New Delhi (ILNS): A PIL was filed on Saturday in the Supreme Court, asking for probes by the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), Serious Fraud Investigation Office (SFIO) and the Economic Offences Wing (EOW) into an alleged franchise scam. Those expected to be in the dock are the owners, directors, partners and other beneficiaries of DBM Retails Pvt Ltd.
The PIL has been filed by Pravati Priyadarshini Mohapatra and 54 others who are franchise owners of the respondent company. The complaint is that the petitioners’ hard-earned money was siphoned off by the directors and partners of the company.
The PIL states that the petitioners came to know that under a well-planned criminal conspiracy, directors-partners of DBM Retails Pvt Ltd, in collusion with ROC staff, bank employees, charted accountant and the state police had created around 100 ghost companies for money laundering, benami transactions, black money hoarding, dishonestly inducing delivery of property, concealment of property and dishonest misappropriation of properties of innocent citizens.
The PIL alleges that directors-partners deceived the petitioners by fraudulently inducing them to deliver their hard earned money, thereby causing grave injury to their mind, body, reputation and property. They made false documents and electronic records for making the petitioners believe that contracts were genuine and executable.
The company collected franchise fees of Rs 400,000 and setup cost of Rs 5,000, along with assured payouts of (1) 1 percent minimum guaranteed income on setup cost (ii) Store rent of Rs 50 per sq feet (iii) 10 percent of the sales as commission and assured to take care of everything including employee salaries, electricity bill, required licenses to run the store.
The directors cheated more than 500 honest citizens, the PIL said.
The store was just a way to lure innocent citizens by promising a fake business model. When the petitioners started digging to understand who was actually running the company, a lot of scary information started coming out. When all email ID’s started bouncing back, petitioners informed the Gurugram Police but sub-inspector Kuldeep Singh did nothing, said the PIL. The petitioners then visited the head office in Gurugram, but could not find anyone there and the neighbours had no idea as to who the owner or mastermind was.
The PIL further alleges that the company has such fake stores in Jammu, Punjab, Uttarakhand, Rajasthan, Haryana, UP, MP, Maharashtra, Gujarat, Bihar, Jharkhand, Bengal, Manipur, Assam, Odisha, Andhra Pradesh and Karnataka.
“Investigation by the CBI is essential, because directors-partners of these fake and bogus companies are pawns and the real criminal conspirators are high profile powerful politicians. ROC staff, bank employees and CA and police are also involved in this racket,’’ states the PIL.
The scam has national-international ramifications as this is the biggest franchisee scam of India, done in the name of Startup India, which is a flagship scheme, launched by the Centre, says the PIL.
The petitioners cited the case of K. V. Rajendran vs CBCID [(2013) 12 SCC 481], where the Apex Court had said:
“that rare and exceptional cases can be transferred from State Police to CBI (a) Where it is necessary to do justice and instill confidence in the investigation (b) Where it is necessary for having a fair, honest and complete investigation (c) Where investigation by State Police lacks credibility (d) Where high state officials and authorities are involved and are likely to influence investigation (e) Where investigation is tainted/biased (f) Where the incident may have national and international ramifications or where such an order may be necessary for doing complete justice and enforcing the fundamental rights.”
The PIL lays emphasis on Aadhaar Card for curbing benami transactions.
“Benami transaction in high denomination currency is used in illegal activities i.e. terrorism, naxalism, separatism, radicalism, gambling, smuggling money laundering kidnapping extortion bribing dowry. It also inflates prices of essential commodities as well as major assets like real estate, gold etc. These problems can be curbed to a large extent by linking movable-immovable properties with Aadhaar,” the PIL said.
“If Aadhaar is linked with property, it will lead to an increment of 2 percent in annual growth. It will clean our electoral process, which is dominated by black-money and benami transaction and thrives on a cycle of large black investments, capture of power through foul means, use of political strength to amass private wealth, all with disdain of the citizen.”
The PIL claims that the petitioners submitted complaint to the CP, DCP and ACP Gurugram, but the police has lodged only one FIR. Moreover, it has not used proper IPC sections i.e. Section 120B, 405, 406, 419, 420, 463, 464, 465, 467, 468, 469, 471, 472, 473, 474, 503, 504, 506. It is a crystal clear case of money laundering, benami transactions, bribery, black money, but despite repeated requests, police has not communicated to CBI, ED & SFIO.
Therefore, the PIL has been filed in apex court to direct CBI, ED and SFIO to investigate the involvement of politicians, ROC staff and bank employees in this scam and direct the centre to take appropriate step to prevent such frauds in future.