MONEY CHAIN

Recently  I notiiced a private firm In Kottayam District- Kerala in the name of a health care services..  They have different types of health care schemes. Member ship scheme for single person is Rs 2000 which is non refudable. On investing such  an amount, we are elgible for several types of insurance coverages, (they claim so) . Also the insurance policy is guaranteed by India's very own companies like, National Insurance Company. Their way of income generation is given below.

1. Income eligibility is dependent on sponsoring  Life Care members.
2. Weekly generation of income for Memberships enrolled from Thursday to Wednesday.
3. First income is generated when pairs are formed in the ratio 2:1 or 1:2. Further income will be payable on all pairs formed in the ratio 1:1
4. Income distribution to those eligible is on the basis of Pairs formed during a week.
5. Pair Value : Rs.400.00
6. Income generated by a Member each week = Pair value × Number of pairs formed by the Member during the week.
7. Maximum income payable to a Member during a week is restricted to Rs. 20,000.00

RENEWAL INCOME

Renewal of Membership is effected each year by deducting an amount equal to the membership fee paid, from the income generated by the Member. This enables renewal of Insurance Policy of the Member as well as creation of Renewal Income in the subsequent year. Thus the member enjoys Double Income as follows :

RELIEF FUND - RULES AND REGULATIONS

1. Only Members of S-Team Life Care, up to the age of 55 years are eligible for benefits of Relief Fund.
2. An amount of Rs.10.00 each from the income generated by members will be deducted each week towards Relief Fund.
3. Only those who have contributed Rs.100.00 towards the Fund will be eligible for Relief benefits.
4. On natural death of the eligible S-TEAM life care member, his nominee will receive the relief fund benefits .
5. Death Relief - documental proof of death should be produced.
6. Education Aid – proof of studies from educational Institutions to be produced.
7. Marriage Aid – for one daughter, within the Policy period. Produce sufficient proof of marriage

Upon searching about the legality of the money chain from this forum itself I found the following.

The Supreme Court had examined this question in State of West Bengal Vs Swapan Kumar AIR 1982 SC 949. The Hon’ble Chief Justice Chandrachud, after taking note of legislative drafting, reshaped and rearranged the definition of `Money Circulation Scheme’, for the sake of clarity as:

“any scheme, (a) for the making of quick or easy money or (b) for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscripttions.” The court has clearly explained the ingredients, which need to be fulfilled for a scheme to become a money circulation scheme. Thus, any scheme for the making of quick or easy money contingent upon the enrolment of members into the scheme is a money circulation scheme. Similarly, any scheme in which money or any valuable thing is received and a promise is made to return the money on the event of enrolling members into the scheme is also a money circulation scheme.

So I would like to know, whether the above said Health services will come under any type of money chain or pyramid scheme.

Regards

Jayan