The court's decision emphasized the importance of adhering to substantive provisions of law and fundamental policy, setting aside the award that did not comply with these principles.

JAYANT NATH, J.

1. The above two petitions are filed under section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Arbitration Act') seeking to challenge the award dated 07.03.2017 passed by the learned arbitrator. OMP (COMM) 17/2017 is filed by M/s. Pret Study by Janak Fashion Pvt. Ltd. OMP (COMM) 271/2017 is filed by Ms. Namrata Goyal.

2. The case was originally filed by Mrs.Namrata Goyal (hereinafter referred to as 'the claimant') against M/s Pret Study By Janak Fashion Pvt. Ltd. (hereinafter referred to as 'the respondent'). The case of the claimant is that the respondent company deals in Mens Designers Wears business having its Registered Office at N-9, South Extension, Part-1 New Delhi and Corporate Office at A-17, Info City, Sector-34, Gurgaon. The claimant is having its shop at Sadar Bazar, Nabha District, Patiala and is dealing in the sale of garments. Both the parties were desirous of having an outlet for providing apparels of the respondent. The parties entered into a Franchise Agreement dated 05.03.2007 and the claimant become the franchisee of the respondent.

3. The Franchise Agreement dated 05.03.2007 had various terms including that the franchisor (the respondent) shall give 22% commission on MRP or subject to minimum guarantee of Rs. 65,000/- per month. The respondent was to pay 6% per annum interest on security of Rs. 5 lakhs.

4. It is the case of the claimant that as per the agreement the claimant developed the infrastructure as per specifications given by the respondent and their architect. The claimant states to have incurred a lot of expenses in development of infrastructure. A grand inauguration and opening of the outlet was arranged. Lot of money was spent on the Grand Inauguration. A lot of money was also spent on publicity, hoardings etc.

5. The plea of the claimant is that the respondent supplied only 800 garments till opening of the showroom against an assurance of 2000 garments. Even in the peak season of winter the respondent failed to supply necessary garments to the claimant. The claimant claims that there was a continuous problem in performance of the terms and conditions of the Franchise Agreement by the respondent.

6. The case of the respondent is that there was a serious breach of the terms of the contract by the claimant and hence the respondent vide letter dated 08.11.2007 terminated the Franchise Agreement in accordance with clause 15.1 of the Franchise Agreement. It is pleaded that the breach by the claimant included the fact that the showroom staff was not upto the mark, claimant had broken billing rules, the claimant failed to deposit sale receipts in the respondent's account. The sales figures of the claimant were extremely low indicating that the claimant was not interested in performing part of the bargain etc.

7. The claimant pleads that the respondent have illegally and malafidely cancelled the Franchise Agreement. On 14.02.2008 the claimant sent a demand/notice for release of Rs. 35,76,406/- to the respondent. A legal notice was sent on 20.09.2008. The claimant thereafter filed a winding up petition under sections 433, 434 and 439 of the Companies Act, 1956. During pendency of the said winding up petition, vide order dated 27.01.2011 the matter was with the consent of the parties referred to the Arbitrator Sh. Prem Kumar, (Retd. District & Sessions Judge).

8. Before the learned Arbitrator, the claimant raised a claim for Rs. 71,20,157/-

9. The respondent filed a counter claim for Rs. 22,12,190/-. It was stated that the material worth this amount was supplied to claimant which was not returned back to the respondent. It is pleaded that the said goods/stock are still lying with the claimant since 2009.

10. In support of her claim, the claimant examined three witnesses, namely, Balbir Singh CW-2, Rajeshewar Modi Accountant as CW-3 and Rajesh Go