The defendants as well as unidentified persons are restrained at Bhagirath Palace, Chandni Chowk, Delhi under John Doe order and their vendors, sellers, agents, servants, representatives and employees or any one claiming under them, directly or indirectly, from in any manner selling/purchasing/distributing the Plaintiffs ‘Amway products’ unauthorizedly and illegally through any wholesale/retail shops till the next date of hearing.

HEAD NOTE

the defendants as well as unidentified persons are restrained at Bhagirath Palace, Chandni Chowk, Delhi under John Doe order and their vendors, sellers, agents, servants, representatives and employees or any one claiming under them, directly or indirectly, from in any manner selling/purchasing/distributing the Plaintiffs ‘Amway products’ unauthorizedly and illegally through any wholesale/retail shops till the next date of hearing.

 

IN THE HIGH COURT OF DELHI AT NEW DELHI

+CS(OS) 297/2018

AMWAY INDIA ENTERPRISES PVT. LTD.                       ….. Plaintiff

 

Through :   Mr.Sudhir Chandra Agarwala, Sr Advocate with Mr.Sohan Singh Rana, Ms.Priya Adlakha, and Ms.Tulip De,

 

 

Advocates.

 

versus

RAJENDRA MEDICOS & ORS.

 

Through :   None.

….. Defendants

 

 

CORAM:

HON’BLE MR. JUSTICE YOGESH KHANNA

O R D E R

%                                         01.06.2018

IA No.8110/2018

 

Exemption allowed, subject to all just exceptions.

 

The application stands disposed of.

 

CS(OS) 297/2018, IA No.8108/2018

 

In 1959 Amway Corporation (now known as Alticor, Inc.) headquartered in Ada, Michigan, USA was founded. In June, 1994 Amway Corporation sought approval of the Secretariat of Industrial Approvals (“SIA”), Department of Industrial Development, Ministry of Industry, Government of India, to set up a wholly owned subsidiary in India to replicate the Amway model. On August 26, 1994 the Government of India accorded its approval to Amway Corporation to start the business in India as a Direct Selling Entity as per its proposal. On August 03, 1995 the Plaintiff company was incorporated with the Registrar of Companies, Delhi. On August 04, 2004 the Department of Economic Affairs, Ministry of Finance, Government of India conveyed its approval to the Plaintiff for setting up their own manufacturing facilities for manufacture of products of personal care and cosmetic range subject to conditions contained therein. On October 26, 2016 the Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs) vide Notification G.S.R. 1013 (E) issued Model framework for Guidelines on Direct Selling regulating the business of Direct Selling and Multi-level Marketing. On December 08, 2016 the Plaintiff filed its undertaking to the Ministry of Consumer Affairs with the declaration that it is in 100% compliance with the Direct Selling Guidelines 2016, which was acknowledged by the Government of India. On November 08, 2017 the Plaintiff Company issued an internal circular for Amway Business Owners/Direct Sellers regarding sale of Amway products illegally and without authority. On November 09, 2017 Plaintiff published a caution notice in the Newspaper ‘The Times of India’ to protect its consumers. In May, 2018 Plaintiff Company got aware that ‘Amway Products’ are being sold by medical shops at Bhagirath Palace, Chandni Chowk, Delhi illegally and without authority or written permission of the Plaintiff.

 

On May 28, 2018 Investigation was carried out at Bhagirath Palace, Chandni Chowk, Delhi, when the investigating team found that many medical shops therein are keeping considerable stock of ‘Amway Products’, and are selling them illegally and without authorization after removing the unique codes placed on the lid of the products, and without issuing invoice and not providing benefit of Plaintiffs Return/Refund Policy.

 

The learned senior counsel for the plaintiff has also pressed

upon the contentions made in para No.27 of plaint, which notes:-

 

“27. John Doe Order

 

That the Plaintiff has made out a case for grant of John Doe order in the present case as it is not aware of the names and particulars of all the shops/ stores selling “Amway products” illegally and without authority in Bhagirath Palace, New Delhi, other than Defendant Nos. 1 and 2. The Indian Courts while passing John Doe orders have relied on cases/judgements passed by foreign courts where it has been inter alia held that in cases where plaintiffs show that they have a bona fide claim that unknown persons are violating their right, they have a right to have the identity revealed for the purpose of bringing action. It is submitted that in light of the above facts and circumstances, in absence of the requested John Doe order, the Defendants’ actions will cause harm that will potentially or actually result in financial or irreparable losses to the Plaintiff.”

 

The learned senior counsel for the plaintiff argued the plaintiff is a direct selling entity and per notification dated 26.10.2016 the direct selling entities were to submit an undertaking to the Department of Consumer Affairs by 09.12.2016 stating its compliance with the guidelines.

 

The plaintiff has given its compliance on 08.12.2016 in the following manner:-

 

“Reference: Undertaking by Direct Selling Entity as outlined in the Direct Selling Guidelines issued on September 9th, 2016.

 

Amway India Enterprises Pvt Ltd hereby submits this undertaking that we are 100% compliant / with all the requirements as outlined in the Guidelines issued on Sept 9th, 2016.

 

The details sought in the Guidelines are enclosed for your kind perusal and necessary action.

 

If so desired, we will be pleased to present to you and your team a step-by-step description of how this exercise has been carried out within Amway to align all internal as well as external stakeholders. We believe this would be no less than the Gold Standard for the industry and may be worthy of being a case-study.

 

We await to hear from the Ministry on the way forward.

Thanking you.

Yours sincerely,

 

 

For Amway India

 

Enterprises Pvt. Ltd.”

 

It is argued it is in violation of above statutory guidelines, the defendants are selling the products of the plaintiff by removing the unique code. The learned senior counsel for the plaintiff has taken me through the affidavits of the investigators wherein they have alleged to have gone to the shops of defendants No.1 & 2 and other shops in the vicinity and have been offered goods, but the defendants have failed to issue any receipt for the purchase and also have not explained as to how such goods have been received by them. The sale of goods of the plaintiff in the shops of the defendants is in violation of the notification as also of the compliances so made by the plaintiff and is injurious to the business of the plaintiff as would effect the direct sellers associated with the plaintiff.

 

The defendants are thus making profits out of the product of the plaintiff illegally and hence it is prayed the defendants be restrained from carrying out such illegal activities.

 

In the circumstances, summons of the suit and notice of the injunction application is issued to the defendants through all modes returnable before the learned Joint Registrar on 05.09.2018 and in the meanwhile, the defendants as well as unidentified persons are restrained at Bhagirath Palace, Chandni Chowk, Delhi under John Doe order and their vendors, sellers, agents, servants, representatives and employees or any one claiming under them, directly or indirectly, from in any manner selling/purchasing/distributing the Plaintiffs ‘Amway products’ unauthorizedly and illegally through any wholesale/retail shops till the next date of hearing.

 

Compliance of Order 39 Rule 3 of the CPC be made within ten days from today.

 

IA No. 8109/2018

 

This application is moved by the plaintiffs for the appointment of the four local commissioners; out of which one each shall visit the shops of the defendants No.1 & 2 and remaining two shall visit the area of Bhagirath Market area to find violators.

 

For the reasons stated above, this application is allowed and following learned Advocates are hereby appointed as the learned local commissioners:-

Sr. Name Place of visit
No.    
1 Ms.Sukhbeer Kour RAJENDRA MEDICOS,
  Bajwa, Advocate Shop No.1725-27,
  M.No. 9818040158 Ramgali,
    Bhagirath Palace, Delhi-06
2 Mr. Prateek Khanna HIMGIRI MEDICINES,
  Advocate Shop No. 1710, Ramgali,
  M.No.9971586998 Bhagirath Palace, Delhi-06
3 Sh. Rishabh Aggarwal Ashok Kumar/John Doe
  Advocate Order
  M.No.9810057173  
4 Ms.Kohika Gaur Ashok Kumar/John Doe
  Advocate Order
  M.No.9868913707  

 

 

The above local commissioners are directed to inspect and prepare an inventory of the Amway products and hand them over on superdari to the Defendants/Ashok Kumar/John Doe who are selling Amway products illegally. The local commissioners should also take photographs and video films of the Defendants’ premises/ unidentified shops and stores in Bhagirath Palace, Delhi where the

 

Amway products are stored, packaged or sold; sign the books of accounts and stock register maintained by the Defendants pertaining to sale of the Amway products. They are also authorised to break open the locks, if access to the aforesaid premises or any other premises under the control of the Defendants/ unidentified shops/ stores in Bhagirath Palace, Chandni Chowk, Delhi where the Amway products are lying / stored or being sold, is obstructed.

 

The fee of the learned Local Commissioner is fixed at `1.00 Lac each besides out of pocket and incidental expenses to be also borne by the plaintiff. The commission be executed within two weeks from today upon issuance of due notice to all the parties who are expected to extend all cooperation for execution of the commission. The report of the commissions shall be filed within two weeks after its execution. The SHO concerned shall ensure to provide the protection to the learned Local Commissioners in case of any need.

 

Copy of this order be given dasti under the signatures of the Court Master to the plaintiff. Registry to serve the copy of this order upon the learned Local Commissioners as well as the SHO concerned for compliance.

 

 

YOGESH KHANNA, J

JUNE 01, 2018

M

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