The court emphasized the need to interpret the entire contract and not enforce penalty clauses, while also considering the statutory duty to award reasonable compensation.

( 1 ) BY this petition under Section 9 of the Arbitration and conciliation Act, (for short the Act ) M/s. Geep Batteries (India) Pvt. Ltd. (hereinafter referred, as petitioner/buyer ) has prayed for an interim injunction restraining M/s. Gillette India Ltd. (hereinafter referred as respondent/ seller ), from disposing of or alienating or encumbering its Intellectual Property assets, covenanted to be transferred to the petitioners, in terms of agreement dated 28. 12. 2002.

( 2 ) FACTS essential for disposal of this petition are as follows -The respondent (seller) is engaged, inter alia in the business of manufacturing and distribution of blades, razors, toiletries, dry cell batteries, oral care products and small electrical appliances. In 1998 the respondent acquired Geep business, comprising geep brand name and Distribution Network from M/s. Shervani Industrial syndicate Ltd. (hereinafter "sisl" ). They also entered into a long term sourcing agreement with SISL, for supply of flashlights and some other special batteries. They have also been sourcing certain batteries from Gillette Diversified operation Pvt. Ltd. (hereinafter GDOPL ) at Mysore. The respondent agreed to sell above business, including the Intellectual Property Assets, Customer contracts, Marketing and Distribution Network and Access to Sourcing arrangements to the petitioner, as per terms and conditions contained in Asset purchase Agreement dated 28. 1. 2002 (herein "the agreement" ). This agreement sets out in detail, rights and liabilities of the parties under broad headings. Article 1 provides definitions and interpretation of the various terms used in the agreement. "intellectual Property Assets" is defined to include the Geep trade Marks, Geep Copyrights and Geep Designs. "inventory" is defined to mean, the inventory of the seller consisting of finished goods, work in progress, raw materials, packaging materials and goods in transit, but excluding finished goods work in progress and raw material of the seller at the transit SISL. Article 2 states that seller shall sell, transfer, convey, assign and deliver, as the case may be, to the buyer and the buyer shall purchase, acquire, accept, as the case may be, from the seller free from all encumbrances (except as expressly provided in the agreement or disclosed in the Disclosure Schedule), all rights, title and interest of the seller in Intellectual Property Assets (Clause 2. 1. 1), Distribution network (Clause 2. 1. 2), Access to Sourcing (Clause 2. 1. 3), and Current Assets (Clause 2. 1. 4 ). The seller also agreed to execute the related agreement, including deed of Assignment of the Geep Trademarks, Geep Copyrights and Geep designs subject to the payment of the amounts payable under the agreement. Article 3 contains the purchase price and the mode of payments - (a) Rs. 18. 0 crores (Rupees eighteen crores only) as consideration for sale, assignment, transfer and delivery of the "intellectual Property Assets" (Clause 3. 1. 1); (b) Rs. 4. 0 crores (Rupees four crores only), as consideration for sale of "distribution network" (Clause 3. 1. 2), (c) Rs. 8. 84 crores representing the value of the inventories prepared in accordance with Article 3. 2, payable in 12 monthly instalments (Clause 3. 1. 3); Rs. 9. 0 crores towards Current Assets other than the inventories determined, in accordance to Article 3. 3 which was payable within 15 days from the date of delivery of the Chartered Account s certificate. Article 4 deals with the employees; Articles 5, 6 and 8 deal with pre-closing, closing and post-closing obligations; Article 7 provides penalty for default. It states that in the event of the buyer failing to make payments due from it under the agreement on due dates and does not cure the breach within thirty (30) days of the notice having been served by the seller, the seller would be released from its further obligations to the buyer under the agreement, in particular, the obligation to transfe