The High Court on Thursday directed the state government not to take coercive measures in the investigation against Vihaan Direct Selling (India) Pvt Limited. The company had challenged the initiation of proceedings under the provisions of the Karnataka Protection of Interest of Depositors (KPID) Act claiming that it is only a direct selling agency.
A division bench comprising Chief Justice Ritu Raj Awasthi and Justice Suraj Govindaraj said that the investigation into the complaints filed against the company may go ahead and added that the company shall co-operate with the said investigation. The court meanwhile ordered notice to Advocate General since the constitutional validity of the KPID Act has been challenged in the petition and posted the matter to February 21, 2022.
Appearing for the petitioner, senior advocate Kamini Jaiswal contended that the company is not a financial establishment and not involved in soliciting investment, taking deposits. She said that the petitioner is only a direct selling agency and a sub franchisee of Q Net Ltd, a Hong Kong-based company.
The council said that Vihaan has more than four lakh customer base in India and does business in water purifiers, nutritional products, watches. She also submitted that the Supreme Court had already said that no coercive action should be taken against the petitioners in pending matters.
Appearing for the state government, the additional government advocate said that 22 complaints were received against the petitioner company concerning more than 400 victims.
The government advocate said that the petitioner company is indulged in ponzi scheme in violation of Reserve Bank of India (RBI) regulations.
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