These are both clearly very broad definitions. For example, if I say to you “I’ll give you 50 rupee if you pop down the corner and post this letter for me“. Quick and easy money! Is it a “scheme” though? What about if I add “and do this every time I have a letter to send” – that’s a “systematic plan of action”, a scheme, and under this law is a “money circulation scheme” and, if you consider it “quick and easy”, it’s illegal! Absolutely ridiculous. What’s even more ridiculous is that “quick and easy” is entirely subjective, nowhere defined in the act. In an early case, brought by Amway against the State of Andhra Pradesh a few years ago, the court was of the opinion that money a Diamond earned after many many years of effort building a business asset was “quick and easy money”.

By this definition virtually any income in India that is not straight trading of “rupees for hours” is illegal. Income from a business, Bollywood royalties, share market dividends, heck even inheritance! All illegal “money circulation schemes”! Ridiculous, I’m sure you’d agree. Do people actually bother to read these laws they write before they enact them? Sometimes I think it’s all just a plot … or should I say scheme … by lawyers to ensure they have a lot of profitable work! Hopefully not quickly or easily.

It’s possible that somewhere along the line there is some case law that has been created by Indian courts that refine this ridiculous “definition”. If there is, let me know!

The second part of the definition, as I’ve interpreted it above, is a bit more akin to normal illegal pyramid scheme definitions around the world. It’s illegal to receive money (or something of value) for promising to pay people for enrolling them in a “scheme” where you (and they) will earn money by enrolling others. A classic pyramid scam in other words.

But wait …. in India it’s not that simple. That’s not all the definition says. It says it’s illegal to collect money for promising to pay money not only for enrolling others, but also “on any event or contingency relative or applicable to the enrolment of members into the scheme”. What exactly does that mean? Well, “contingency” can be interpreted as any related future event, or it can be a future event dependent on the current event. Think about standard multi-level marketing – using the first defintion, a downline purchasing products might be considered a “contingency relative or applicable to the enrolment”, and (assuming you qualify) you might get paid for it. That could therefore be illegal. In the same Andhra Pradesh case I mentioned earlier, the Supreme Court suggested this may be their view. I’d argue that the second definition of “contingency” is what is meant, that an event dependent on enrolling is what is necessary to satisfy the definition. You don’t need to enroll anyone to earn money selling Amway products, and you don’t need to enroll to buy Amway products, so earning an income from sales of products is not contingent on enrolling people. It can happen with or without it.

Still, it’s pretty much at the whim of whatever judge(s) you may have, so it’s prudent of Amway to completely clear this second definition of “money circulation scheme” off the table. With the removal of registration fees, no money (or item of value) is received for promising to pay people for enrolling others  – or anything related. That issue is now gone.

I can’t imagine that anyone (apart from the diehard anti-Amway zealots) would pursue the ridiculously broad “quick and easy money” definition, so Amway India should now be free to continue with, as the US State Department recently described it –