The High Court of Delhi has intervened in a mounting financial conflict between Aakash Educational Services Limited and its former franchisee, Vaibhav Gupta, by appointing a Local Commissioner to secure critical evidence. Presiding over the matter on October 16, 2026, Justice Vinod Kumar authorized an immediate inspection and preservation of records at the coaching center located in Gangapur City, Rajasthan. The court’s move follows allegations that the franchisee, operating as M/s Shivrekkha Corporations, failed to remit over ₹2.13 crore in student fees and obstructed a prior internal audit attempted by the petitioner.

This judicial intervention serves as a protective measure ahead of formal arbitration proceedings, which are expected to address the termination of the franchise agreement and the substantial outstanding dues. The court identified the need for independent oversight after the petitioner provided evidence suggesting that key documentation, including student enrollment forms and financial ledgers, were at risk of being concealed or destroyed. By invoking its power under Section 9 of the Arbitration and Conciliation Act, 1996, the bench has ensured that material evidence relevant to the financial reconciliation of the center remains intact.

Fractured Franchise Relations and Audit Obstruction

The relationship between the education provider and its Rajasthan-based franchisee began in January 2025, when the parties entered into a formal agreement allowing the operator to utilize the brand name for coaching services. The contract stipulated that all student fees and security deposits collected by the franchisee were to be transferred to the petitioner’s bank account within 48 hours. However, by April 2026, the petitioner alleged that the respondent stopped complying with these deposit requirements and failed to provide transparency regarding the actual number of student enrollments.

The situation escalated in September 2026 when Aakash Educational Services Limited attempted to exercise its contractual right to conduct a physical audit of the premises. According to the petitioner, the arrival of the audit team led to an immediate confrontation. The company claimed that staff at the franchise center physically obstructed the team, forcibly removing registers and a laptop containing sensitive student data. While the respondent, Vaibhav Gupta, has disputed these allegations and raised counter-claims regarding system access, the lack of a verified account of the fees collected has created a significant financial impasse. The petitioner estimated total outstanding dues, factoring in advance payments and unremitted fees, to be approximately ₹2.3 crore.

Legal Authority and Judicial Reasoning

In justifying the appointment of a Local Commissioner, the court relied on the broad scope of the Arbitration and Conciliation Act. Justice Vinod Kumar emphasized that the court possesses the mandate to authorize such measures when they are necessary to prevent the loss of evidence that could affect the outcome of future arbitration. The court noted that the current dispute hinges on whether specific fees were collected and correctly reported, making physical documentation indispensable.

As the court observed in its order, "Section 9, thus, expressly permits the inspection of the property which is the subject matter of dispute for obtaining full information or evidence." The judicial focus remained squarely on the preservation of data and the maintenance of a fair evidentiary record for the sole arbitrator to review in the future. The bench acknowledged that the petitioner's concerns regarding the potential destruction of data were supported by the circumstances surrounding the aborted audit. As stated in the judgment, "In view of the nature of the records sought to be preserved, their relevance to the disputes between the parties and the circumstances pleaded by the Petitioner concerning the attempted audit, this Court is of the view that appointment of a Local Commissioner for the limited purpose of inspection and preservation of the relevant records is warranted."

Execution of the Commission and Future Proceedings

The court-appointed commissioner, Advocate Sidharth Kuhar, has been granted a comprehensive mandate to document the state of the franchise center. This includes creating a detailed inventory of all student records, cash diaries, fee receipt books, and digital data stored on laptops or internal servers. The commissioner is authorized to break open locks if access is denied and is specifically directed to seize and seal storage devices if the respondent fails to cooperate. Furthermore, the court has instructed the local police authorities in Sawai Madhopur to provide protection and support to ensure the commissioner can execute these tasks without further interference.

The commissioner is also required to record payment patterns by capturing QR codes, UPI IDs, and bank details linked to the center’s operations since April 2026. This technical investigation extends to the recovery of CCTV footage from September 13, 2026, onwards, which will be sealed and deposited with the Registrar General of the High Court. The order stipulates that the execution of this commission must occur within two weeks, with a full report to be submitted to the court and the petitioner's legal counsel shortly thereafter. While this order provides a mechanism for evidence gathering, it remains a procedural step; the court has clarified that this does not constitute a final determination on the merit of the claims regarding the disputed ₹2.13 crore. The parties are now awaiting the commencement of the arbitral proceedings, where the substantive legal and financial arguments will be fully adjudicated by a sole arbitrator in Delhi.