The Madras High Court in its wonderful judgement wayback in 2005 has given a blow to the business of Apple FMCG Marketing (Pvt) Ltd. This is introduction. Another judgement of the same High Court on V-Can Network would appear later.
Apple FMCG Marketing (Pvt) Ltd filed writ petitions No. 22674 and 27411 of 2004 in the Madras High Court in the State of Tamil Nadu. And the Madras High Court delivered its judgement on January 7, 2005 giving a blow to its business model. Judge A K Rajan delivering his judgment held that "It is true that several companies including multinational companies carry on the business of the 'Multilevel Marketing' and it is also true that the Executive and the law enforcing authorities keep a blind eye on such activities. This also does not make an illegal act legal. It is alwlays a fact that the law enforcing authroitiey would try to close the table only after the horse had escaped." (Para 22).
In this part of India, people are gullible and fall an easy prey to the tall promises made through the media. That was the reason why the lottery tickets were sold in large numbers in the State. Many companies want to exploit this attitude of people and float many schemes and lure the people to join the schemes. The petitioner (Apple FMCG) is not entitled for direction for prohibiting the authorities from ;keeping surveillance over any meeting. Sec 7 of the Prize Chits and Money Circulation Schemes (Banning) Act confers the right on the police officer to enter any premises, where has got a reason to suspect that the premises are being used for purposes connected with the promotion of conduct of any prize chit or money circulation scheme in contravention of the provision of the Act. (Para 33).