Police say the director of an Indian smartphone company, Mohit Goel (Right) was arrested late Thursday in the northern town of Ghaziabad following a complaint that his company, "Ringing Bells," had not supplied the handsets that a phone distribution company had paid for. Photo Source:- (Tech2/Firstpost) (File Photo)

The director of an Indian smartphone company “Ringing Bells,” has been arrested on Thursday afternoon in Uttar Pradesh, India on allegations of fraud charges, police said Friday. Mohit Goel, the founder of Ringing Bells, was taken into custody in Ghaziabad late Thursday following a complaint that his company Ringing Bells had not supplied the mobile phones that a phone distribution company had paid for.

A Ghaziabad-based smartphone’s distributor, Ayam Enterprises had complained and filed an FIR, by saying that it had not received handsets worth 1.6 million rupees (around $24,000). Mohit Goel was arrested in the northern town of Ghaziabad and will be produced in court later on Friday, said Rahul Srivastava, a police spokesman from the northern Indian state. Goel and his company, Ringing Bells made the headlines last year with its promise of offering a 251 rupees ($3.77) “Freedom” smartphone to ignite India’s mobile revolution.

The FIR by complainant Akshay Malhotra of Ayam Enterprises, one of the distributors of the company, has named a total of five persons, including Mohit in his complaint. In the FIR, Ayam Enterprises claimed they had agreed to distribute the phones and had paid Ringing Bells the money in advance.

“We are trying to arrest four other directors — Anmol Goel, Dharna Garg (Mohil Goel’s wife), Ashok Chadha and Sumit Kumar — named in the FIR,” Superintendent of Police Salman Taj Patil told IANS.

The director was arrested after Malhotra said, he had paid Rs. 30 lakhs for an order of handsets but had received only a fraction of the order and some of the received handsets were defective. He further said a total of Rs 16 lakh payment was pending from Ringing Bells as they could not deliver handsets and phone accessories and kept on lingering the matter for about a year. When the dealer pursued the company for a refund for the unfulfilled order, he said Mohit Goel and another executive at the mobile phone maker threatened to kill him and his family.

“So, I had to file the FIR. We paid a total of Rs 30 lakh to Ringing Bells through RTGS for a distributorship for phones and accessories in December, 2015 when Mohit Goel was the managing director. Then, the agreement was signed and the amount paid in advance. Later, they delivered us products worth Rs 13 lakh only which were not of good quality,” Malhotra said.

“However, due to delay in delivery, we asked them to return the amount. Nearly Rs 10 lakh was paid to us in two installments. They also gave us some goods which were valued around Rs 3-4 lakh. Finally, a total of Rs 16 lakh was pending which was never returned,” he added last.

However, that issue landed in a controversy, Goel’s company ran into troubles when around 30,000 customers had booked the phone despite some glitch and about 7 crore people had registered for it on Ringing Bells’ online site.

Ringing Bells had begun the sale of its “Freedom 251” smartphone, touted as the world’s cheapest smartphone, via its official website in February last year and they were promised delivery of the handset by the month of June, a promise “Ringing Bells” failed to meet. Since the company’s announcement of the Freedom 251, Ringing Bells has faced inquiries by tax officials and police.