JASDEEP SINGH BAINS Vs. U.T. CHANDIGARH

JUDGEMENT

(1.) THIS petition filed under Section 438 of the Code of Criminal Procedure, 1973 (for brevity, 'Cr.P.C.') seeks the relief of prc -arrest bail in case FIR No. 276 dated 27.11.2002 registered under Sections 3 and 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (for brevity, 'the Act') at Police Station Sector 26, Chandigarh. According to the allegations made in the First Information Report (for brevity, 'FIR') which is registered on the basis of letter written by the Finance Secretary, Union Territory, Chandigarh that online Job Work Com. Private Limited, S.C.O. No. 34 Sector 26, Madhya Marg, Chandigarh is enrolling members for the purpose of marketing Products/Services/AMC of some foreign concerns and companies. It has been alleged that the activities of the company of which petitioners I to 3 arc the Directors violated the provisions of Sections 3 and 4 of the Act. Such lapse being a cognizable offence has resulted into registration of the aforementioned FIR. The detailed FIR is Annexure P -1. Apart from violation of the aforementioned provisions, it has been pointed out that the investigation reveals commission of offences under Sections 406 and 420 of the Indian Penal Code, 1860 (for brevity, 'IPC') as the gullible public is being mislead and deceived. The complainant has alleged that the company is running multi level marketing scheme in which a business associate has to enroll further business associates under him against payment of Rs. 16,500/ -per enrolment being product cost, training and registration charges. For each business associate being enrolled, the business associate gets a commission of Rs. 5,500/ - from the company and the incentive goes on increasing. The company is neither rendering any worthwhile service or selling any product for the hefty amount of incentive for enrolling new members. The total amount of incentive given in brochure runs into Rs. 15,066/ - crore under the home based business plan. The total direct incentive amount is Rs. 212490.13 crore for effecting 2,15,23,359 sales under the said plan. The company is mainly alluring people by offering hefty commission and enrolling members by running some pyramid scheme with some camouflages. However, it is not complying with the provisions of the Act, the case was filed at one stage as untraced on 8.1.2003. The company had filed Criminal Misc. No. 53809 -M of 2002 for quashing the aforementioned FIR. However, the same was dismissed on 3.7.2003 by observing that prima facie the allegations made in the FIR show that the scheme floated by the petitioner is money circulation scheme. It is after investigation that the veil is to be lifted. Thereafter, the Inspector General of Police, Union Territory, Chandigarh ordered for rcinvestigation of the case. At this stage, it would he appropriate, to make a brief reference of the observations made by this Court while dismissing the petition filed by the petitioners which reads as under:

(2.) THE respondents have filed the reply wherein the stand taken is that the FIR has been registered at the instance of Reserve Bank of India. It has further been asserted that the petitioners are not associating and co -operating with the investigating agency despite the fact that notices in writing under Section 91, Cr.P.C. were sent to the petitioners. Three notices are alleged to have been sent under Section 160 Cr.P.C. All these notices have been collectively appended as Annexure R -2. It has further been claimed that modus operandi unearthed till date, appears to be so complex that without custodial interrogation. It would not be possible to fathom the facts and criminal justice and investigation would be subverted. It has also been asserted that substantial public money is involved and the petitioners have committed offences under Sections 3 and 4 of the Act as also under Sections 406 and 420, IPC. It would be appropriate to refer to the averments made in paragraphs 8A and 9 of the reply filed by the respondents which read as under:

(3.) MR . Vinod Sharma, learned Counsel for the petitioners has argued that punishment provided under the Ac t is three years and, therefore, it has not been considered to be a serious offence even if it is assumed that all the allegations in the FIR arc correct. The learned Counsel has pointed out that no offence under Section 420, IPC is made out because neither there is any misrepresentation or suppression of material facts with the object of defrauding or cheating the public. According to the learned Counsel, the petitioners are ready to associate themselves with the investigation but on account of fear of torture and police detention, they have avoided to appear before the investigating agency. The learned Counsel has placed reliance on a judgment of the Supreme Court in the case of State of West Bengal and Ors. v. Swapan Kumar Guha and Ors. , to argue that similar nature of FIR was quashed by the Calcutta High Court and the decision was upheld by the Supreme Court. The learned Counsel has also relied upon another judgment of the 108 Supreme Court in the case of the State of Madhya Pradesh v. Mir Basti Ali Khan and Ors. , and submitted that no offence under Section 420, IPC is made out.