Citizens' Issues
Alcohol laws in Maharashtra could drive you to drink

Muddled, disorganised and confused—that’s not your brain after you have had one too many; that’s the state of the law that regulates consumption of alcohol

Did you know why your favourite watering hole is called a ‘permit’ room? That’s because Maharashtra requires you to posses a liquor permit if you want to consume alcohol. What’s more, if you want to transport alcohol of any kind, you require a permit.

This 'requirement' is a classic case of a rule which is almost always breached, but has always existed in the statute books. The charade gets worse: The permissible drinking age is 25, according to the law, but various bars, pubs and ‘wine’ shops (as they are so called) have notices proclaiming that alcohol will not be sold to anyone below the age of 21.

The point is, why does the State have such an absurd policy like a 'permit' system under an archaic law like the Bombay Prohibition Act (1949)? According to this Act, purchasing and drinking alcohol without a permit is an 'offence.' The Act is clearly spelt out on a Maharashtra government official website:

Reports have been appearing in sections of the media that the permitted age for drinking will now be ‘increased’ to 25. But, according to the Act, this age stipulation already exists.

“There is no question of an amendment (to the law), because there is already an Act all along telling us that the age limit for drinking is 25 years,” said consumer activist and lawyer Jehangir Gai.

For the record, a liquor permit can be obtained for Rs25 (one year) and Rs75 (for three years). Permits can be obtained immediately on submission of application, says the government’s website. 

There are various penalties under the Act, which even include imprisonment up to five years or a fine which can go up to Rs50,000.

“The officials cannot enforce the law, and they are not really inclined to do so,” said a bar owner, who obviously preferred anonymity.

So why have such a rule in the first place? If the Act is not being enforced and is being flouted by all and sundry, isn’t it time the State repealed it?



Shadi Katyal

7 years ago

The permit is for foreign liquor as stated in the so called act. This act was created to collect revenue and some pocket money for babus. But this is nothing new in India.There were no alcohol days even in the capital but as a foreigner one could buy on any given day but the management refuse to serve an Indian guest, was a rule at one time.
So What is new ?

Murky cover: Chain-selling of insurance products thrives despite IRDA restrictions

In the absence of any clear-cut guidelines from the regulator or the government, insurance products are being sold under MLM schemes

Insurance products are being sold under multi-level marketing (MLM) schemes by constantly luring unaware clients. However, the regulator, the Insurance Regulatory and Development Authority (IRDA), is busy fighting a turf war with market regulator Securities and Exchange Board of India (SEBI), giving a free hand to these dubious, fly-by-night operators.

In the absence of any clear-cut guidelines from the insurance regulator or the government, MLM schemes are being used to peddle insurance. IRDA, the industry association and the government don’t seem to have the time to look into these murky chain-marketing schemes.

According to Section (42) of the Insurance Act, 1938, appointing sub-agents and passing on commission or kickbacks is prohibited. In an email to Moneylife, IRDA's executive director A Giridhar said, “Selling insurance through unlicensed persons is illegal and we will act on the information provided by you.” In addition, IRDA certification is mandatory for selling insurance products.

However, peddlers of MLM schemes in insurance products are coming up with new ways to cover up their shady activities. One such company is Team Life Care Co India Pvt Ltd, a corporate agent of Bajaj Allianz Life Insurance Company Ltd. (read more

Despite clear evidence of an MLM scheme being used to sell its products, Bajaj Allianz denies the very existence of such operations. Santosh Balan, head, corporate communications, said, “Bajaj Allianz General Insurance solicits business only through approved and specified persons. All our agents are strictly advised to follow all regulations and procedures while soliciting business. If we find anyone violating any norm or regulations, we will take strict action against them."

There are two different views on using MLM to sell insurance products. While the regulator clearly says that selling insurance through unlicensed persons is illegal, the Life Insurance Council is not sure about it. Earlier, SB Mathur, secretary general of the Life Insurance Council told Moneylife, ”There are a couple of insurance companies that have a multi-level set-up, who have licensed agents and who use authorised people to sell products and some of them are doing a good job. But IRDA is quite alive to this and has recently taken some steps to ensure that MLM is not misused.”

“If there is an MLM structure where the company has a number of authorised representatives to sell insurance to people who are buying policies, then an MLM scheme could give strength of distribution. If there are no licensed representatives selling insurance, then it (the company) should be denied the right to sell. It is as simple as that,” said Mr Mathur, who is former chairman of the Life Insurance Corporation of India (LIC).

Here is seems that Mr Mathur, a veteran in insurance, is just looking at the ‘sales’ side of these MLM schemes. From his statement it appears that he may not be aware about the fraudulent ways in which an MLM scheme works. All companies in the MLM field form a pyramid structure wherein the agent, business partner, distributor or salesman, whatever you call him, gets in new recruits, who in turn also recruits new people and it goes on to form a chain. Unfortunately, this chain structure is not a straight one. The new recruits are divided into binary or spill lines. Here the whole MLM edifice can come crumbling down.{break}

For example, if you join an MLM scheme, you are required to get two more people under you. Similarly, these two people also have to recruit two people each under them and after that your structure becomes complete and you are eligible to receive some income. However, in case one person from your team fails to recruit two people under his line then your structure remains incomplete and you may not receive a single penny as income. What is stunning is that depending on the MLM scheme, people who had joined under your line may be diverted to someone else’s line, if your line remains inactive or does not recruit more people. This is why so many people have lost or are losing huge amounts of money under MLM.

Moneylife has been writing on the rampant use of MLM for selling insurance products by insurers. Insurers like LIC, Bajaj Allianz, Reliance General Insurance or their agents are running MLM schemes for selling more policies. Nevertheless, nobody except Bajaj Allianz bothered to reply to our mails until writing this story.

In addition, insurance companies are also targeting independent financial advisors (IFAs) with lucrative offers for referring their high net-worth clients for various insurance products. A few IFAs have told Moneylife that they would rather stay away from such proposals, as they value a long-term client relationship more than the prospect of a quick buck.  

Earlier writing in, S Ananth, who has been studying chain schemes in Andhra Pradesh, in an article titled ‘Harmless fraud’ says, “A clear-cut case of violation of the laws relates to schemes that distribute insurance policies on behalf of various private insurance companies. Any person desirous of marketing insurance policies has to pass an exam conducted by IRDA. Only corporate agents or brokers (registered with IRDA) are allowed to pay commissions.

Companies actively involved in marketing insurance schemes include TLC Insurance (India) Pvt Ltd (TLC), RMP and Amway, among others. These details indicate the nature of harmless fraud and also the frequent testing of the frontiers of economic law by such companies in order to gauge the reaction of the agencies of the State. The lack of reaction by State institutions, or even tacit approval, is likely to gradually lead to calls to formalise these activities at a future date.”

IRDA, whose job is to regulate the insurance sector, is saying that it is looking into MLM schemes used by insurance companies to promote sales. However, in practice, the regulator is turning a blind eye on MLM operators and insurance companies. Similarly, the industry association is not sure whether to call MLM unauthorised or not. Nevertheless, the way both MLM companies and insurers are operating, there are good chances that MLM in insurance may be legalised.

About a dozen countries have banned any kind of MLM scheme. However, in a country like India, in the absence of any clear policy and regulation, companies that can fix the system by roping in influential officials thrive and grow till complaints start flowing in. However, this happens only when the MLM scheme is getting ready to collapse. Whether the rampant selling of insurance through MLM will be banned or legalised in India, only time will tell.



chandan kumar

6 years ago

so much happenings in the country, then why dont govt. make some regulatory to stop luring the innocent people


6 years ago


prakash anveri

7 years ago

i requested you sir please display our policy location and chain support stage

Tapas Chakraborty

7 years ago

The is a menace that has developed due to the apathy of the regulator to restrict such business structure and none punishment of the insurance companies for patronising such schemes. The MLM schemes are rampant in the small towns, semi-urban and rural areas

Cluster development sounds good on paper, but where is the space in Mumbai?

Does Mumbai have enough space to accommodate incentive FSI development granted by the government for cluster developments? The numbers just don’t add up

The government of Maharashtra has granted different percentages of incentive floor space index (FSI) for various ranges of amalgamated plots that will be used for cluster development. Cluster development allows redevelopment of old cessed buildings which have been constructed prior to 30 September 1969 and which have a built-up area of up to 2,000 sq mt. There’s an FSI of 4 for cluster development of amalgamated plots.

According to Section 37(2) of the Maharashtra Regional & Town Planning Act, 1966, these incentive FSI numbers will be granted for cluster development for the following size of amalgamated plots:

• Where the total area of amalgamated plot is between 4,000 sq mt-8,000 sq mt, the incentive FSI admissible will be 55%
• Where the total area of amalgamated plot is between 8,001 sq mt-12,000 sq mt, the incentive FSI admissible will be 65%
• Where the total area of amalgamated plot is between 12,001 sq mt-16,000 sq mt, the incentive FSI admissible will be 70%
• Where the total area of amalgamated plot is between 16,001 sq mt-20,000 sq mt, the incentive FSI admissible will be 55%
• Where the total area of amalgamated plot is more than 20,000 sq mt, the incentive FSI admissible will be 80%.

There are 16,000 cessed buildings in Mumbai and the government is targeting 20 years to complete the re-development of these structures. “You have to develop 800 buildings per year to meet the target. Each re-development takes at least three years-four years for completion. Around 2,500 buildings have to be re-developed at one time which will create chaos,” said Pranay Vakil, chairman, Knight Frank (India) Pvt Ltd.
Most of these cessed buildings which have been earmarked for re-development are located in the congested southern part of the city where there is hardly any place to park an automobile. The government has allowed incentive FSI in those areas which are already crowded—like Bhuleshwar and Kalbadevi in south Mumbai.


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