Tuesday, 26 February 2013

Amway India faces rough weather at National Consumer Commission

The month of February, it seems, is a very bad month for Amway. On February 20th, Amway India faced very embarrassing situation in the Circuit Bench of National Consumer Disputes Redressal Commission at Hyderabad.
Let us recall the background to the consumer case against Amway India.
Vijayawada-based Consumers' Guidance Society collected data about the products being marked by Amway India its its dubious business model. The Society found out that the Andhra Pradesh State Food Laboratory tested the products of Amway India but never publicised the details of its findings.
The Society using the weapon of Right to Information Act obtained the information regarding the product analysis of Amway India.
Finally, the Andhra Pradesh State Food Laboratory was compelled to release its findings on the products of Amway India. In a shocking revelation, it was found that many of Amway products were adulterated, misbranded.
Armed with the report of Andhra Pradesh State Food Laboratory, Consumers' Guidance Society filed a consumer case in the Vijayawada Consumer Forum. After hearing arguments of both the parties, the Consumers Forum at Vijayawada ordered payment of Rs. one lakh in fine and withdraw the products from the market.
The Amway India preferred an appeal in the State Consumer Redressal Forum at Hyderabad. The State Forum also confirmed the district forum's judgement.
Then Amway India appealed in the National Forum at New Delhi. As Consumers' Guidance Society is a public-spirited organisation, the Amway India was ordered to pay the expenses to secretary Dr Ch Divakar Babu and joint secretary Shyam Sundar to travel to Delhi.
The National Commission admitted the petition and the next hearing had fallen on February 20th. However, the National Commission held its circuit bench at Hyderabad on February 20th giving the Consumers' Guidance Society a chance to place its arguments before the National Commission.
The counsel for Amway India tried in vain to establish that the products of Amway India were very good and the report of State Food Laboratory was not reliable.
However, Secretary of Consumers' Guidance Society Dr Divakar Babu pulled out its armour the High Court judgement which dismissed the plea of Amway India regarding the products issue and the Supreme Court also dismissed its special leave petition. The copies of the judgments were presented to the National Commission.
The counsel for  Amway India changed the arguments immediately and appealed to the National Commission to refer the matter to the larger bench of the National Commission.
However, since the Society is public-spirited, the Amway :India was ordered to pay expenses to the forthcoming visit to Delhi to present its arguments in the National Commission.
Had the counsel not put forward the plea for the larger bench to hear the matter, the National Commission would have dismissed it.
Anyway, we look forward to present the case in the National Commission on the next date.

PACL aka Pearls once again in headlines

The dubious real estate company Pearls popularly known as PACL once again hit the headlines on Monday with the Crime Investigation Department of Andhra Pradesh launching investigation into the real estate assets claimed to possess by the company in various parts of the State.
As part of the investigation , the CID inspector Muralirksihna and sub inspector Ibrahim said that a criminal case against Pearls was registered on the charges of mobilising deposits from public in the name of real estate.
In fact, the CID police are investigating into the criminal case against the fraudulent company which has been collecting on a large scale without any permission from the Reserve Bank of India.
Moreover, the PACL has engaged agents who would be paid huge commission which attracted the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978.
The CID officials went to Bandaganipalli in Udayagiri mandal and Balayapalli in Sitaramapuram mandal pf Nellore district to verify how much land actually possessed by the accused company.
The officials would also assess whether there is any correlation between the properties the company  owned and the deposits it has mobilised on the pretext of those real estate properties to the depositors.
It is a well-known fact that these real estate companies have been mobilising public deposits in the name of real estate though they do not have any that much real estate to get registered in the names of the depositors.
In fact, they never register any housesite or plot in the name of these depositors. It is only a ploy to collect money to invest in their other projects.
Many companies have been indulging in this dubious practice. Agrigold, Akshaya Gold, Abhaya Gold, Viswas Real Estate are only some of the companies in the long list of fraudulent companies.
Many of these companies simply collect and never repay the depositors. Their modus operandi is simple. The agents of these companies recruit more agents and they in turn recruit more agents. Rings any bell?
Well. This is nothing but money circulation scheme in the name of real estate.
It is high time, the CID officials expedited their investigation and bring these fraudsters to book.

Monday, 25 February 2013

Amway India suffers setback in AP High Court

Amway India has once again received an earful from the Andhra Pradesh High Court on Monday when a larger bench took up the writ petition filed by the tainted company.
Let us recall what the writ petition was about.
Andhra Pradesh State Government issued G.O.M.S. No. 178 of 2008 restraining Amway India from advertising in any media including Internet about its illegal money circulation scheme in the name of good business opportunity.
Amway India, though its writ petitions were dismissed by Andhra Pradesh High Court earlier on the basis of its illegal business model, has once again approached the AP High Court with a writ petition challenging issue of  G.O.M.S. No 178.
After the Corporate Frauds Watch also filed a writ of Mandamus in AP High Court appealing the high court to issue orders to implement the G.O., both the writ petitions were clubbed and were referred to a larger bench on the request of  Amway India.
Everyone in Amway India including its counsel thought that the larger bench would review the earlier judgement which went against Amway India.
However, the Amway India suffered a set back on Monday. The larger bench of High Court ruled there is no need for a larger bench to hear the writ petition and there is nothing to decide further on the judgement.
The High Court ruled that the writ petitions may be referred to earlier Division Bench to decide on the G.O.M.S. No 178 issued by the State Government.
It is anybody's guess what the division bench of the High Court would decide on the G.O. No. 178.

Friday, 22 February 2013

A desert called Sahara in African continent

UPDATE: This is a post about a desert called Sahara. And a fictional account of how it would be if the desert suddenly came to life and started cheating people in India. This is NOT about any Indian company which may or may not have the same name. I wouldn't know since I got a take down notice and can't name the company. So enjoy my story about the DESERT called Sahara. 
Sahara(n): The Sahara (Arabic: الصحراء الكبرى‎, aṣ-Ṣaḥrāʾ al-Kubrā , 'the Greatest Desert') is the world's hottest desert, the third largest desert after Antarctica and theArctic.[1] At over 9,400,000 square kilometres (3,600,000 sq mi), it covers most of North Africa

Sahara which had already amassed wealth by illegally collecting deposits from poor people all over India without the permission from the Reserve Bank of India, has launched another racket. Now Sahara is selling insurance policies though it is not a member of Insurance Regulatory and Development Authority (IRDA). The other day one person advertised in a local newspaper that Sahara has launched a unique insurance plan. Out of curiosity, I went to the hotel I was directed to visit and found a former lecturer, Abhiram, offering a very good business opportunity to the visitors.
The offer goes like this. One has to become a member by paying Rs.15,000 or Rs. 8,300 if he recruits two people under him he would get Rs. 1000 as commission. And these two people recruit two each under them, every one gets Rs. 1000 commission.
The subscriber who pays Rs. 15,000 would get a medical insurance policy for one year covering medical expenses for Rs. two lakh. Any general insurance company would offer such policy for half of that amount. If the member enrolls two more people, Sahara would get Rs.30,000 but pays only Rs. 1000 as commission. Ultimately, it is Sahara which is lining its pocket and the members have to pay every year for the renewal of policies. This fellow, Abhiram, who claims that he had amassed Rs. one crore in an earlier network system, clearly says that it is binary scheme. Moreover, this fellow also claims that Parliament is enacting a law soon legalising the network marketing which is nothing but a dream. These crooks are once again trying to loot our countrymen with the inducement of easy and quick money. My fellow Indians! Kindly say no to the evil designs of Sahara desert. 

Friday, 15 February 2013

RMP Infotech writ petition dismissed in AP High Court






Crl.P.Nos.9771, 10597, 10603, 11729, 12472, 12476, 12610, 12913 of 2011 and W.P.No.17544 of 2012


Crl.P.No.10597 of 2011 is filed by A.5 in Cr.No.338 of 2011 of  Arundalpet Police Station, Guntur; Crl.P.No.10603 of 2011 is filed by the accused in Cr.No.267 of 2011 of Old Guntur Police Station; Crl.P.No.11729  of 2011 is filed by A.1 in Cr.No.206 of 2011 of II Town Police Station,  Ongole; Crl.P.No.12472 of 2011 is filed by RMP Infotech Private  Limited relating to Cr.No.82 of 2011 of Santhamagulur Police Station;  Crl.P.No.12476 of 2011 is filed by the accused company in Cr.No.370 of  2011 of Pattabhipuram Police Station, Guntur; Crl.P.No.12610 is filed by  RMP Infotech Private Limited in Cr.No.387 of 2011; and Crl.P.No.12913  of 2011 is filed by the same Company in Cr.No.95 of 2011 of Kothapeta  Police Station for quashing respective FIRs under Section 482 Cr.P.C.
One of the main grievances of the petitioners in these petitions is that the  accused are being harassed by the police in Guntur and Prakasam Districts  by registering various crimes making the same or similar allegations in  all the cases.
It is contended by Senior Counsel for the petitioners that  instead of registering different cases, the police could have taken facts  relating to the subsequent FIRs as additional information in FIR registered  on the first occasion.  The said course suggested by the petitioners’ Senior Counsel could not have been adopted because facts/allegations in each FIR occurred within the territorial jurisdictions of different police stations in different districts.  The police from one police station may  not have territorial jurisdiction to make investigation into the allegations relating to other FIRs occurred within the territorial limits of other police stations either in the same district or in another district.  For that reason,  the premier crime investigation agency of the State namely CID took over all the above cases from Guntur Urban and Prakasam Districts vide Memo C.No.2614/C.12/CID/2012 dated 13.06.2012 of Additional Director General of Police, CID, Andhra Pradesh, Hyderabad for investigation; and all the matters were entrusted to Deputy Superintendent of Police, CID, RICU, Guntur for further investigation.
2. It is contended by Senior Counsel for the petitioners that business activity of RMP Infotech Private Limited does not attract any penal provisions of any enactment.  All the above cases were registered by the respective police against the respective accused in each case for offences punishable under Section 420 of IPC and Sections 4 & 5 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (in short, the Act).  It is contended that there is no element of cheating in the business activity attracting Section 420 of IPC much less activity of the petitioners and more particularly RMP Infotech Private Limited (in short, the Company) does not attract definition of ‘Money Circulation Scheme’ contained in Section 2(c) of the Act.  On the other hand, it is contended by counsel for the de facto complainant in Santhamaguluru Police Station that activity of the Company through its local branches in different parts of the State squarely attracts the definition under Section 2(c) of the Act.  It is further contended on behalf of the de facto complainant that activity of the Company resembles that of Speekasia Online Private Limited covered by unreported decision of this Court dated 30.08.2011 in Crl.P.No.5626 of
2011 and also that of Amway Case as laid down by this Court in Amway India Enterprises v Union of India[1].
3. In police proceedings/special report of the police which is FIR in Cr.No.338 of 2011 of Arundalpet Police Station, Guntur the business activity andmodus operandi of the Company is noted in the words of an independent distributor of the Company who was taken into custody, from the following lines:

“2. Mr.Pravin Jaya Chandan is the Managing Director, Mr.Dhaval Jaya Chandan is the Chairman along with few more directors of our company.
3. Head office is located in Chennai, Mahalingapuram.
4. In the beginning through multi level marketing I have purchased an Oven and Siyaram suit length for 6500 from RMP Infotec Private Limited and from that time I am working as independent distributor.
5. In the beginning when I joined the company as independent distributor, I submitted a demand draft of Rs.6500 in favour of RMP Infotec Private Limited payable at Chennai along with a completed
application, ID Proof, Age proof and Pan card at the franchisee located in Gandhinagar, Vijayawada and took my product from there.
6. There are 16 products in our company.
7. Whenever I sell these products to two people, the company gives a commission of Rs.1000 on my name.
8. In this way I have said my friends and relatives about this scheme and products, likewise 1 person grew into 2, 2 grew into 4 and so on and as of now I am earning Rs.60,000 as commission per week.
9. In the same way I have given training to other people and help them to increase the turnover.
10. There are 98 franchises of our company in India.
11. We are buying products and applications from these franchisees by paying the concerned prices through DD.
12. After purchasing product, all independent distributors are paid commissions on product sales.
13. We consider this as multi level marketing.
14. There are around 18000 people who have purchased products and are placed below me as distributors.
15. My ceiling money does not exceed 1,30,000 per week.
16. We some times conduct Business Opportunity presentation.
17. We keep on training our distributors and that’s how we increase our company sales.
18. We create complete confidence on our company to the public and cheat them by telling that they can make huge money in less time and make them join us as distributors.”
4. It is contended for the petitioners that the Company which  is based in Chennai is indulging in direct selling of products to the customers for lower cost which is upto 70% of maximum retail prize (MRP)
of the products by directly securing them from reputed Companies like Siyaram, Big Bazar, Wipro, HCL etc. and in that process, the Company avoids C & F Agent, Super Stockist, Stockist, Distributor, Wholesale dealer and retail dealer and also avoids cost of advertisement and that by virtue of direct selling of products to the customer/buyer who joins as
independent distributor/member of the Company and that in that process, the company earns huge profits out of which 35% is distributed among independent distributors.  In the process of business of the Company, when a member joins as independent distributor, by purchasing products of the Company, he has to sell the Company’s products to at least two new customers and in which event, he gets profits/commission from out of value of products sold by him to those two new members and also certain percentage of money paid by those two new members towards their membership.  Those two new members/independent distributors have to again sell the products by each of them
to two more outsiders; and the activity percolates to the downwards.  In all such types of Direct Selling or Multi level marketing, the process reaches a saturation level when new members joining at that level will not be able to sell products to any new members.
5. In State of West Bengal v Swapan Kumar Guha[2] three Judges Bench of the Supreme Court after re-arranging definition of Money Circulation Scheme in Section 2(c) of the Act, observed:
“On a plain reading of the said definition, the requirements of a
money circulation scheme are-
(i) there must be a scheme;
(ii) there must be members of the scheme;
(iii) the scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrollment of members into the scheme or there must be a scheme for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or contingency relative or applicable to the enrollment of members into the scheme;
(iv) the event of contingency relative or applicable to the enrollment of members into the scheme will however not be in any way affected by the fact whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription.”
6. This Court is of the opinion that at the threshold of the investigation, it may not be proper for this Court to scrutinize the alleged activity of the Company and its branches, independent distributors etc.
and to come to any conclusion whether the said activity attracts the definition of Money Circulation Scheme contained in Section 2(c) of the Act or not.
7. Senior Counsel for the petitioners also fairly submitted that even if investigation is allowed to be proceeded further, freezing of bank accounts of the Company by the police during investigation is causing untold hardship to the Company in its business activity.  For that reason, the Company filed Crl.P.No.9771 of 2011 questioning the same and seeking quashing of directions of Sub-Inspector of Police, Arundalpet (L&O) Police Station, Guntur directing IDBI Bank to freeze two CMS accounts of the Company in that bank, by way of letter dated 04.10.2011 addressed to the bank.  Further, after CID took over investigation of all the cases, Inspector of Police, CID, RCIU, Guntur addressed another letter dated 15.05.2012 to ING Vysya Bank Limited, Chennai to freeze another account of the Company pending investigation.  Questioning the same, the Company filed W.P.No.17544 of 2012.
8. It is contended by the Public Prosecutor that Section 7(1)(d) of the Act empowers the Investigating Officer to seize all things which are intended to be used or reasonably suspected to have been used in
connection with any Money Circulation Scheme.  It is further contended that it is only for the purpose of ultimate seizing of money which is derived from the Money Circulation Scheme covered by these offences, the Police Officers have frozen bank accounts of the Company.
9. As interim measure in Crl.P.No.9771 of 2011, this Court permitted the Company to withdraw Rs.11.00 crore from IDBI Bank to meet immediate needs of the Company towards his obligations to its employees etc.  It is reported that the Company could not withdraw the said amount as by then the Kerala High Court  also have passed an order relating to freezing of the said accounts.  In the circumstances and having regard to there being prima facie case for the prosecution, this Court is of the opinion that it would not be just and proper to allow the Company to deal with the bank accounts as it likes.
10. I find no legal or justifiable reason either for quashing FIRs in these crimes or for quashing letters of Police Officers freezing bank accounts of the Company pending investigation.
11. In the result, all the criminal petitions as well as writ petition are dismissed.  At the same time, in case of any compulsive circumstances and dire necessities, the Company is at liberty to approach
this Court by separate and independent petitions for withdrawal of portions of monies lying in the bank accounts.          

Dt.11th December, 2012

2007(4) ALT 808 (D.B)
(1982) 1 Supreme Court Cases, 516

Thursday, 7 February 2013

Indian 'Herbalife' schill quotes Mao!

Here's some much-needed comic-relief for readers:

A deluded 'Herbalife' fanatic from India (who hasn't disclosed his/her name) has sent me a link to this recent, kitsch propaganda video (apparently produced by 'Herbalife India') complete with an arrogant command to remove 'The American Dream Made Nightmare' and a scripted-accusation:

'... you are sick evil man for you try killing hopes and dreams of millions of my brothers and sisters...'


At 10 minutes 38 seconds into the video, a particularly-unconvincing Indian 'Herbalife' schill who steadfastly pretends to be living in a Utopia where everyone is beautiful, perfectly-proportioned, healthy, wealthy, happy and free (thanks to 'Herbalife' products and training), quotes from 'Chairman'  Mao's 'Little Red Book.' 


For the benefit of 'Capitalist' readers who are perhaps unfamiliar with these 'Communist' cultural references, the Schill is asking the 'Herbalife' faithful to take Mao as their role-model. He is describingthe step by step journey through the 'Herbalife' ranks to become a superhuman 'leader' (which he insists ordinary mortals like himself can undertake), and comparing it to Mao's 'Long March' which (although lasting 370 days during 1934-35 and totalling 8000 miles) is itself considered to be the 'Chairman's' first step towards the supreme leadership of Communist China. Mao later wrote that he was only able to complete his journey to the top, because of all the strong people around him.

I'm now wondering how long the 'Herbalife' Ministry of Truth will allow this highly-revealing admission to remain on the Net?

David Brear (copyright 2013)