CENTRAL ECONOMIC INTELLIGENCE BUREAU Vs. STATE OF DELHI

JUDGEMENT

(1.) By this petition, the petitioner has assailed an order dated 21st February, 2009 whereby the learned Additional Sessions Judge dismissed the revision petition filed by the petitioner against an order of learned MM accepting the closure report of the police wherein it was stated by police that no offence under Section 409/420/120-B read with Section 3, 4 & 5 of The Prize Chits and Money Circulation Schemes (Banning) Act, 1978, (in short PCMCS Act) was made out.

(2.) The petitioner had filed a complaint against respondents no. 2-9 alleging therein that the respondents were indulging into cheating people by floating a scheme of money circulation. It was stated that respondents, in the guise of creating direct distribution network of its product which included weightloss drugs has been found indulging into violation of provisions of Section 3, 4 & 5 of PCMCS Act. An investigation into these allegations was conducted by the police and after conducting investigation, police filed a closure report. Objections against this were filed by the petitioner. The learned Metropolitan Magistrate however, observed that the law regarding money circulation has been laid down by Supreme Court in State of West Bengal & Ors. v. Swapan Kumar Guha & Ors., 1982 1 SCC 561 and in view of this judgment of Supreme Court, the case of the respondents/accused was not covered under Section 3, 4 & 5 of PCMCS Act and police rightly filed the closure report. In revision the learned Sessions Judge concurred with the view of learned MM and dismissed the revision petition.

(3.) The complainant submitted that on analyzing the business model and activities of the company, the marketing strategy was only a camouflage and the product which actually costed very small amount was being marketed at a very high value and each customer for this weight loss drug, if enrolled more customers, was to get commission on the weight loss drug and the amount of commission was so high that the entire scheme was nothing but a money circulation scheme.