Recently the Hon’ble Supreme Court of India has held in KURIACHAN CHACKO AND OTHERS .Versus STATE OF KERALA which was reported vide (2008)8 SCC 708 about the Money Circulation Schemes as explained U/s.2(c) of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, the extracts of the relevant paragraphs of the judgment is as follows- Para No.36. In our opinion, the requirement of law is "an event or contingency relative or applicable to the enrolment of members into the scheme" and nothing more. The plain language of the section does not insist that such enrolment of members must be by the members already enrolled. It is impossible to read into the statutory provision such requirement which is not stipulated by Parliament. Upholding of the argument of the learned counsel would result in rewriting of the section, which is certainly not permissible in our constitutional system.
- Para No.37. The event or contingency on the happening of which the amount would become payable must be relative or applicable to the enrolment of the members into the Scheme. It is immaterial by whom such members are enrolled. It may be by members, by promoters or their agents or by gullible sections of the society suo motu (by themselves). The sole consideration is that payment of money must be dependent on an event or contingency relative or applicable to the enrolment of more persons into the Scheme, nothing more, though nothing less. In the present case, the second ingredient is very much present.
- Para No.41. The High Court also upheld the argument of the prosecution that the Scheme was a '"mathematical impossibility". 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 truly 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 as they would by then have been deceived and deprived of their money.
Full Judgement is available on the website of Supreme Court of India :
It is a good effort to inform people about these fraudulent schemes.
ReplyDeletethe report is good, but there are some business firms, who run genuine mlm business, which is accepted by so many countries, and very much beneficial to all who are ready to work and determined, and doesnt fall under prize chit and money circulation act of 1978. what we need is, not to ban mlm, but to have a monitoring authority, which will help the public to identify the genuine companies...
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