Monday, 29 November 2010
Saturday, 27 November 2010
Friday, 26 November 2010
Wednesday, 24 November 2010
Monday, 22 November 2010
Here is the important part of the Andhra Pradesh High Court judgement which held Amway India guilty of garnering easy and quick money. Amway apologists may claim that it is now collecting only Rs. 995 as entry fee. That does not absolve them from the crime. They are still making easy and quick money through minimum monthly PV of 50.
As pleaded by the petitioners themselves, out of Rs.4,400/- a substantial part, namely Rs.1,800/- is collected as subscription fee, license fee, business kit etc. To qualify for earning commission a member has to earn the minimum monthly PV of 50 which he will get by selling products worth Rs.2,000/-. Respondent No.6 in para-11(c) of his counter affidavit specifically pleaded that “Amway” (First petitioner) would automatically get a business of the quantum of Rs.1080/- crores (4,50,000 x 2,000 x 12(months) ) per annum which would yield an astronomical profit and it cannot but be stated as “easy/quick money” without any service to the distributors/members irrespective of whether they sell the products or not, though the company may conveniently refer it as “turnover by sale of products”. Significantly, this assertion made in the counter affidavit is not denied in the rejoinder of the petitioners. They have merely tried to explain the said allegation by offering certain justifications. The petitioners have not specifically denied that the first petitioner would get a sum of Rs.1,080/- crores by ensuring that each distributor maintains the minimum sales level. Even though the scheme per se does not stipulate that each distributor has to maintain the minimum required business level, prescription of minimum level of 50 PV to qualify for getting commission is sufficient inducement for the members to relentlessly strive for maintaining the PV level at or above the said minimum levels. (
It is, thus, evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme. By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money. On the part of the promoter by pushing each member to achieve the minimum sales worth Rs.2,000/- per month, (this sale includes enrollment of new members) he is assured of about 1000 crores per annum. All this squarely satisfy the description of quick/easy money. In addition to this, it is an admitted fact that each person in order to continue to be the distributor, shall pay renewal subscription fee of Rs.995/- per annum. In para-11(b) of the counter affidavit on the admitted number of distributors of 4,50,000 this amount is calculated at about Rs.45 crores per annum. These figures are not denied by the first petitioner in its rejoinder. The plea of the first petitioner that there is no compulsion that a member shall renew his distributorship looks to us to be specious. Once a person becomes a distributor in a scheme of this nature where the sops in the shape of commission are so luring, it would be very difficult for a member to withdraw from their membership to avoid payment of the annual renewal subscription fee. (
From the whole analysis of the scheme and the way in which it is structured it is quite apparent that once a person gets into this scheme he will find it difficult to come out of the web and it becomes a vicious circle for him. In any event the petitioners have not specifically denied the turnover they are achieving and the income they are earning towards the initial enrollment of the distributors, the renewal subscription fee and the minimum sales being achieved by the distributors as alleged in the counter affidavit. By no means can it be said that the money which the first petitioner is earning is not the quick/easy money. By promising payment of commission on the business turned out by the down-line members sponsored either directly or indirectly by the up-line members (which constitutes an event or contingency relative to enrollment of members), the first petitioner is earning quick/easy money from its distributors, apart from ensuring its distributor earn quick/easy money. Thus the two ingredients are satisfied in the case of promoter too. We are, therefore, of the considered view that the scheme run by the petitioners squarely attracts the definition of “Money Circulation Scheme” as provided in Section 2(c) of the Act. (
Friday, 19 November 2010
For the benefit of the new readers of our BLOG, the notice of the crime branch of Sikkim State Government, Indian Union, warning people about the imminent danger of joining money circulation schemes in general and Amway India in particular is reproduced.
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R.O. NO. 735/IPR/PUB/07-08 (I) Dt. 4/2/08.
State Police Headquarter Department
It is notified for the information of the public in General that the Amway India Enterprises started their business operation in
In the year 2006, a case was registered against Amway and its distributors by CID/Andhra Pradesh on a specific complaint on 24/09/06 vide Crl. Case No. 10/2006 U/S 385/420 IPC and Section 4, 5 & 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
The Division Bench of High Court of Andhra Pradesh vide order dated 19/07/2007, delivered a landmark and path breaking judgment holding that the scheme of Amway India Enterprises is nothing but money circulation scheme. Later, Amway challenged the High Court order through Special Leave Petition in the Apex Court of India, which was dismissed on 14/08/2007 by the Supreme Court.
As discovered by CID, E.O.W. (Economic Offences Wing) Andhra Pradesh, Amway
Thus, the business being carried out and carried on by the above companies by misleading/misguiding the innocent people have appeared to be illegal in the eyes of the law of the land and hence adequate publicity is given to the public in General for their awareness.
Sr. Superintendent of Police
Crime Branch, CID,
Gangtok.R.O. NO. 729/IPR/PUB/07-08(III) Dt. 5/2/08