Mohit Goel, the Director of Noida- based company Ringing Bells which had announced Freedom251 smartphones at an astonishingly low price of Rs 251 apiece, was detained today here on allegations of fraud, police said. (All you need to know about Mohit Goel, the head of Ringing Bells)

Goel has been detained after owner of Ghaziabad-based Ayam Enterprises filed an FIR yesterday alleging that Ringing Bells "defrauded" it of Rs 16 lakh.

Ghaziabad Deputy SP Manish Mishra said Goel has been detained for interrogation in the matter.

The phone has remained controversial since its launch | Source: Facebook

In the FIR, Ayam Enterprises has claimed it was persuaded by Goel and others from Ringing Bells to take up the distributorship of the Freedom251 phones 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," it claimed in the FIR.

The owners of Ayam Enterprises claim that they were threatened that they would face a threat to their lives if they asked for the remaining Rs 16 lakh "again and again".

Mohit Goel (left) at the launch of the phone | Source: Facebook

Ringing Bells had begun the sale of Freedom 251 handsets, touted as the world's cheapest, on its website in February last year.

However, the phone remained controversial with many alleging it was like ponzi scheme. The firm had claimed that around 30,000 customers had booked the phone and seven crore people registered for it. It later stopped the manufacture and distribution of the phone.

Goel and his wife later quit the company.