The Future Group, which owns Big Bazaar, the biggest
retail market chain in the country, has launched ‘Profit Club Card’ with an eye
on making easy and quick money throwing the legalities to the wind. The new scheme
intends to mobilise deposits from the customers for the goods to be supplied in
future, which is nothing but violation of various laws.
It may be recalled that the Newlook Retails Private
Ltd also known as NMart launched similar scheme in the past and collected
nearly Rs 1,500 crore from public. However, it ran into rough weather after the
police filed criminal cases against the company. Its chief Gopal Singh
Shekhawat was put behind bars and the company was closed.
A glance at the Profit Club Card brochure reveals its
true nature of violating the law of the land. An adult could become a member of
the Profit Club to acquire its card by paying Rs 10,000 plus Rs 100 as admission
fee. In the second type of Card, a member needs to deposit Rs 5,000 plus Rs 100
as admission fee.
The Cards could be used to purchase every month ‘selected’
products worth Rs 1,000 on Rs 10,000 Card for 12 months and Rs 400 on Rs 5000 Card
for 15 months. The Card is valid only to purchase products in Big Bazaar, fbb
and Food Bazaar of the Group and not other sister-concerns.
Mastan Vali, an advocate of the Hyderabad High Court,
opined that deposit was defined in Sec 2 (b) of
Andhra Pradesh Protection of Depositors Act, 1999. As per the Act 'deposit' means the
deposit of a sum of money either in lump sum or instalments made with a
financial establishment for a fixed period, for interest or return in any kind.
The definition for deposit under the RBI Act and SEBI Act
are different to definition of deposit under the AP protection of Depositors
Act. As per the RBI Act and the SEBI Act, advance for sale is not deposit
whereas in Depositors Act, there is not such exemption in the definition. As
such, any person collects deposits with a promise to return in any kind falls
within the definition of the Depositors Act. Hence, he opined that the government
should suo motu enquire into this matter under the provisions of the AP
Protection of Depositors Act, 1999 before any cause of action or grievances at
large has taken place, he added.
The Profit Club Card also attracts the provisions of
the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 as it intends
to mobilise deposits through its direct selling agents. A senior police officer
also opined that it was an outright violation of the law of the land.
As per the
General Terms and Conditions of the Profit Club brochure, one could be enrolled
as member through direct sales agents/agencies duly appointed by Future Group.
It also absolves its own liability to fulfil its obligations if there is change
in law. More, The Future Group sets a condition that in case of disputes, the
Mumbai Courts have exclusive jurisdiction. In essence, if anybody wants to file
a suit against the Future Group if it fails to fulfil its obligations, one has
to go to Mumbai to file the suit. Practically, it is not economically
feasible to an ordinary customer.
It is high time that the law enforcing agencies took
initiative to curb such illegal activities.
5 comments:
Shyam, my old friend. What were the promises made by those representing the cards? Were they told that they too could enjoy the unbelievable? In the U.S. this might come under the laws referring to usury. Granted that I am not familiar with the codes there in India. Is this company operating a pyramid scheme in the form of a binary, or some other organization?
I have to congratulate you on being one of the more pro-active individuals I've known.
The Profit Club offers only Rs. 2,000 profit on the face of it. However, it also offers unlimited income by recruiting more members into the scheme. This is the banned money circulation scheme in India.
Under the Andhra Pradesh Protection of Depositors Act, it is illegal to mobilise deposits by anyone in the name of offering interest or any other kind.
y there is no action taken by the govt???
Govt won't take action unless someone lodges complaint.
Great post! Thanks you so much for the share. Import Procedure Chennai
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