Judgment :- Common Judgment (S.J. Mukhopadhaya, J.) As all these cases relates to Network Marketing System, they were heard together and disposed of by this common judgment. 2. The writ appeal has been preferred by a third party, who was not party to the writ petition, against order dated 7th Jan., 2005, passed by learned single Judge in W.P. No.22674/04. That was a writ petition preferred by one M/s. Apple FMCG Marketing and another for a declaration that the selling its products through its distributors by using the Network Marketing System is legal and not in contravention of the provisions of Prize, Chits and Money Circulation Scheme (Bonding) Act, 1978 or any other law. The respondents, authorities of State, appeared, filed counter affidavit and took specific plea that no FIR had been lodged against the company nor any investigation was taken up by the appellants against the said company and, thereby, denied the allegation that the said company is being disturbed by the police. It was specifically mentioned that the police would not interfere with in business conducted by any person in accordance with law and that the writ petition as was filed was only on apprehension and fear of intervention. In view of the stand taken by the State authorities, the writ petitioner of the said case, 1st respondent herein, sought permission to withdraw the said writ petition. However, learned single Judge, instead of allowing the petitioner to withdraw the writ petition, made certain adverse observation against the writ petitioner, as also against all those who are in the business of "Network Marketing System", declaring multi-level marketing system covered by Money Circulation Scheme. 3. In view of such observation of learned single Judge, it appears that number of FIRs were lodged against those in "Network Marketing System" business. It gave rise to filing of other writ petitions challenging the FIR or for one or other declaration as sought for in the analogous writ petitions. 4. 3. In view of such observation of learned single Judge, it appears that number of FIRs were lodged against those in "Network Marketing System" business. It gave rise to filing of other writ petitions challenging the FIR or for one or other declaration as sought for in the analogous writ petitions. 4. As the matter could be disposed of on a short point, i.e., whether the observations made by learned single Judge was called for, it is not necessary to discuss all the facts, except the relevant ones and noticed hereunder :- The 1st respondent, M/s. Apple FMCG Marketing Pvt. Ltd., was the petitioner in W.P. No.22674/04 pleaded that it was a company registered under the Companies Act, marketing various products, including shampoo, tea, coffee powder, after-shave lotion, etc., under the brand name through "Network Marketing System". The said marketing differs from conventional sale through a distributor and retail network; any person could take the marketing and sell and make an earning; it is done by several reputed companies like Hindustan Lever Limited, Indian Express, etc. Several unemployed youths have taken up the marketing of these products and have earned satisfactory income depending on their talents and efforts. According to it, no complaints were received from any consumer about the quality of the goods sold under the scheme of network marketing. The company sells products to the consumer and the consumer, in turn, sell the products through their teams and earn commission out of the sale. It avoids many middle men, cost of advertisement, etc. The marketing process is carried out directly by recruiting the customers themselves as distributors of the products and services; the company regularly organises business development meetings and seminars, distributor meetings, etc. The participants of the meeting are encouraged to take up the distributorship of the products and are suitable registered, if they so desire. There is no service fee for registration as distributor. Any person, who is interested is given a produce for the price fixed. The distributors are encouraged to enrol more distributors. The commissions are given only as per the volume of the sales made by individual distributor and his team. This system ensures that intermediate distributors are like a chain leading to the customers and the company. There are only two stages, viz., stockists and distributors. The distributors can introduce another person as a distributor and he will also get commission. The commissions are given only as per the volume of the sales made by individual distributor and his team. This system ensures that intermediate distributors are like a chain leading to the customers and the company. There are only two stages, viz., stockists and distributors. The distributors can introduce another person as a distributor and he will also get commission. The distributor has to put in his efforts in selling the products and then only he will get the commission. Other details relating to process of network marketing, its beneficial mechanism for the conduct of trade and commerce, etc., were also highlighted. 5. A grievance was made that to malign the name of the company by publishing reports in a magazine, the company had to face with roving enquiries by the police and the companys promotion seminars and meetings were disturbed by police. The stockists and distributors of the company had also faced similar harassment. It was in this background, while general allegations were made against police, it was submitted that such action infringes the fundamental right of the said company conferred under Article 19 (1) (a) of the Constitution. 6. As notice earlier, the State and police authorities in their affidavit denied such allegation stating that no such action has been taken with specific statement that they may take action only after following the procedure. In view of such statement, the 1st respondent, the petitioner of the earlier case, wanted to withdraw the writ petition, but learned single Judge refused to allow the same and made general observations against all persons in "Network Marketing System", including the following observations and findings :- "22. It is true that several companies including Multinational Companies carry on the business of the "Multilevel Marketing" and it is also true that the Executive and the law enforcing authorities keep a blind eye on such activities. This also does not make an illegal act legal. It is always a fact that the law enforcing authority would try to close the stable only after the horse had escaped." That is, the law enforcing authority would realise that this scheme would ultimately leave a large number of persons cheated. Thereafter, after losing their money, they would approach the executive complaining that they were cheated. Till such time, the law enforcing authorities do not act. Thereafter, after losing their money, they would approach the executive complaining that they were cheated. Till such time, the law enforcing authorities do not act. They do not take preventive action to enforce the provisions of the existing law. * * * * * * * * 26. As stated above, this scheme called Multi-level Marketing creates a chain of customers and the long and unbroken chain would ensure larger amount of quick or easy money. The shorter and missed links in the chain would result in earning lesser commission. Therefore, there should be unbroken chain or customers. Secondly, the person does not get the value of the money he pays; thirdly, the companies are collecting service charges as stated above in a sale of goods. No service charges can be collected while the goods are sold. 27. For all these reasons the scheme of so called Multi-level Marketing cannot be said not to violate the provisions of Sec.2(c) of the Act. 28. Apart from that this Multi-level Marketing results in exploitation of the personal influence of each and every distributor or his close relative. As stated already, a superior Officer or his ward when he involves in this Multi-level Marketing, the subordinates are forced to become members in the chain. Though it may not amount to violation of this Act, it would attract some other laws; it may result in undue influence, extraction, coercion, etc. 30. It is, indeed, appreciable that the Chief Secretary and the Director General of Police have stated that though there are no complaints received against the petitioners so far, if any complaints are received or if the activities of the company amounts to violation of any of the act, they would definitely take action against the petitioners. That shows that they are alive to the situation. 31. It is true that the petitioners are comparatively a small fish in the business of the so called Multi-level Marketing. There are other comparatively bigger associations or institutions or companies which adopt similar schemes. It is for the Director General of Police and other law enforcing authorities to have a watchful eye on all such activities and to take timely action as and when it is called for. * * * * * * * * 33. There are other comparatively bigger associations or institutions or companies which adopt similar schemes. It is for the Director General of Police and other law enforcing authorities to have a watchful eye on all such activities and to take timely action as and when it is called for. * * * * * * * * 33. In this part of India, people are gullible and fall an easy prey to the tall promises made through the media. That was the reason why the lottery tickets were sold in large numbers in this State. Many companies want to exploit this attitude of people and float many schemes and lure the people to join the schemes. Only when they ultimately lose the money, they realise that they were misled; by that time it becomes too late. Thereafter, they approach the law enforcing authorities and question them how did they permit such schemes. That is the reason why the police keep a watch over such activities. The petitioner is not entitled for direction for prohibiting the authorities from keeping surveillance over any meeting. Sec.7 of the Act confers the right on the police officer to enter any premises, where he has got a reason to suspect that the premises are being used for purposes connected with the promotion or conduct of any prize chit or money circulation scheme in contravention of the provisions of the Act. 36. The event is enrolment of new members; the commission received is relative to such enrolment of new members into the scheme. Therefore, the argument of the learned counsel for the petitioners that there is no promise of quick or easy money is not correct for the reasons stated above. Thus, the so-called Multi-level Marketing, though called by a very attractive name, squarely falls within the definition of Money Circulation Scheme under the Act. Hence, it is prohibited by the Act. It is for the law enforcing authorities to take appropriate action." 7. Learned counsel for the appellant submitted that the aforesaid observations were uncalled for as no such issue having been raised either by 1st respondent/writ petitioner or by any other respondents to the said writ petition, including State of Tamil Nadu or the Union of India. Learned counsel for the State also could not justify the observation as made by learned single Judge. .8. Learned counsel for the State also could not justify the observation as made by learned single Judge. .8. We have heard the parties and noticed the submission and the judgment rendered by learned single Judge. We are of the view that the observation made by learned single Judge was not called for. If any individual or a person or a group of persons, including a company, violates any provision of law, it is always open to the competent authority or in appropriate cases the police to take action in accordance with law for alleged violation; a court of competent jurisdiction may also pass order after hearing the parties and on appreciation of evidence, but, no general omnibus observation could be made alleging illegal activity in respect of a particular trade, which may affect all the persons involved in such trade. Such finding cannot be given in absence of any allegation till made by any complainant; investigation is made by the investigating authority and is decided by a court of competent jurisdiction, after notice to the person. .In the circumstances, we hold that the observation made by learned single Judge in the impugned order dated 7th Jan., 2005, against the 1st respondent/writ petitioner and in general against all, who are involved in the business of "Network Marketing System" was uncalled for and cannot be sustained in the eye of law. .9. So far as the writ petitions are concerned, in two of them, FIRs have been challenged. The main ground taken is that the FIRs have been lodged in view of the observation made by learned single Judge in W.P. No.22674 of 2004. Though such allegation has been made, but it is not apparent from the FIRs that the same was lodged because of the order in question passed by learned single Judge. Further, a declaration in regard to the observations made by learned single Judge having given by this Court, as recorded in the preceding paragraph, it is not necessary to give any further declaration as sought for in one of the writ petition, W.P. No.1299/06. Further, a declaration in regard to the observations made by learned single Judge having given by this Court, as recorded in the preceding paragraph, it is not necessary to give any further declaration as sought for in one of the writ petition, W.P. No.1299/06. As the petitioners of W.P. Nos.18879 and 18880/07 can to raise all the questions as raised in the present writ petitions, before a court of competent jurisdiction at appropriate stage, such as taking of cognisance or framing of charges, we are not inclined to grant any relief under Article 226 of the Constitution of India. The parties may move before appropriate forum at appropriate stage and if charge is framed and may prove their innocence and defend themselves. 10. For the reason aforesaid, we set aside the order passed by learned single Judge dated 7th Jan., 2005, in W.P. No.22674 of 2004. The State Government and its authorities are directed not proceed pursuant to order aforesaid passed by learned single Judge, though it will be open to them to proceed in any matter in accordance with law in appropriate cases. The writ appeal is allowed. W.P. Nos. 1299/06, 18879 and 18880/07 are dismissed with the aforesaid observations. Consequently, connected miscellaneous petitions are closed. But there shall be no order as to costs. * * * * * * * *