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2016 (5) TMI 1511
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.... founders of "QI Group" formed a company under the name and style "Gold Quest International Private Limited". The applicants/ accused also joined the said group in 2006. Gold Quest International Private Limited used to sale gold plated coins. In the year 2000 the rate of gold was Rs. 5,000/- per 10 gms., however, they used to sale the gold plated coins for Rs. 30,000/- though the gold was less than 10 gms. Thereafter, the purchaser of the gold coin becomes a member of the group. He was required to make more persons as the member of the Gold Quest International Private Limited. On the basis of the number of members which he brings, he was placed to get the commission. So he was supposed to bring minimum two persons and the hierarchy had pyramid structure. So one member treated at the right side and second member was treated on the left side. The volume of the said business after enrollment of new member increases when 1000 units are credited to the account of the old member which are treated equivalent to the commission of Rs. 11,500/-. 3. It is the case prosecution that in the year 2003 a fraud was detected and the offence was registered at Chennai against the said Gold Quest In....
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....ssued by the said company. However, all these holiday packages were not given but only few were provided. Many persons also became members could not get a business as promised by the company. Therefore they felt deception. Thereafter the police registered offence on 16th August, 2013 against the present applicants/accused. At that time, it was found that nearly 90000 members were cheated at the hands of applicants/accused and they suffered wrongful loss of amount of Rs. 425 Crores and as such money laundering was of Rs. 425 Crores. However, till today during the investigation, it was found that number of members who are deceived are around 5 lacs and misappropriation and money laundering was about more than of Rs. 1000 Crores. Hence, this complaint. 5. Mr. Amit Desai, Mr. Ashok Mundargi, the learned Senior Counsel and Mr. Girish Kulkarni, the learned counsel for the applicants have submitted that the applicants/accused are innocent. They have neither cheated anybody nor committed any offence. It is submitted that the complainant is a motivated person who has lodged a false complaint against the applicants/accused due to business rivalry. They submitted that the applicants/accuse....
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....reme Court Cases 694 and Jogindarsingh vs. U.P and Others, 1994(4) SCC 260. The learned senior counsel Mr. Amit Desai has submitted that in any case arrest is not required and arrest is not justified especially when the punishment is less than 7 years. In order to substantiate his submissions, he relied on Arnesh Kumar vs. State of Bihar and Another, (2014) 8 Supreme Court Case, 273. He also relied on Amway India Enterprises vs. Union of India, 2007 SCC OnLine AP 494. 7. The learned senior counsel has submitted that since the case of Joginder Kumar vs. State of U.P. And Others, (1994) 4 Supreme Court Case, 260 to the case of Arnesh Kumar (supra), the law on the point of arrest has changed as the police officer must be satisfied about necessity and jurisdiction of such arrest on the basis of investigation. He submitted that there should not be violation of human rights. He relied on Gurbaksh Singh Sibbia and Others vs. State of Punjab, (1980) 2 Supreme Court Cases, 565 and Siddharam Mhetre (supra), wherein the principle of arrest in the cases of anticipatory bail is explained. He further placed reliance on the case of Bhadresh Bipinbhai Sheth vs. State of Gujrat, 2015 SCC OnLine ....
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....m Malaysia and through the said group these activities are carried out under different name and style. There are multiple bank accounts, there is mens rea to cheat the people and thus, the companies i.e. Transview Enterprises India Pvt. Ltd. and Vanmala Hotels, Travels and Tourism Services Pvt. Ltd. and Vihaan Direct Selling (I) Pvt. Ltd. cheated many persons and that is continued till today. There is money- trail which is disclosing money level circulation scheme. In support of his contentions, he relied on the following authorities: 1) State of Gujrat vs. Mohanlal Jitamaljiporwal and Another, 1987 AIR 1321. 2) Narayanan Rajagopalan vs. The State of Maharashtra, in Cri. A.B.A. No. 1416 of 2013 dated 2^nd April, 2014. 3) Ashok Bahirwani vs. The State of Maharashtra, in Cri. A.B.A. No. 1083 of 2012 dated 19^th March, 2013. 4) Amway India Enterprises vs. Union of India, 2007 (4) ALT 808. 5) Y.S. Jagan Mohan Reddy vs. C.B.I., in Cri. Appeal No. th 730 of 2013, S.C. dated 9 May, 2013. 6) Kasturchand Ramlal Badjate vs. The State of Maharashtra, (1981) 83 BOMLR 8. 7) Central Bureau of Investigation vs. Anil Sharma, S.C, rd Cr....
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....tated that QuestNet Enterprise (P) Limited carried out their business and after the prosecution of QuestNet Enterprise (P) Limited, they introduced the business plan under the name and style Q Net Limited. He submitted that the company gives rosy picture of 'money back scheme' to the public at large. However, once a person become a member, he is called as 'Independent Representative' (I.R.) and then he can get the commission. However, he does not earn money as promised. The applicants /accused and the other representatives are not accessible and finally the person lose his money. He submitted that the same persons are rotated from QuestNet Enterprise (P) Limited to Vanmala Hotels, Travels and Tourism Services Pvt. Ltd. and Vihaan Direct Selling (I) Pvt. Ltd. He submitted that the payments were promised and the partnership was as per the business plan. The compensation promised by the Q Net Limited was on weekly basis. He submitted that as Government found that there is a fraud of Crores of rupees, Government agency started to investigate the matter and through website qnet.net.com which was blocked by the order of the Magistrate Court. He submitted that nearly 15000....
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....d. However, the order passed by the Madras High Court was subsequently set aside by the Hon'ble Supreme Court as the parties entered into a compromise. As per the requirement of Section 2(c) of M.P.I.D. Act, it is necessary to collect deposits. In the present case, no deposits are collected. 13. Before adverting to the facts of the present case, it is useful to cull out and reproduce the ratio laid down by the Hon'ble Supreme Court in some important cases. 14. The question before the Hon'ble Supreme Court in the case of Amway India (supra) was whether the business activity being carried out by the Petitioner comes under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and the other issue was about the legality of seizure and search carried out by the investigating agency at various places of Amway. The Writ Petitions were dismissed by the Supreme Court and it was held that the rights of seizure and search on various places are legal. The Hon'ble Supreme Court in the case of Amway India (supra) has discussed and analyzed money circulation scheme and where it is held as under: "Money circulation scheme" means any scheme, by whatever ....
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.... Schemes (Banning) Act, 1978 is bailable. 18. In the case of Shrinivasa Enterprise (supra), the competency of the legislature to enact the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 was challenged. In the said case, the Hon'ble Supreme Court has observed that as under : "In the matters of economics, sociology and other specialised subjects, Courts not embark upon views of half-lit infallibility and reject what economists or social scientists have, after detailed studies, commanded as the correct course of action. The final word is with the Court in constitutional matters but judges hesitate to 'rush in' where even specialists 'fear to threat', If experts fall out, Court, perforce, must guide itself and pronounce upon the matter from the constitutional angle, since the final verdict, where constitutional contraventions are complained of, belongs to the judicial arm." 19. In the case of Bhadresh Sheth (supra) the charges for the offences punishable under Sections 506(2) and 376 of Indian Penal Code and the complaint was given in the year 2001 and after 17 years the Supreme Court tried the matter for cancellation of anticipatory ba....
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....money is also not an offence. Therefore, if such project is launched, that itself cannot be an offence. There is no compulsion or force operated on the public to be a member of the business or participate in the business. Thus, the option was always open to the aggrieved persons to say no to the scheme. However, the things are not as straight as they are perceived on the surface. Assuming that the scheme was launched with a noble object to give benefit to maximum people to make money quickly and easily by selling products of the company, however, after going through the material placed before me including the statements of the witnesses, I am of the view that in the mid-way, the intention of the applicants/accused, who are the Directors and shareholders of the company, became dubious. They had knowledge that more members are suffering financial losses and they are not satisfied with the products. The claim that the wellness products i.e., Biodisk and Chi Pendent are medicinal and spiritual products, is after all, a matter of faith. However, the applicants/accused have launched these wellness products with ulterior motive and with correct judgment of vulnerability of the people. The....
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.... will of the others, have an advantage which they can turn to their account. In the present case, such advantage is gained undoubtedly by dishonestly and in deceitful manner. There are instances of dishonest concealment of facts i.e., genuine nature of the products and by the persons working for the company i.e., I.Rs and with intention to earn wrongful gain to them and the company and wrongful loss to others. The motto of the company 'sell more, earn more' appears very attractive and innocuous. However, this motto is fully camouflaged. The company stands on a basic statement that people can be fooled. Thus, the true motto is 'sell more earn more' by fooling people. 25. The submissions of the learned Senior Counsel for the applicants-accused that selling the product at a very high price is not an offence, is true and cannot be controverted in the marketing business. It depends on the marketing capacity of an individual and so the level of his profit. However, in this marketing, the IRs are directed to give all the names and details of the relatives, phone numbers of their acquaintances, references and thereafter the persons in the higher level, who are given some....