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A- Applicant's company-NPCL appointed the respondent/complainant as the NPCL franchisee from 9th day of October, 2009 to run its services at Gwalior District. (Clause 1). However, term 'services' has not been defined. B- Franchisee appointment initially shall be for a period of five years i.e. from October, 9, 2009 to October, 9, 2014 and can be renewed after five years, if found functioning satisfactory, at the discretion of NPCL. (Clause 2) C- Non-refundable franchisee royalty for an amount of Rs.2,22,222/- plus service tax is paid by the franchisee by cross cheque. (Clause 5) D- NPCL shall be free to fix targets for the franchisee center. Present minimum annual target fixed for Gwalior is Rs.25,00,000/- and NPCL shall review center performance periodically based on their achievement of target. (Clause 6). However, nature of target is neither defined nor explained. E- Franchisee has to run its services as per contents and procedures lay down and as per requirements of NPCL time to time. Charges for each product will as decided by NPCL. (Clause 8). What is the nature of product or in what context the term is used is missing in agreement.

F- Franchisee has to deposit the charges/payment collected within 24 working hours in company's bank account opened, operated by company and have to intimate by authorized e-mail ID.

(Clause 9) (Emphasis supplied) G- Present rate of franchisee commission is 60% plus applicable service tax of the fee/service charges collected during the month subject minimum of Rs................. (Rupees................only) plus service tax per year payable to NPCL with in time limits to be mentioned beyond that 18% interest to be payable. (Clause 10) H- In case NPCL offers any product, NPCL will deduct 60% plus service tax of the product charges and balance will be paid to franchisee on receipt of payment from customer. (Clause 11) I- Product charge mean the entire amount received by the franchisee from customer. (Clause 12) (Emphasis supplied) J- If franchisee does not generate and/or do not remit to NPCL franchisee commission as indicated above for consecutive three months, NPCL has right to recover from security deposit. (Clause 14) K- Registration of customers shall be done in the NPCL application form for all customers on payment as prescribed from time to time. (Clause

21. On perusal of the aforesaid agreement and various clauses relevant portions whereof are mentioned hereinabove, it is found that they do not indicate nature of activity intended to be performed by the company through franchisee, for which non- refundable franchisee royalty with service tax has been charged, franchisee commission is offered and targets are fixed. There is no description as regards the nature of activity to justify alleged royalty styled as franchisee royalty. It is also provided for offering of any product by the NPCL, but what is the nature of product, that is not disclosed though it explains that the product charges means the entire amount received by the franchisee from customer. It is not disclosed as to what would be the nature of payment made by the customers to franchisee called as product charges in absence of any description of product, in case NPCL offers the product NPCL will deduct 60% with service tax to the product charges and balance will be paid to the franchisee on receipt of payment from the customers with the further provision that if franchisee does not generate and / or do not remit to NPCL franchisee commission for three months, the same shall be recovered from the security deposit. Therefore, the agreement allegedly executed between the applicant and respondent/complainant appears to be a camouflage exercise intended to solicit deposits in the name of franchisee royalty and security deposits with the promise to pay with interest. There is no explanation as to why customers are required to be registered and for what purpose. It is not deducible from the agreement, as to what is the nature of franchisee been given to the respondent/complainant for which royalty is charged.

23. In the teeth of the fact that the nature of activities claimed to be carried on by the NPCL is not clear from the terms of the agreement and the corresponding obligation of the franchisee as to what nature of activities are required to be carried on by the franchisee, no rules and regulations claimed to have been set up by NPCL from time to time as contemplated under clause 30 of the agreement is placed before this Court to understand the nature of the activities and regulations thereof, under such facts and circumstances, it is difficult to understand as to why there is a requirement to deposit security of Rs. One Lakh as provided for under clause 32. Class 11 of the agreement though shows that NPCL shall offer a product and NPCL will deduct 60% plus service tax of the product charges and balance will be paid to franchisee on receipt of payment from customer, but this prima facie appears to be a clause where-under the amount deposited by the investors is shown to be paid 40% of the total earning out of the said deposit and 60% shall be appropriated by the company. Therefore, upon perusal of different clauses of the agreement, it appears that the entire agreement is misleading in nature prepared only to cover the deposits received from the customers in the form of so-called franchisee royalty and security deposits with the promise of payment with interest.