The Supreme Court today directed the Andhra Pradesh police to complete its investigations against direct marketing multinational Amway within six months. The state high court had declared that Amway's business scheme was an offence under the Prize Chits and Money Circulation Scheme (Banning) Act, 1978.There were widespread raids and seizures on Amway establishments last December following a complaint that it was forcing people to enroll themselves in its scheme. There was also a public interest case in the high court. The company appealed to the Supreme Court complaining that its whole business in the state has come to a stop following the raid and the criminal case.Senior counsel R F Nariman argued before a bench headed by Justice H K Sema that Amway's business did not fall under the Act as there is no circulation of money. On the other hand, the scheme is for distribution of goods. There is no quick and easy money either, as the persons who volunarily joined the scheme had to work hard to get points proportionate to the efforts they put in. There is no element of chance or contingency either, as the commission earned is related to the business volume, counsel said.Additional Solicitor General Gopal Subramaniam, representing the state government, asserted that the scheme was totally violative of the provisions of the Act. Regarding the company's grievance that its business had come to a stop following the complaint, counsel said that the investigation was stopped by the filing of the writ petition by the company in the high court.According to the complaint, it is financially impossible for such a chain of direct sales to work endlessly with profit and only the initial members benefitted while a majority lost money as the chain was bound to break at some point. The public interest petition alleges that the activities of the company violated laws related to drugs, income tax and sales tax.
