Noida-based company Ringing Bells literally set alarms ringing in the country last year after it announced the Freedom 251 smartphone, a phone so cheap that the total cost of going to purchase it would be more expensive than the phone itself.

Freedom 251 director Mohit Goel was detained in Ghaziabad on Thursday after Ghaziabad-based Ayam Enterprises filed an FIR in a Rs 16 lakh fraud case.

According to the enterprise, it was approached by Goel who assigned it the task of distributing the Freedom 251 smartphone in November 2015. “We paid Rs. 30 lakh to Ringing Bells through RTGS on different occasions. But it delivered us product worth Rs. 13 lakh only. Upon follow-up, we could get products plus money totaling Rs. 14 lakh,” the enterprise mentioned in the FIR. The company also alleged that they were threatened with dire consequences if they pursued the matter repeatedly.

Set as a ponzi scheme which became wildly popular, Mohit reportedly took money from several people under the pretext that he would assign them the task of distributing the Freedom 251 phones.

On top of that, Ringing Bells had availed customers to pre-book the phone on their site without having any manufacturing facility for the phone. It is also being said that Mohit acquired phones from Taiwan and gave them to the distributors with Freedom 251 tag.