Made mistake by issuing notice on pleas for franchise scam probe: SC

New Delhi, Feb 8 : The Supreme Court on Monday said it committed a mistake by issuing notice on pleas seeking probe by multiple agencies in the franchise scam where scores of people were cheated.

At the beginning of the hearing, a bench, headed by Chief Justice S.A. Bobde, said: “We had made a mistake by issuing notice in this.”

The Chief Justice added the court has no problem in admitting its mistake.

In November last year, the top court had issued notice to Centre and its agencies on three separate pleas against Westland Trade Private Ltd. Then, the top court had sought reply from the Ministry of Home Affairs, Ministry of Finance, the CBI, the Enforcement Directorate and others in the matter.

Lawyer Ashwini Upadhyay, representing Mahendra Singh Rana and 37 other victims of alleged franchise racket, submitted before the bench, also comprising Justices A.S. Bopanna and V. Ramasubramanian, that the court had agreed to examine the matter and now the victims shouldn’t be asked to move the High Court. The bench stressed that it made a mistake by issuing notice in the matter, but added that the remarks were not made on the merits of the case.

As Upadhyay submitted that he would move the Delhi High Court, the bench told the lawyer that he should moved the High Court concerned.

The petitioners have contended that in collusion with ROC and bank staff, the fraudsters have registered many fake, bogus & ghost companies and brands. “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,” said the plea.

They have accused the directors, partners and beneficiaries of Westland Trade Private Ltd of various criminal activities, which includes money laundering, benami transactions, and black money hoarding, among other crimes.

The petitioners said the company collected franchisee fees of Rs 3,00,000 and 18 per cent GST and set up cost of Rs 5,000 per square feet and assured payouts of 2 per cent minimum guaranteed income on total setup cost paid by franchisee owner, store rent at Rs 60 per square feet, and 10 per cent of sales as commission.

“In the month of May, few of us got an email saying that company is enforcing Force Majure clause listed in the agreement and 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,” said the plea of one of the petitioners.

Insisting on a CBI probe, the petitioners said that investigation by CBI is essential because active directors of these fake and bogus companies are pawns and real criminal conspirators are high profile powerful politicians. “ROC Officers, Bank Employees and Charted Accountants are also involved in this racket,” the plea alleged.

Disclaimer: This story is auto-generated from IANS service.

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