Tuesday, 16 February 2010

Money circulation scheme banning enactment is applicable to Amway

Trivedi stated that there is enrolment in the Amway business model and Raja Naren has enrolled a group of IBOs.
Now let us look first at the latest judgement of the Hon'ble Supreme Court of India {(2008) SCC 708}. Under the provisions of the Prize Chits & Money Circulation Schemes (Banning ) Act, 1978, it is a money circulation scheme if it provides for (i) making of quick or easy money and (ii) if it is dependent upon an event or contignecy relative or applicable to the enrolment of members into the scheme.
A member would be entitled to earn substantial income only after his enrolment and after enrolment of additional members by him into the scheme. The second ingredient such payment of money is dependent on the "event or contingency relative or applicable to the enrolment of emmbers into the scheme" is thus very much present.
Both the ingredients are present in the Amway business model and that is why it is illegal money circulation scheme.
The Hon'ble Supreme Court also pointed out the 'mathematical impossibility'. The Apex Court stated that the promoters of the scheme very well knew that it is certain that the scheme was impracticable and unworkable making tall promises which the makers of the promises knew fully well that it could not work successfully. It could work for some time in that "Paul can be robbed to pay Peter" but ultimately when there is a large mass of Peters, they will be left in the lurch without any remedy. If it is so, it could be said to be a case for application of Section 420 (cheating) read with section 34 (joint liability) of Indian Penal Code.


dtytrivedi said...

thats right i know about that.

By why in the world you are not getting i am saying.

since early 2008 there has been drastic changes in the business model itself.

Now there is less than 1000Rs enrollment fee but,


i.e. that amount is neither considered as turnover nor he will earn income from that enrollment.

so no matter how many people I enroll I earn nothing until there is product movement in form of product consumption or product sales.

I am really amazed that why are not getting my point.

dtytrivedi said...

now dear shyam can u please tell me what is the minimum turnover in raja naren which qualifies him a diamond pin holder.

I assume u have seen the amway pins and recognition which clearly based on turnover and sustainability of the turnover over specific months.

It never mentioned that how many persons one has to enroll in order to achieve specific pin.

U can start from the lowest pin.

IBOFB said...

(1) it's not quick
(2) it's not easy
(3) it's not dependent on enrollment


Legal Scan said...

Trivedi says that earlier the Amway looted a lot. Now it is looting very less. So forgive its past criminal activity. Now it is a changed company. It is still a money circulation scheme operating outfit, my dear youngman. IT is apparent on its website. Why do n't you realise its criminal activities. Why do you support a criminal gang of looters.

dtytrivedi said...

nope, previously as you know the investment was 4400 and about Rs 2200 of it was the product and 1800 was accounting & admin fee and literatures.

now the most important thing was that because of Rs 2200 was of product it was counted as turnover or sales in the account of the person who enrolled.

legal scan i urge u to look again amway pins and recognitions. It never mentioned that how many people a person should enroll to become a specific pin holder like silver or diamond.

let me explain u more clearly.

here are some of the pins of amway

(taking into consideration 1 pv = 55 Bv or Rs)
Silver Producer: A Silver Producer has attained a qualifying month at
21% as defined in the Amway Business Manual. i.e

Gold Producer: A Gold Producer has attained three qualifying months
at the Silver Producer Level as defined in the Amway. I.e maintaining Rs 550,000 in consecutive 3 months

Platinum A Platinum has attained 6 qualifying months at that
Silver Producer Level as defined in the Amway Business
manual, at least 3 of which are consecutive.

Ruby: A Ruby is a qualified Platinum who has attained at least
20,000 Personal Group PV in any one month during the
performance year in market

Founde Platinum:A Founders Platinum has attained 12 qualifying months
at the Silver Producer Level as defined in the Amway
Business manual for all 12 months in a perfomance year
in market.

As u can see that the pins were always based on turnover and not on enrolling people.

Legal scan: One can only qualify for silver (and that also for 1 month only) if he generates Rs 550,000 through recruiting 250 people.

(i.e 250 people joining the business paying Rs 4400 and from it Rs 2200 are counted in business volume)

Next year if i want to achieve the turnover through recruitment, then i have to recruit another people in next month. which is clearly not sustainable.

It is only sustainable through movement of products and sales turnover.

[An important note, i have taken recruitment part of Rs 4400 which is not present now, it was just for the sake of understanding. currently the business joining fee is Rs 995 and it does not counts in sales or income of a person who enrolled the new one]

Infact if it would be relying on enrolling members and then by introducing Rs 995 investment plan in year 2008 (which does not count in income and sales turnover) it would dug its own grave. the business would have gone busted in year 2008 itself

Joecool said...


How many IBOs out of a thousand achieve founder's platinum? 1 or 2?

dtytrivedi said...

it totally depends upon ability to generate and sustain turnover of Rs 550,000 for 6 months