The Hindu : Court won't restrain law enforcing agencies

Online edition of India's National Newspaper
Friday, Feb 14, 2003

Southern States

Southern States - Tamil Nadu

Court won't restrain law enforcing agencies

By Our Staff Reporter

CHENNAI FEB. 13. The Madras High Court today refused to restrain law enforcing agencies from initiating action against V-Can Network (P) Ltd, which sells magnetic beds and other consumer durables under the multi-level marketing scheme.

The company's managing director, R. Radhakrishnan, had moved the court for a direction to the Home Secretary, the DGP and the Commissioner of Police asking them not to `prevent his company from carrying on its day-to-day business of selling their products and services under the multi-level marketing scheme'.

Justice P. Sathasivam, dismissing petitions from the company and five of its agents, said: "I am of the view that the police officer, in the course of investigation, can seize or prohibit the operation of the bank account of not only the accused, but also any of his relations, if there is evidence to show that such assets have direct links with the commission of the offence".

Making it clear that the court cannot interfere at this stage, the Judge said, "... taking note of all the materials placed before the court and the complaint of one Jayaraman and 30 others... I am of the view that the prayer sought for by V-Can Network at this crucial stage of investigation cannot be acceded to".

However, Mr. Justice Sathasivam stated that in case of `unnecessary delay on the part of the investigating agency, in the light of sealing of business premises and freezing of bank accounts, it is open to them (petitioners) to approach the appropriate forum/court for necessary direction. "This court hopes that the investigating agency undertakes the task promptly and completes the same expeditiously".

'Fraud on innocent people'

As per definition 2 (c) of the Prize Chits and Money Circulation Schemes (Banning) Act 1978, money circulation scheme or multi-level marketing or whatever be the name, is a fraud being played on the hapless and innocent public by way of manipulation and deceit, the Judge observed.

"It is demonstrated before me that as per the scheme, every member/distributor has to be necessarily enrolled with a membership fee... and each member/distributor has to falsely induce and enrol more members and if that is done he gets a minor share of the ill-gotten wealth and thereby the chain continues by manipulation and deceitful false claims", Mr. Justice Sathasivam noted.

The Judge also concluded that there was no malafide intention on the part of the authorities, and that there was no basis for the allegation that V-Can Network had been singled out for investigation. "Police have already taken action against promoters of a multicrore company, Cymbiotic Ltd and the Japan Life, and about 80 persons had been arrested", he pointed out.

The company is facing charges under various provisions of the Prize Chits and Money Circulation Schemes (Banning) Act 1978, Indian Medical Council Act, Drug and Magic Remedies Objectionable Advertisement Act 1978 and the IPC. After the registration of the first complaint on January 24 this year, 30 more complaints have been filed.

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