Kerala High Court
Modicare Ltd vs Superintendent Of Police on 2 April, 2025
Author: Kauser Edappagath
Bench: Kauser Edappagath
W.P.(C) No. 859 of 2013 &
Crl.R.P.No. 1344 of 2011
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2025:KER:28136
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH
WEDNESDAY, THE 2ND DAY OF APRIL 2025 / 12TH CHAITHRA, 1947
WP(C) NO. 859 OF 2013
PETITIONER:
MODICARE LTD
HAVING ITS OFFICE AT 5 COMMUNITY CENTRE,
NEW FRIENDS COLONY, NEW DELHI-110 065,
REPRESENTED BY ITS ASSOCIATE VICE PRESIDENT
AND AUTHORISED SIGNATORY,
ANIL SETH , AGED 52 YEARS
BY ADV SRI.MADHU RADHAKRISHNAN
RESPONDENTS:
1 SUPERINTENDENT OF POLICE
ECONOMIC OFFICES WING-III, CBCID,
KOZHIKODE-673 301, KERALA.
2 INSPECTOR OF POLICE
ECONOMIC OFFICES WING-III, CBCID,
KOZHIKODE-673 301, KERALA.
3 STATE OF KERALA
REPRESENTED BY THE STATE POLICE CHIEF,
POLICE HEADQUARTERS,
THIRUVANANTHAPURAM-695 010.
BY ADV ADVOCATE GENERAL OFFICE KERALA
SRI.GRASHIOUS KURIAKOSE - ADGP
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
02.04.2025, ALONG WITH CRL.REV.PET.1344/2011, THE COURT ON
THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C) No. 859 of 2013 &
Crl.R.P.No. 1344 of 2011
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2025:KER:28136
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH
WEDNESDAY, THE 2ND DAY OF APRIL 2025 / 12TH CHAITHRA, 1947
CRL.REV.PET NO. 1344 OF 2011
AGAINST THE ORDER DATED 30.12.2010 IN CC NO.49 OF 2008 OF
CHIEF JUDICIAL MAGISTRATE, KOTTAYAM
REVISION PETITIONER/COMPLAINANT:
STATE OF KERALA
REPRESENTED BY THE SUB INSPECTOR OF POLICE,
VAKATHANAM
BY SRI.GRASHIOUS KURIAKOSE - ADGP
RESPONDENT/ACCUSED:
1 SAMEERKUMAR MODI AND OTHERS
MANAGING DIRECTOR, MODICARE LTD.,
5-COMMUNITY, CENTRE,
NEW FRONT COLONY, NEW DELHI-10065.,
RESIDENCE ADDRESS - A1. MAHARANI BAG,
NEW DELHI, DELHI-110025).
2 AJITH MATHEW SO. P.T.MATHEW
PALLIKKUNNEL VEEDU, U.C.COLLEGE,
ALUVA TALUK, ERNAKULAM DISTRICT.
3 M.S.VINOD SO. SREEDHARA HEDGEN
MADATHILPARAMBIL VEEDU,
KIZHAKKUM BHAGOM KARA,
ETTUMANOOR VILLAGE,
KOTTAYAM DISTRICT.
BY ADV SRI.MADHU RADHAKRISHNAN
THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY
HEARD ON 02.04.2025, ALONG WITH WP(C).859/2013, THE COURT ON
THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C) No. 859 of 2013 &
Crl.R.P.No. 1344 of 2011
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2025:KER:28136
JUDGMENT
Both the W.P.(C) and Crl.R.P. are connected.
2. The petitioner in W.P.(C) No. 859 of 2013 is a company registered under the Companies Act, 1956 engaged in the business of manufacturing and sale of cosmetics and other household products through direct/network marketing. In the year 2008, the Sub Inspector of Police, Vakathanam, Kottayam registered a crime against the petitioner company and its officials alleging offence under Sections 2(c) and 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (for short, 'the Banning Act'). The allegation is that the company was involved in doing business falling under the Banning Act. After investigation, the police filed Ext.P1 final report against the company's managing director and its employees. The case was taken on file by the Chief Judicial Magistrate Court, Kottayam (for short, 'the trial court') as W.P.(C) No. 859 of 2013 & Crl.R.P.No. 1344 of 2011 ..4..
2025:KER:28136 C.C.No.49 of 2008. All the accused in C.C.No.49 of 2008 filed discharge petition before the trial court for discharge under Section 239 of Cr.P.C. contending that no prima-facie case has been made against them. The trial court, after a detailed consideration of the business plan of the company and after evaluating the materials, allowed the discharge application as per Ext.P3 order in W.P.(C) No. 859 of 2013. The State has filed a revision petition challenging Ext.P3 order in W.P.(C) No. 859 of 2013 as Crl.R.P.No.1344 of 2011.
3. After Ext.P3 order was passed, the Kannur Town Police registered another crime against the petitioner company as FIR No.6 of 2013 (Ext.P5) alleging that the business carried out by the petitioner company is in violation of Sections 4, 5 and 6 of the Banning Act. It is alleged that after the registration of the FIR, the 2nd respondent in WP(C) No.859/2013 carried out search at the premises of the petitioner company at Cochin and sealed the business W.P.(C) No. 859 of 2013 & Crl.R.P.No. 1344 of 2011 ..5..
2025:KER:28136 premises. Ext.P5 in W.P.(C) No. 859 of 2013 is the FIR. W.P. (C) No. 859 of 2013 has been filed to quash Ext.P5 FIR. There is a further prayer to unseal the business premises of the petitioner.
4. I have heard Sri.Madhu Radhakrishnan, the learned counsel for the petitioner in W.P.(C) No.859 of 2013 (respondent No.1 in Crl.R.P.No.1344 of 2011) and Sri.Grashious Kuriakose, the learned ADGP.
5. A perusal of Ext.P3 order in W.P.(C) No.859 of 2013 passed by the trial court would show that the trial court had examined in detail the entire materials on record and found that the accused in C.C.No.49 of 2008 were not engaged in any money circulation scheme by making any quick or easy money, which is the main ingredient of Section 2(c) of the Banning Act and hence there are no sufficient grounds to frame charge against the accused. It is evident from Ext.P3 W.P.(C) No. 859 of 2013 & Crl.R.P.No. 1344 of 2011 ..6..
2025:KER:28136 order in W.P.(C) No.859 of 2013 that the entire plan of the petitioner company was examined by the trial court and found that the scheme was not violating the Banning Act. On going through the materials on record and the impugned order, I see no reason to take a different view. While registering Ext.P5 FIR in W.P.(C) No.859 of 2013, the Kannur Town Police was well aware of Ext.P3 order of discharge. The offence involved in both crimes is essentially under Section 4 of the Banning Act. The allegation in both the crimes are more or less similar. In Ext.P3 discharge order in W.P.(C) No.859 of 2013, the trial court found that the accused are not engaged in any money circulation scheme by making any quick or easy money, which is the main ingredient of Section 2(c) of the Banning Act. The specific allegation in Ext.P1 final report in W.P.(C) No.859 of 2013 is that the petitioner company through its employees and agents is engaged in the money circulation scheme, violating the provisions of the W.P.(C) No. 859 of 2013 & Crl.R.P.No. 1344 of 2011 ..7..
2025:KER:28136 Banning Act. Thus, the allegation and the offence involved in Ext.P5 FIR in W.P.(C) No.859 of 2013 are one and the same as that of the allegations in Ext.P1 final report. Since I have confirmed Ext.P3 discharge order, the petitioner company cannot be prosecuted pursuant to Ext.P5 FIR for the same offence.
6. The learned ADGP invited my attention to G.O.(P) No.6/2023/CAD dated 28.03.2023 issued by the Government of Kerala establishing a monitoring committee to regulate the direct selling entities and direct sellers. As per the said order, the entire working of the direct marketing/selling entities would be under the monitoring committee. The powers of the monitoring authority include referring the contravention or violation of other laws and rules to the law enforcement authorities concerned under the provisions of such Acts and Rules. The learned ADGP submits that in the event the monitoring committee finds any contravention or violation of W.P.(C) No. 859 of 2013 & Crl.R.P.No. 1344 of 2011 ..8..
2025:KER:28136 law on the part of the petitioner company in future, their right to refer the same to the police for initiating appropriate legal action may be reserved.
7. In view of the above findings, Ext.P5 FIR in WP(C) No.859/2013 is hereby quashed. The impugned order in Crl.R.P.No.1344/2011 is confirmed. However, this judgment would not stand in the way of the monitoring committee to refer any contravention or violation of law by the petitioner company to the police for initiating appropriate legal action. The respondent Nos. 1 and 2 in W.P.(C) No.859 of 2013 are directed to unseal the business premises of the petitioner located in 38/2440, 1st floor, Laj Arcade, Kadavanthra.
Crl.R.P.No.1344/2011 is dismissed and WP(C) No.859/2013 is allowed as above.
Sd/-
DR. KAUSER EDAPPAGATH JUDGE APA W.P.(C) No. 859 of 2013 & Crl.R.P.No. 1344 of 2011 ..9..
2025:KER:28136 APPENDIX OF WP(C) 859/2013 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE FINAL REPORT DATED 14.05.2008 FILED AGAINST THE PETITIONER AND ITS EMPLOYEES BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, CHANGANASSERY EXHIBIT P2 TRUE COPY OF THE ORDER DATED 01.01.2009 IN CRL.R.P.NO.3429/2008 PASSED BY THIS HON'BLE COURT EXHIBIT P3 TRUE COPY OF THE ORDER DATED 30.12.2010 PASSED BY THE CHIEF JUDICIAL MAGISTRATE COURT, KOTTAYAM IN C.C.NO.49/2008 EXHIBIT P4 TRUE COPY OF THE CRIMINAL REVISION PETITION NO.1344/2011 DATED 06.04.2011 FILED BY THE STATE OF KERALA BEFORE THIS HON'BLE COURT EXHIBIT P5 TRUE COPY OF THE F.I.R. 6/2013 DATED 02.01.2013.
EXHIBIT P6 TRUE COPY OF THE LETTER DATED 01.01.2013 SUBMITTED BEFORE THE 2ND RESPONDENT BY THE AREA SALES MANAGER EXHIBIT P7 TRUE COPY OF THE TYPICAL CONSULTANT APPOINTMENT FROM THE SALE OF THE PRODUCTS OF THE COMPANY EXHIBIT P8 TRUE COPY OF THE E-MAIL COMMUNICATION DATED 20.02.2013 FROM THE FRANCHISEE TO THE PETITIONER EXHIBIT P9 TRUE COPY OF THE NOTICE DATED 12.03.2013 ISSUED BY THE 2ND RESPONDENT POLICE INSPECTOR, C.B.C.I.D, KOZHIKODE TO SMT.THAHIRA, THE LANDLORD OF THE PETITIONER AT KANNUR EXHIBIT P10 TRUE COPY OF THE NOTICE DATED 11.03.2013 ISSUED BY THE 2ND RESPONDENT POLICE INSPECTOR, C.B.C.I.D, KOZHIKODE TO P.N.RADHAKRISHNAN, W.P.(C) No. 859 of 2013 & Crl.R.P.No. 1344 of 2011 ..10..
2025:KER:28136 DISTRIBUTOR OF THE PETITIONER COMPANY EXHIBIT P11 TRUE COPY OF THE NOTICE DATED 11.03.2013 ISSUED BY THE 2ND RESPONDENT POLICE INSPECTOR, C.B.C.I.D, KOZHIKODE TO DEVASSI P.R., DISTRIBUTOR OF THE PETITIONER COMPANY EXHIBIT P12 TRUE COPY OF THE NOTICE DATED 11.03.2013 ISSUED BY THE 2ND RESPONDENT POLICE INSPECTOR, C.B.C.I.D., KOZHIKODE TO NANDAKUMAR.C., DISTRIBUTOR OF THE PETITIONER COMPANY EXHIBIT P13 TRUE COPY OF THE NOTICE DATED 11.03.2013 ISSUED BY THE 2ND RESPONDENT POLICE INSPECTOR, C.B.C.I.D., KOZHIKODE TO C.MOHANDAS, DISTRIBUTOR OF THE PETITIONER COMPANY EXHIBIT P14 TRUE COPY OF THE NOTICE DATED 11.03.2013 ISSUED BY THE 2ND RESPONDENT POLICE INSPECTOR, C.B.C.I.D., KOZHIKODE TO K.R.BALAKRISHNAN, DISTRIBUTOR OF THE PETITIONER COMPANY EXHIBIT P15 TRUE COPY OF THE NOTICE DATED 11.03.2013 ISSUED BY THE 2ND RESPONDENT POLICE INSPECTOR, C.B.C.I.D., KOZHIKODE TO K.LAXMANAN, DISTRIBUTOR OF THE PETITIONER COMPANY EXHIBIT P15 TRUE COPY OF THE CIRCULAR NO.26/2015 ISSUED BY THE COMMISSIONER OF COMMERCIAL TAXES ALONG WITH THE GUIDELINES OF KERALA GOVERNMENT EXHIBIT P16 TRUE COPY OF THE REGISTRATION NUMBER AND PERMISSION TO PAY UNDER THE COMPOUNDING SCHEME ISSUED TO THE PETITIONER BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, KOCHI EXHIBIT P17 TRUE COPY OF THE LETTER ISSUED BY THE DEPUTY COMMISSIONER OF POLICE DATED 31.10.2016 EXHIBIT P18 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF PUBLIC AFFAIRS, FOOD AND PUBLIC DISTRIBUTION W.P.(C) No. 859 of 2013 & Crl.R.P.No. 1344 of 2011 ..11..
2025:KER:28136 EXHIBIT P19 TRUE COPY OF THE REGISTRATION NUMBER AND PERMISSION TO PAY UNDER THE COMPOUNDING SCHEME ISSUED TO THE PETITIONER BY THE ASST. COMMISSIONER OF COMMERCIAL TAXES, KOCHI DATED 26/4/2016 EXHIBIT P20 TRUE COPY OF THE DECLARATION AND UNDERTAKING AND THE RELEVANT DOCUMENTS OF THE PETITIONER COMPANY CONCERNING ITS DIRECT SELLING PLANS WHICH IS SUBMITTED BEFORE THE ADDITIONAL SECRETARY, DEPARTMENT OF CONSUMER AFFAIRS, ALONG WITH THEIR ACKNOWLEDGEMENT DATED 8/12/2016 EXHIBIT P21 TRUE COPY OF THE GUIDE-LINES ISSUED BY THE STATE GOVERNMENT FOR MONITORING ACTIVITIES OF THE MULTILEVEL MARKETING/DIRECT SELLING COMPANIES BASED ON THE CENTRAL GUIDE-LINES EXHIBIT P22 TRUE COPY OF THE ACKNOWLEDGEMENT RECEIPT ISSUED BY THE STATE OF KERALA FROM THE OFFICE OF THE DIRECTOR, CIVIL SUPPLIES TO THE PETITIONER ON 9/11/2018 EXHIBIT P23 THE GAZETTE COPY OF THE CONSUMER PROTECTION (DIRECT SELLING) RULES, 2021 EXHIBIT P24 THE SCREEN SHOT OF SUCH SUBMISSION BEFORE THE DEPARTMENT OF CONSUMER AFFAIRS, GOVERNMENT OF KERALA EXHIBIT P25 TRUE COPY OF THE G.O.(P) NO.6/2023/CAD DATED 28/3/2023 ESTABLISHING A MONITORING COMMITTEE BY THE STATE OF KERALA RESPONDENT EXHIBITS EXHIBIT R2(a) TRUE COPY OF THE NOTIFICATION NO.H2- 54642/58/HOME(A) DATED 14.08.1958