NARESH BALASUBRAMANIAM Vs. STATE OF KARNATAKA AND ANOTHER

JUDGEMENT

(1.) This petition is filed in the following background:

(2.) It is contended on behalf of the petitioner that there is no factual basis, in the petitioner being named as one of the accused. Though the petitioner is an executive of the company Q-Net at its place of business in Malaysia, and the petitioner being a resident of Malaysia, there are no allegations against the petitioner of having committed any criminal acts and the entire exercise of an investigation has not only resulted in the petitioner being drawn into proceedings with which he is totally unconnected but it has other serious repercussions against a legal business of a multinational business entity. The Q-Net and its licensees are claimed to be a legitimate business group operating their business all over the world similar to other direct marketing conglomerates such as M/s. Amway, M/s. Oriflame, M/s. Hindustan Unilever, etc., which business is basically marketing of products directly from the manufacturer to the consumer thus drastically reducing the price, which would otherwise be much higher on account of distributors wholesale agents, sub-agents, retailing outlets, being involved. Apart from advertising and other indirect expenses boosting up the price of the same product, manifold vis-a-vis conventional marketing. That this is an accepted business model the world over and cannot be termed as fraudulent.

(3.) On the other hand, the learned Government Pleader would seriously oppose the petition and in line with the Statement of Objections filed, would claim that the so-called business of the petitioner's company is nothing but what is termed as a "pyramid business", and that the modus operandi is that each of its customers is called an Independent Representative (IR) who makes an initial investment and in turn introduces two other customers who are also are required to invest and would in turn act as IRs and they in turn introduce two more customers each, and all the sale transactions that take place by the chain, that can grow endlessly, would fetch a share of the price to each IR, under whom the pyramid base grows.