In a major relief to direct selling company QNET, which has been trying to defend its business model in Mumbai for the last three years, the High Court of Hyderabad has seen merit in granting a stay on all proceedings against the company in the state.
The decision comes at a time when the government has taken steps towards recognising and regularising the direct selling industry in the country.
Last month, the Ministry of Consumer Affairs had issued Direct Selling Guidelines 2016 for all companies operating in this space for many years in the country, without a clear legislation in place to protect the companies or the consumers.
The thriving direct selling industry in India is estimated to have generated approximately Rs.7200 crores in revenues in 2015.
The decision by Justice Sri Ramachandra Rao at the Hyderabad High Court grants welcome relief to the directors and shareholders of Vihaan Direct Selling Pvt Ltd, the sub-franchisee of direct selling company QNET in India.
The company and its officers have continued to cooperate with the authorities in all investigations since 2013 and have submitted more than 50,000 pages of documents to support its stand as a legitimate business.
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