Karnataka HC asks government to produce evidence to show Vihaan Direct Selling's involvement in financial fraud

A Karnataka High Court bench of Chief Justice Rituraj Awasthi and Justice Sachin Magdum today directed the Karnataka Government to produce documents that will prove that Vihaan Direct Selling Pvt Ltd.

A writ petition was by Vihaan Direct Selling Pvt Ltd seeking the court to quash the order of the Government attaching the assets and freezing the bank accounts of the entity under Karnataka Protection of Interest of Depositors in Financial Establishment (Amendment) Act, 2020.

Kamini Jaiswal, Advocate, appearing for Vihaan submitted that the company is engaged in multi level marketing and does not take deposits from public. She submitted that the act of the State freezing their bank accounts is illegal and is without any basis. It was further submitted that by freezing the assets and bank accounts the company is unable to operate.

The counsel for the State submitted that the State on its investigation concluded that Vihaan is collecting such deposits from the public and their accounts were frozen to protect the interest of thousands of investors.

The court on hearing the parties refused to stay the operation of the order freezing the bank account and assets but however directed the State to produce evidence that has been collected to show that Vihaan is collecting deposits and has been committing financial fraud.

The matter has now been adjourned to 20th January 2022 for further consideration.

It is to be noted that Vihaan Direct Selling Pvt Ltd Company is a sub-franchisee of QI Group in India, marketing under brand name of QNet, a Hong Kong based company.

Case title: Vihaan Direct Selling India (India) Pvt Ltd Vs State of Karnataka