhi, November 2

The Supreme Court on Monday issued a notice to the Centre and others on petitions seeking a probe into a “franchise scam” in which a number of people were cheated of an estimated Rs 30 crore.

A Bench headed by Chief Justice of India SA Bobde asked the Ministry of Home Affairs, Ministry of Finance, CBI, ED and others to respond to petitions filed by advocate Ashwini Kumar Upadhyay and others.

The petition alleged that a group of people in the NCR had floated a company, “Hypermart”, registered in Sector 63 of Noida, and five-six more such firms to target people with offers of giving them a “franchise store” of the firm in their city. A man was arrested in Noida in August in connection with the ‘franchise fraud’ in which scores of people have been allegedly duped to the tune of around Rs 30 crore, it was alleged.

The petitions filed by various individuals alleged they had been cheated and duped by ‘Westland Trade Private Limited’ which floated bogus companies such as Hyper Supermarket and Hyper Mart. Some of the petitions demanded a probe against Blue mart, Big mart franchise scam cases.

The petitioners sought an investigation by CBI, ED and Serious Fraud Investigation Office (SFIO) or by an SIT into various offences, including money laundering and black money hoarding, by directors & beneficiaries of the company.

Upadhyay alleged that the company collected franchise fees of Rs 3 lakh and assured certain pay out and attracted 500 investors.

The company allegedly defaulted in the payment during the lockdown and sent an email in May saying it was enforcing ‘Force Majure’ clause i.e. unforeseeable circumstances that prevent someone from fulfilling a contract listed in the agreement.

“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 petition alleged.