The judgment established the principle that engaging in deceitful inducement, aggressive marketing, and fraudulent business practices, particularly in the context of money circulation schemes, constitutes illegal activities under the relevant Acts.

Mridula Bhatkar, J.

1. The applications are moved for pre arrest bail as the applicants/accused are facing charges for the offences punishable under Sections 120(B) and 420 of the Indian Penal Code and under Sections 3, 5 and 6 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and Section 3 of Maharashtra Protection of Interest of Depositors (In Financial Establishments Act) in C.R. No. 316 of 2013 registered with Oshiwara police station, Mumbai. The offence is registered at the instance of one Gurupreetsingh Anand on 16th August, 2013.

2. It is the case of the prosecution that in the year 2000 one Vijay Ishwaran and Joseph, the founders of "QI Group" formed a company under the name and style "Gold Quest International Private Limited". The applicants/ accused also joined the said group in 2006. Gold Quest International Private Limited used to sale gold plated coins. In the year 2000 the rate of gold was Rs. 5,000/- per 10gms., however, they used to sale the gold plated coins for Rs. 30,000/- though the gold was less than 10gms. Thereafter, the purchaser of the gold coin becomes a member of the group. He was required to make more persons as the member of the Gold Quest International Private Limited. On the basis of the number of members which he brings, he was placed to get the commission. So he was supposed to bring minimum two persons and the hierarchy had pyramid structure. So one member treated at the right side and second member was treated on the left side. The volume of the said business after enrolment of new member increases when 1000 units are credited to the account of the old member which are treated equivalent to the commission of Rs. 11,500/-.

3. It is the case prosecution that in the year 2003 a fraud was detected and the offence was registered at Chennai against the said Gold Quest International Private Limited company. So the owners of the said company repaid everything to the members to whom they have promised to pay and the offence was compounded. Hence, the first information report was quashed. However, the company continued the illegal activities by forming another company by different name i.e. "QuestNet Enterprise (P) Limited". They started one "Pallava Resorts Private Limited" and also launched various products especially the products by name Biodisck, Chi Pendent, Watches, Gold Coins. These products were sold from minimum Rs. 30/to Rs. 7 lacs. The false representation was made by the company that the said product Biodisk cures diseases. Biodisk is to be kept in the water and due to molecular effect, the quality of the water is changed and if that water is consumed, it will give good result and cures the diseases including like cancer.

4. It is the case of the prosecution that the applicant/accused Suresh Thimiri was appointed as Indian head and C.E.O. of QuestNet Enterprise (P) Limited and the applicants/accused Michael Ferreira and Malcholm Desai had joined the said company in the year 2006 and actively participated in the expansion of this company. In 2008 the offences were registered at Chennai, Andhra Pradesh and Karnataka but the said company continued its activities of chit fund and money laundering till 2012. They stopped the business of QuestNet Enterprise (P) Limited company but formed a new company by name Q Net. Under this brand of Q Net, three companies i.e. Vanmala Hotels, Travels and Tourism Services Private Ltd, Trans view Enterprises India Private Limited and Vihaan Direct Selling (I) Pvt. Ltd. started its business since April, 2012. In the said company, the applicant/accused Malcholm Desai was holding 20% shares and the applicant/accused Michael Ferreira was holding 80% shares. Other two applicants/accused Magaral Balaji and Shinivas Vanka were appointed as Directors of the Vihaan Direct Selling (I) Pvt. Ltd. Under the said Vihaan company, they continued the activities of selling the same products of Biodisk, Gold coins, Chi Pendents etc. They established one Pallav