Mlm Draft Private Bill

7/27/2019 Mlm Draft Private Bill

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MULTI LEVEL MARKETING (REGULATION) AND PYRAMID

SELLING SCHEME (BANNING) BILL

An Act to provide for the registration of Multi Level Marketing entities,

for regulation of direct selling, banning of Pyramid selling and for other

matters connected therewith.

CHAPTER IPreliminary

1. Short title, extent and commencement :-

(1) This Act may be called Multi Level Marketing (Regulation)

and Pyramid selling scheme (Banning) Act 2013

(2) It extends to the whole of ..

(3) It shall come into force.

2. Definitions

(a) Direct Sale':- means a sale by a direct seller acting in the course

of business as such.

(b) Controller means the controller of Direct Sales appointed

under Section 4.

(c) Direct Selling means marketing of consumer products/ services

directly to the consumers generally in their homes or homes of

others, at their work place and other places away from permanent

retail locations, usually through explanation or demonstration of

the products by a Direct Seller or by mail order slaes.


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(d) Mail order sales means sale of goods and services which a

person conducts either by himself or through any person

authorized by him, by receiving an offer for a sale Contract by

mail.

(e) Goods means every kind of movable property other than

actionable claims, negotiable instruments, shares, debentures and

money.

(f) Customer means the person to whom goods or services are

supplied or are to be supplied under contract and if the rights of

that person are transferred by operation of law, includes the

person for the time being entitled to those rights.

(g) Service means service of any description which is made

available to potential users for valuable consideration

(h) Multi level marking entity means an entity which sells,

distributes or supplies for valuable consideration, goods or

services through independent distributors or direct seller, at

different levels where in participants in the marketing programme

may recruit other participants and where in commission, bonus,

refunds, discounts, dividends or considerations in the programme

are or may be paid as a result of the sale of such goods andservices or the action or performances of additional participants.

(i) Pyramid selling scheme means any scheme or arrangements for

the distribution or the purported distribution of a commodity

where by a person receives any benefit, directly or indirectly as a

result of the recruitment of one or more additional participants in

the scheme or arrangement but shall not include such scheme or

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arrangement for the sale, or other distribution of a commodity or

any class of such scheme or arrangements as the Authority may

by order prescribe, subject to such terms or conditions as may be

specified in the order.

(j) commodity means any goods, services whether tangible or

intangible, capable of being the subject of a sale.

(k) inventory leading means that a plan or operation requires or

encourages its independent distributors to purchase inventory in

an amount that unreasonably exceeds that which the direct seller

can expect to resell for ultimate consumption, or to use or

consume in a reasonable time period.

3. Multi Level Marketing Regulatory Authority

The Government shall constitute a Multi Level Marketing

Regulatory Authority in the State for the purpose of registration,

control and supervision of multi level Marketing activities.

4. Controller,

(1) The Government may appoint from among public officers, a

controller not below the rank of ..and other officers for the

purpose of this Act.

(2) The Controller shall subject to the general direction and control ofthe government, perform the duties imposed and exercise the rights

and powers conferred upon him under this Act and the Regulations.

(3) The Officers appointed under Subsection (1) shall be under the

direction and control of the Controller.

(4) All officers appointed under the Act shall be deemed to be public

servants within the meaning of Indian Penal Code.

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5. Powers and Functions of the Authority

(1) to implement the provisions of this Act and Rules made

thereunder.

(2) to give registration or to refuse registration to multi level

marketing entities

(3) to control and supervise the conduct of multi level marketing/

direct selling entities in the State.

(4) to receive returns relating to the business conducted by multi

level marketing entities.

(5) to monitor the tax being paid by the multi level marketing

entities to the commercial Taxes Department of Govt. of ..

(6) to inspect and call for records relating to the multi marketing

entities.

(7) to receive complaints from the Direct Sellers, stockists and

consumers against multilevel marketing entities and to provide

for settlement of disputes among them or to give legal advice for

taking appropriate legal actions in accordance with the law for the

time being in force so as to remedy their grievance.

(8) to ensure that the consumers are not being cheated by any

multilevel marketing entities.(9) to enter the business places of multilevel marketing entities

during business hours of that work place in order to enquire on

the facts or examine documents or evidence in order to assure the

execution of this Act.

(10) to collect or take goods in reasonable quantities as sample

for examinations or analysis without paying for such goods.

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(11) to issue or publish information concerning goods or services

which may cause damage to or be prejudicial to the rights of

the customers.

(12) to submit opinion to government concerning policy and

measures for regulating and promoting multilevel marketing

business.

(13) to perform such other functions and duties as may be

prescribed.

CHAPTER II

REGISTRATION OF MULTI LEVEL MARKETING ENTITY

6. Multi level Marketing business to be carried on only under

licence.

1. Registration is mandatory for Multi level Marketing Entities,

2. No person shall carry on any direct sales business unless it is a

Company incorporated under the companies Act 1956 (Central

Act..) and holds a valid licence granted under Section 10.

3. Any person who contravenes subsection (2) shall be guilty of an

offence and shall, on conviction, be liable to a fine not exceeding.

.. or imprisonment for a term not exceeding..years or to both,

for a second or subsequent offence, to a fine not exceeding or to

imprisonment for a term not exceeding . years or to both.

7. Submission of application for licence

Every Multi level marketing entity carry on multilevel marketing

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in the state shall, within such date as the government may appoint in

this behalf apply for registration before the Authority and every such

multi level marketing entity which intends to carry on such

marketing in the state shall apply for registration.

8. How to apply for Registration

1. The application for registration shall be made in such from and in such

manner as may be prescribed.

2. The application for registration shall contain the following:-

(a) a copy of the Memorandum and Aarticles of

Association duly verified by a statutory declaration made

by a director of he applicant.

(b) copy of audited balance sheet, profit and loss account of

immediate preceeding 3 years and reports of the auditors and the

directors of the applicant.

(c) a copy of certificate of incorporation.

(d) a statement on:

(i) the name ,place and date of the establishment of the

applicant.

(ii) the name, place and date of the establishment of its

related corporations.(iii) the principal business and field of operation of the

applicant and of its related corporations.

(iv) the names and addresses of the directors of the applicant

and its related corporations.

(e) a copy of PAN/TAN/TIN/CST/

(f) a copy of certificate of Trademark.

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(g) receipt of payment of registration fees,

(h) compensation plan of the applicant.

(i) such other information or documents as may be specified

by the controller.

(3) If the compensation plan is to be amended, the multi level

marketing entity shall notify the amendment to the controller before

applying the amendment to practice.

(4) An application under this section may be withdrawn at any time

before it is granted or refused.

(5) Any person who provides false or misleading information or

documents under this section shall be guilty of an offence.

CHAPTER III

9. Conditions for Direct selling, Direct marketing etc

Every Multi level marketing entity carry on multi level marketing inthe state shall comply following conditions: namely-

(a) It shall be a company incorporated under the Companies Act 1956.

(b) The main objective of Multi level marketing entity shall be

conducting of Multi level marketing business.

(c) It shall have a registered Trade Mark granted under the Trade Marks

Act 1999

(d) It shall maintain records both manual as well as electronic with

complete details of their goods, services, terms of services, price,

income plan, details of direct sellers under it and all relevant

informations about the company and business. The website of the

Multi level marketing entity shall be updated regularly.

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(e) It shall not require the direct seller to purchase any goods and

services or to pay any membership fee as a condition precedent for

registration or allotment of direct sellers.

(f) It shall not require the direct sellers to pay any money by way of

renewal charges.

(g) It shall ensure full refund of the prices, if any goods returned by its

customer on the ground of any defect or inferior quality as against

the information given by it regarding such goods within 30 days of

purchase.

(h) It shall not terminate or shift direct seller from the list of enrolment

or genealogy without prior permission of Authority.

(i) The direct selling entity shall provide photo identity card to direct

seller showing the name of Multi level marketing entity, Trade

mark, No of registration and details of direct seller.

(j) commission to the direct seller shall be paid through fund transfer

system within 10 days after the finalization of monthly business.

(k) the income plan of Multi level marketing entity shall not be

based on

(i) the number of new direct sellers registered or enrolled.

(ii) products which have no real world market place.

(iii) products which are sold at inflated price

(iv) mandatory purchase of company product

(v) plans which result in inventory loading distributors

(vi) substantial cash investment requirements

(vii) mandatory purchase of peripheral or accessory products or services.

(viii) plans in which distributors are left with substantial unsold

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convicted under Prize Chits and Money Circulation Schemes

(Banning) Act 1978 (Central Act 43 of 1978) or the Securities and

Exchange Board of India Act 1992 (Central Act 15 of 1992) or the

Prevention of Money Laundering Act 2002 (Central Act 15 of

2003)

(3) No Multi level marketing entity whose permit has been cancelled

shall be entitled to a new permit for one year.

11. Security Deposit

(a) Where a registration certificate has been granted by the

Authority, it shall require the Multi level marketing entity to

deposit an amount as security as may be prescribed.

(b) After depositing the security amount the Authority shall issue

a certificate of registration in such a form as may be

prescribed.

12. Validity of registration certificate

(a) Every Registration certificate granted or renewed , unless

revoked, shall be valid for a period of three years from the date

of issue of the certificate.

(b) Every Multi level marketing entity shall renew the registration

certificate within one month of its expiry.(c) Every Multi level marketing entity shall deposit an amount as

security as may be prescribed which shall be proportionate to

the total turn over of such Multi level marketing entity in the

state at the time of renewal of registration.

13. Revocation of Registration:

1. The controller of the Authority may revoke a certificate of

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registration issued under this Act for the following reasons namely:-

(a) If the Multi level marketing entity has been convicted, in relation to

the conduct of its business under the Act stated in clause (2) of

Section 10.

(b) If the Multi level marketing entity has failed to comply with any

of the conditions specified under this Act or the rules made

thereunder in relation to the conduct of its business.

(c) If the Multi level marketing entity has failed to comply with the

conditions imposed as per the certificate of registration.

(d) If the Multi level marketing entity fails to submit required details

regarding its direct seller.

(e) If the Multi level marketing entity fails to remit proper taxes to the

government

(f) If the Multi level marketing entity fails to distribute benefits to the

direct sellers three months continuously.

(g) If it is found that any material information in relation to the Multi

level marketing entity was not disclosed at the time of registration or

renewal of certificate of registration and the certificate of registration

was obtained stating false, misleading or inaccurate information or

on misrepresentation, fraud or dishonesty.(h) If number of complaints affecting the interest of the consumers or

direct sellers or stockist working under the Multi level marketing

entity have been received in the govt. or the Controller against such

entity.

(i) If the Multi level marketing entity has ceased to carry on the

business which the registration certificate has been obtained.

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(j) If it demonstrated the incapacity or unworthiness to carry on the

business in respect of which the permit was granted.

(k) If a receiver or manager of the Multi level marketing entity's

business has been appointed by the Court.

(l) When a licence has been revoked or cancelled under this Act, the

holder of the licence shall return the licence to the Authority.

(2) The controller shall revoke a licence granted to a Multi level

marketing entity under Section 10 if he is satisfied that-

(a) a winding up order has been made against it or

(b) a resolution for its voluntary winding up has been passed.

14 Imposition of restrictions in lieu of revocation of

registration:-

1) Where the controller is satisfied that there are grounds on which his

power to revoke a licence is exercisable under section 13 but the

circumstances are not such as to justify revocation, the controller

may restrict the licence by-

(a) imposing such limits on its duration as he thinks fit

(b) imposing such conditions for such time period as he thinks desirable

or expedient for the protection of the customers or prospective

customers or other persons dealing with the multilevel marketingentity.

(c) imposing both such limits and conditions.

2) Failure to comply with any conditions imposed under this section

shall be a ground for the revocation of the licence but shall not

invalidate any transaction.

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15. Power to impose new condition and to vary or revoke

conditions:-

The controller may at any time impose new conditions on a licence

granted under Section 10, or vary or revoke any conditions imposed

on such licence under section 14 or under this section, or may very

or revoke any conditions already under this section.

16. Notice of revocation of registration, imposition of restrictions

or variations, revocation or imposition of new conditions

(1) Where the Controller proposes-

(a) to revoke a license granted under section 10

(b) to restrict a licence under Section 14 or vary any restriction or

condition under that section or

(c) to vary or revoke any condition, or impose any new condition under

section 15, he shall give the entity written notice of his intention to

do so, specifying the nature of the proposed action and the grounds

on which he propose to take such action and he shall give the

licensee as opportunity to make written representation thereon

within 15 days from the date of service of the notice.

(2) After considering any representations made by the license under

section (1) the controller shall decide-(a) whether to proceed with the proposed action

(b) Whether to restrict or vary the restriction or to vary the condition in

a different manner.

3. The controller shall give the licensee written notice of his decision

under section (2) and the decision shall take effect from the date on

which such written notice is served on the licensee.

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17. Surrender of licence

(1) A Multi level marketing entity may surrender its certificate of

registration at any time after giving one month written notice to the

Authority and a public notice in its website and in four daily

newspapers having wide publicity in the State.

(2) On receipt of the notice the Controller shall make an enquiry within

15 days of such notice and he shall ascertain as to whether all the

payments and other benefits lawfully due to the Government,

customers, direct sellers and stockists from the Multi level

marketing entity has been paid or remitted and he shall fix the

amount and pass orders to pay such amount due to the Government,

customers, direct sellers and stockiests.

18. Attachment of Security Amount

1. Where the amount payable as per the decision of the Controller

under Section 17 is not paid or remitted within time allowed by the

controller, he shall order to pay such amount from the security

deposit of the multi level marketing entity deposited with the

Authority at the time of registration or renewal.

2. Where the amount of security deposit is not sufficient to pay theamount fixed it shall be recovered from the assets of such multi

level marketing entity as if it is an arrear of land revenue due and

in case there is balance amount of the security deposited after

payment of the amount fixed under Sub Section (1) such amount

shall be repaid to the multi level marketing entity concerned.

19. Authorization to carry on activities after revocation :-

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The Controller may, in writing, authorize a Multi Level Marketing

entity whose licence has been revoked to carry on it activities for

such duration as the Controller may specify in the authorization, but

only for the purpose of winding up the affairs for the purpose which

are beneficial to its customers or other persons dealing with it.

20. Amendment or alteration of essential documents of licence

Every Multi level marketing entity shall, within three months after

making of any amendment or alteration to any of its essential

documents furnish to the Controller particulars in writing, duly

verified, by a statutory declaration made by a director of the Multi

Level Marketing entity, of such amendment or alteration.

21. Unlawful to promote or participate in pyramid selling scheme or

arrangement

(1) It shall be unlawful for any person to promote or participate in any

pyramid selling scheme or arrangement.

(2) Any person who contravenes subsection (1) shall be guilty of an offence

and shall be liable on conviction to a fine not exceeding Rs.. or

to imprisonment for a term not exceeding years or to both.

22. Registration of business which is designed to promote pyramid

selling scheme or arrangement prohibited

(1) No business which is designed to promote a pyramid selling scheme or

arrangement shall be registered under any law relating to the registration

of business.

(2) A person who in contravention of subsection (1) obtains registration of a

business which is designed to promote a pyramid selling scheme or

arrangement shall be guilty of an offence and shall be liable on conviction

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to a fine not exceeding Rs. or to imprisonment for a term not

exceeding .. years or to both.

23. Registration of company which proposes to promote pyramid sellingscheme or arrangement prohibited

(1) No company which proposes to promote a pyramid selling scheme for

arrangement shall be incorporated or registered under the companies Act

1956.

(2) Where a company which is designed to promote a pyramid selling

scheme or arrangement contravenes subsection (1) by obtaining

registration under the companies Act 1956, the company and every

officer thereof shall be guilty of an offence and shall be liable on

conviction to a fine not exceeding Rs. or to imprisonment for a term

not exceeding years or to both.

24. Penalty to be imposed in addition to other punishment

(1) Where a Court convicts any person of committing an offence of

promoting or participating in a pyramid selling scheme or arrangement

under section 21 then

(a) if the person has received any benefit, directly or indirectly as a result of

committing the offence, and

(b) if the benefit received by the person is a sum of money or if the value of

the benefit can be assessed, the court shall, in addition to imposing on

that person any other punishment order him to pay as a penalty, within

such time as may be specified in the order, a sum not exceeding the

amount of or, in the opinion of the Court, the value of the benefit received

by the person, and any such penalty shall be recoverable as a fine.

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(2) in determining the amount of penalty that a person, being a participant,

shall be required to pay under subsection (1), the court may take into

account any benefit that the person may have given for the right toparticipate the pyramid selling scheme for arrangement, as the case may

be, or any loss that the person may have incurred as a result of such

participant.

(3) Nothing in subsection (1) shall prejudice or affect any right which any

person may have under any written law or rule to recover damages from

the person referred to in subsection (1).

25. Certain Agreement void

Every agreement, verbal or written, expressed or implied, in which any of

the provision of this Act or regulations shall not apply or that any benefit

or remedy provided by those provisions shall not be available, or which

in any way limits or abrogates or in effect limits, modifies or abrogates

any such benefit or remedy, is null, void and of no effect.

26. Appeal

Any person aggrieved by an order of the Controller may appeal to

the Government within such time and with such fee and in the

manner as may be prescribed.

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CHAPTER IV

DOOR-TO DOOR SALES AND MAIL ORDER SALES

27. Calling at any premises for purpose of negotiating door to doorsales

(1) Any person who calls at any premises of negotiating door to door

sales shall immediately indicate the purpose of his visit before

entering the premises and shall leave the premises at the request of

the occupier of the premises or any person acting with the actual or

implied authority of the occupier.

(2). Any person who contravenses this section shall be guilty of an

offence.

28. Persons negotiating door to door sales to produce identification

card and authority card.

Any person negotiating a door to door sale shall produce to the

prospective purchaser-

(a) his direct seller card issued by the multi level marketing entity

and

(b) his identification card issues by Government authorities

29. Mail Order Sales

No person shall supply or advertise for the supply of, by mail order,

any goods or services except in accordance with this Act or the

Regulations.

30.Contents of advertisement in mail order sales

Any advertisement by any person for the supply of goods or services

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by mail order shall contain

(a) the name and licence number of such person

(b) the address of such person, which address shall not be a postal

box number

(c) the telephone number of such person

(d) a detailed description of the goods offered or service to be

provided.

(e) the places and times where a sample of goods may be inspected

(f) the prices of the goods or services.

(g) the cost of delivery, if any, and the manner of delivery, of the goods.

(h) the time when goods or services could be expected to be delivered

or performed

31. Signed Receipts information etc to the Customer

1) On receiving payment with respect to sale of goods or service, the

direct seller shall issue a signed receipts to the customer concerned

in accordance with the provisions of Indian Stamp Act 1999

( Central Act- 2 of 1989) in such form as may be prescribed which

shall contain the grounds for cancellation of the transactions and

such other terms and conditions in respect of the sale of goods or

service concerned.(2) A customer may rescind a direct sales contract at any time within

30 days from the date of direct sales contract by serving on the

direct seller a notice in such from as may be prescribed.

(3) Where a customer cannot return the goods to the direct seller in

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substantially the same condition as and when the customer received

the goods because of an act or fault for which the customer is

responsible, the customer may not cancel the contract.

(4) Every direct seller shall comply with provisions of Kerala Value

Added Tax, Act, 2003 ( Act 30 of 2004)

(5) The Direct Seller shall inform the customer the following

informations.

(a) name, address, register number and telephone number of the

direct seller and of multi level marketing entity concerned.

(b) a description of the goods or services to be supplied.

(c) the order date, the total amount to be paid by the consumer along

with the bill and receipt.

(d) time and place for inspection of the sample and delivery goods.

(e) a notice to the consumer of consumers right to cancel the order

and to receive a full refund of sum paid.

(f) details regarding the complaint redressal mechanism of multi

level marketing entity concerned.

(6) Direct Seller shall at all times carry photo identity proof issues

by the multi level marketing entity with photo identity card

issued by the Government authorities.

CHAPTER V

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ENFORCEMENT

32. Declaration of office

Every Officer appointed under this Act when acting against any person

under this Act or the Regulation shall forthwith declare his Office and

shall on demand, produce to the person against whom he is acting such

authority card as the Controller may direct to be carried by such

Officer.

33. Power to enter premises and to inspect and seize goods and

documents

(1) If a Magistrate of Judicial First Class of territorial jurisdiction is

satisfied on information given on oath that there is reasonable

ground to believe-

(a) that there are on any premises any document or goods the

inspection of which is likely to disclose evidence of thecommission of an offence under this Act, or

(b) that any offence under this Act has been, is being or is about

to be committed on any premises, he may issue a warrant,

which shall be in force for a period not exceeding one month,

under his hand authorizing any officer under this Act to enter

those premises, if necessary by force, and to search those

premises.

(2) Any officer who enters any premises under the authority of a

warrant issued under Subsection (1) may-

(a) require any person found on such premises to supply him with

any information or to produce any goods or any documents

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35. Investigation by Authority

(1) The Authority or any person authorized by him in writing may

investigate and enquire into any mater the investigation of which he

deems expedient for the administration of this Act.

(2) The person making an investigation may at all reasonable times

demand the production of and inspect all or any of the books,

documents, papers, correspondence and records of person in respect

of whom the investigation is being made and any person who has

custody, possession or control of such books, documents, papers,

correspondence or records shall provide them and permit the

inspection thereof by the person making the investigation.

(3) The investigation Officer shall furnish the reports of investigation to

the Authority within 15 days of investigation.

36. Conduct of Prosecution

Prosecution in respect of any offence under this Act or Regulations

may be conducted by any person appointed under this Act.

37. Forfeiture of goods

(1) All goods seized in exercise of any power conferred under this Act

shall be liable to forfeiture

(2) An order for the forfeiture or for the release of any goods seized inexercise of any power conferred under this Act shall be made by

the Court before which the prosecution with regard thereto has been

held the and an order for forfeiture of the goods shall be made if it

is proved to the satisfaction of the court that an offence under this

Act has been committed and that goods were the subject matter of

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or were used to the commission of the offence, not withstanding that

no person may have been convicted of such offence.

(3) All thing forfeited shall be delivered to the Controller and shall be

disposed in accordance with the directions of the Authority.

(4) Where any goods seized in exercise of the powers conferred by this

Act are of perishable nature or where the custody of such goods

includes unreasonable expenses and inconvenience, such goods may

be sold at anytime and the proceeds of the sale to be abide by the

result of the prosecution.

38. No costs or damages arising from seizure to be recoverable:-

No person shall, in any proceedings before any court in respect of

the seizure of any good seized in the exercise of any power

conferred under this Act, be entitled to the cost of such proceedings,

subject to section 37, to any damages or other relief unless such

seizure was made without reasonable or probable cause.

39. Cognizance of offences

(1) Notwithstanding anything contained in the Code of Criminal

Procedure, 1973 (Control Act 2 of 1974) a Court of Judicial First

Class Magistrate having jurisdiction over the area concerned shall

have jurisdiction to try all offences under this Act and to impose thefine provided for such offences.

(2) No Court shall take cognizance of any offence punishable under this

Act, except on a report in writing of facts constituting such offence,

made by the Controller of the Authority.

40. Regulations

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The Government may make regulations:

(a) prescribing requirements respecting applicants for permits.

(b) prescribing the terms, conditions and restrictions of permit.

(c) relating to the suspension or cancellation of permit.

(d) prescribing the form of contract by direct seller.

(e) exempting any class of transaction by direct seller from all or

any of the provisions of this Act.

(f) respecting the content of direct sales contract.

(g) respecting the form and content of a statement of cancellation

rights.

(h) respecting code of conduct of a direct seller.

(i) defining any word or expression used but not defined in this Act.

(j) prescribing any other matter or thing that is required or

authorized by this Act to be prescribed by regulation.

41. Miscellaneous

This Act shall not apply

(a) Where the customer or prospective customer is a body

corporate

(b) to any contract of insurance and reinsurance issued by an

insurer registered under the IRDA Act 2002.(c) to the subject of which is goods or services, the sale of which is

regulated by Government of Union or State.

42. C.P.C. Powers to controller

(1) In deciding all matters under this Act, the controller shall have

the power to regulate his own procedures and for this purpose of

making any enquiry or investigation under this Act, he shall have the

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same powers as are vested in a civil court under the Civil Procedure

Code, 1958 (Central Act 5 of 1958) while trying a suit in respect of

the following matters, namely -

-summoning and enforcing the attendance of any person and

examining him on oath

-discovery and production of any document or other material

object producible as evidence

-reception of evidence on affidavit.

(2) Any inquiry or investigation before the controller shall be deemed to

be a judicial proceeding within the meaning of section 193 and 228

of Indian Penal Code (Central Act 45 of 1960) and the controller

shall be deemed to be a civil court for the purpose of section 195 and

chapter XXIV of the Code of Criminal Procedure Code, 1973

(Central Act 2 of 1974)

43. Offences by companies

(1) Where any offence against any provision of this Act or the

Regulation has been committed by a company, any person who at

the time of the commission of the offence was a director, manager,

secretary or other similar officer of the company, shall be guilty of

that offence unless he proves that the offence was committedwithout his consent connivance and that he exercised all such

diligence to prevent the commission of the offence as he ought to

have exercised, having regard to the nature of his functions in that

capacity and to all the circumstances.

44. Relationship of Agency

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Without prejudice to the other provisions of this Act, the

relationship among the multilevel marketing entity, direct seller,

stockist and customer shall be that of among the principal, agent and

third parties respectively under the provisions of Indian Contract Act

1872 (Central Act IX of 1872) and their rights, duties and liabilities

shall be fixed accordingly.

45. Protection of Controller and other Officers.

No action or prosecution shall be brought, instituted or maintained inany court against the Controller or any other officer duly appointed

under this Act for or on account or in respect of any act ordered or

done for the purpose of carrying into effect this Act and the

Regulations and no suit or prosecution shall be lie in any court

against any other person for or on account or in respect of any act

done or purported to be done by him under the order, direction or

instruction of the Controller or any other officer appointed under this

Act if the act was done in good faith and in a reasonable belief that it

was necessary for the purpose intended to be served thereby.

46. Limitation

No prosecution for an offence under this Act or Regulation shall be

commenced after two year from the date of offence.

Penalties.

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Date post:	03-Apr-2018
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Mlm Draft Private Bill

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