Domestic feature phone brand Advantage Computers' (Adcom) on Friday announced it might consider legal action against Noida-based startup Ringing Bells Pvt. Ltd.

Last month, Ringing Bells launched the world's cheapest smartphone, dubbed Freedom 251, in New Delhi, and distributed some prototypes to the media which turned out to be Adcom handsets.

Ringing Bells president Ashok Chadha said that it had only given Adcom handsets as "samples" to a section of the media and the real Freedom 251 will be a new product with all the promised features.

Adcom's founder and chairman Sanjeev Bhatia said "We are deeply grieved by this incident where our mobile phone has been presented to masses for Rs.251, and therefore, would not hesitate from taking any legal actions against the company, in case the entire fiasco impacts Adcom's brand name or subsequently we face any other kind of losses."

Moreover, the Noida office of Ringing Bells was found shut on Thursday over land ownership issues with Noida Authority. The Enforcement Directorate (ED) has also quizzed Mohit Goel, CEO of Ringing Bells, over the pricing of the phone.

The company has claimed to have paid back the money it received from the first 30,000 pre-booking orders on the first day of the sale this month. It announced that the Rs. 251 Freedom 251 smartphone customers will be required to make payment only when the phone is delivered to them.

Ringing Bells is planning to give 25 lakh handsets in the first phase before June 30.