The Andhra Pradesh High Court held: As is evident from the contentions advanced on behalf of the petitioners (Amway India) as noted earlier, the petitioners have taken the stand that there is no quick or easy money involved in the scheme and that the money which the sponsor member gets does not depend on any event or contiency relative or applicable to the enrollment of the members into the scheme. But on the careful analysis of the true nature of the scheme as explained above, it is quite apparent that one of the components of the income earned by a sponsor member is the commission which is calculated not only on the personal PV of the sponsor memb er, but also from the PV earned by all the remaining 102 members falling within his group. There is, therefore, no gainsaying that a substantial part of the income which the first sponsor member of the group gets depends on the event of or contingency relative or applicable to the enrollment of members into the scheme. This conclusion can be tested by a further analysis of the income figures given in the earlier paragraph. Supposing the sponsor member at the top does not introduce any member and if he merely sells the products given to him, he gets an income of Rs. 12, 420. If he sponsors only six members and they in turn do not sponsor any member, then he will get an additional income of Rs. 23, 760. If those six members who he sponsored again sponsor four members each, he will get a further income of Rs. 1,14,480 and if the 24 members sponsor three members each, he will get a further sum of Rs. 6,83,300. Thus the money which the member at the top line gets depends upon the members who he enrolls or the members enrolled by7 him enroll. (para 28)
From the aforementioned discussion, it is proved that the schemes for easy/quick money to its distributors. The first ingredient (of Prize Chits & Money Circulation Schemes (Banning) Act, 1978) is thus satisfied. (Para 30).
Let us look at the second ingredient in the next post.