Karnataka High Court on QNeT case – Adarsh Maharashtra

Bengaluru: The Karnataka High Court quashed criminal charges initiated against Malaysian resident of Indian origin Naresh Balasubramanium, a senior executive of direct selling company QNeT. The complainant Pragya alleged that she was made to pay money to QNeT for products but she never received those products.

Balasubramanium was the managing consultant for Hong-Kong based QNeT which undertook its India operations through Vihaan Direct Selling (India).

Justice Anand Byrareddy gave a fair hearing to both parties before giving his verdict, “The instant case is a typical case where criminal legislation which are not even remotely applicable to the circumstances of the case have been invoked to substantiate the charges. The dispute, if at all, is between a consumer and a direct seller and out to be adjudicated under the provisions of the Consumer Protection Act. As a consequence, the First Information Report and the charge sheet are unsustainable and deserve to be quashed.”

The verdict re-emphasizes the observations of the Hon’ble Supreme court of India. It has repeatedly observed that criminal law should not be set in motion to settle civil disputes by giving such disputes a colour of criminality. In Sagar Suri vs. UP [(2000) 2 SCC 636] and Hiralal Bhagwati vs. CBI [(2003) 5 SCC 257], the Supreme court has observed that matters essentially of a civil nature should not be given a cloak of criminal offences and criminal proceedings should not be used as short cut for other remedies available in law. The court has further observed that in such instances, the jurisdiction under Section 482 ought to be exercised to quash such criminal proceedings.

The landmark judgement comes as a relief for QNet, whose image had taken a hit due to the unnecessary charges of criminal nature being levied on its senior executive. The judgement is also set to change the way direct-selling and multi-level marketing companies are perceived. These companies did business to the tune of $1Billion in India as per industry body FICCI and do play a great role in eliminating unnecessary middlemen and drastically reducing the final price of the product to the consumer.

Commenting on the development, Raj Vasudevan, the chief legal officer of Qnet, said, “This is a step in the right direction. We are happy to see that justice has been served and elated that the honourable court has recognised the importance of the direct selling industry to the economy”.



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