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Supreme Court asks franchise scam ‘victims’ to move High Court, says made mistake in agreeing to examine pleas

A bench headed by Chief Justice S A Bobde, which on November 2 last year had issued notice to the Centre and its agencies on three separate pleas against 'Westland Trade Private Limited', asked the petitioners to approach the jurisdictional high court with their pleas.

By: PTI | New Delhi |
February 8, 2021 10:58:22 pm
One of the petitions filed by various individuals has alleged they have been cheated and duped by 'Westland Trade' which floated bogus companies such as Hyper Supermarket and Hyper Mart. (File)

The Supreme Court Monday said it made a “mistake” by agreeing to examine pleas for probe by multiple agencies in the “franchise racket” in which a number of people were allegedly cheated of an estimated Rs 30 crore.

A bench headed by Chief Justice S A Bobde, which on November 2 last year had issued notice to the Centre and its agencies on three separate pleas against ‘Westland Trade Private Limited’, asked the petitioners to approach the jurisdictional high court with their pleas.

At the outset, the bench, also comprising Justices A S Bopanna and V Ramasubramanian, was told by lawyer Ashwini Upadhyay, appearing for Mahendra Singh Rana and 37 other victims of alleged the franchise racket, that the top court had agreed to examine itself the pleas and now the victims shouldn’t be asked to go a high court.

“We had made a mistake by issuing notice in this… We don’t have a problem admitting our mistake,” the bench said in the proceedings conducted through video conferencing.

While asking the petitioners to go to the high court, the bench said, “we are not saying anything on merits. We are not going to adjudicate this.”

Upadhyay told the bench that the plea would be now filed in the Delhi High Court.

Earlier, the bench had sought responses from the Ministry of Home Affairs, Ministry of Finance, CBI, Enforcement Directorate and others on the plea.

One of the petitions filed by various individuals has alleged they have been cheated and duped by ‘Westland Trade’ which floated bogus companies such as Hyper Supermarket and Hyper Mart.

The other pleas sought probe against Blue mart, Big mart franchise racket scam cases.

It has sought 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, filed through advocate Ashwani Kumar Dubey, alleged that the company collected franchise fees of Rs 3 lakh assuring certain payout and attracted 500 investors.

However, according to the plea, the company defaulted on 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 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 the 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.

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