Aakash Educational Services runs its coaching centres across the country largely through franchisees who operate under its brand name while collecting fees and running classes out of their own premises. One such centre, in Gangapur City in Rajasthan, was run by Vaibhav Gupta under the trade name M/s Shivrekkha Corporations. The franchise agreement between the two gave Aakash a right to audit the franchisee's books and records, a fairly standard clause in this kind of arrangement, and one that usually sits unused until something goes wrong.
Something went wrong here. Aakash's case, as reported, is that from April 2026 the franchisee stopped depositing the fees collected from students into Aakash's account and instead issued receipts generated in Aakash's own name without routing that money through to the franchisor. When Aakash tried to exercise its audit right to check the extent of the shortfall, it says the franchisee obstructed the exercise. Aakash terminated the franchise agreement by a notice dated 14 October 2026.
A termination notice gets a franchisor out of the relationship but it does not, by itself, get the franchisor the evidence needed to prove what was owed. The franchise agreement provided for disputes to go to a sole arbitrator sitting in Delhi, so Aakash moved the Delhi High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection ahead of that arbitration. What it asked for was not money or an injunction but access: a Local Commissioner sent to the former centre in Gangapur City to inspect and take custody of student registers, fee receipts, bank records and electronic data before any of it could be altered, misplaced or destroyed.
Justice Vinod Kumar allowed the application on 16 October 2026, appointing a Local Commissioner to visit the premises and secure the financial and electronic records relevant to the dispute. The order does not decide how much the franchisee actually owes Aakash, or whether the Rs 2.13 crore figure Aakash puts on the shortfall will hold up. That question stays with the arbitrator. What the order does is make sure the arbitrator has something real to work with when that question comes up, rather than a franchisee's word against a franchisor's estimate.
Section 9 gets used for all kinds of interim relief, from freezing bank accounts to restraining a party from dealing with disputed property, and courts are generally careful before granting the more intrusive forms of it. A commission for inspection and preservation sits at the milder end of that scale precisely because it does not pick a winner. It does not freeze anyone's funds or stop anyone from trading. It simply walks into a dispute while the underlying facts, not just the legal arguments, are still capable of being recovered, and keeps them that way until an arbitrator is in a position to look at them.
That distinction matters more in franchise disputes than it might in a straightforward commercial contract. A coaching franchise runs almost entirely on the franchisee's own bookkeeping. The franchisor sees a monthly report the franchisee chooses to send up, not the underlying receipts, the bank statements, or the computer systems that generated them. Once a relationship turns adversarial, a franchisee with something to hide has every chance to clean up that trail before an arbitrator is even appointed, let alone before the first hearing. By the time a tribunal is constituted and gets around to ordering disclosure, the records the franchisor actually needs may no longer exist in a form anyone can rely on.
This is why a franchisor terminating an agreement over suspected diversion of funds gains very little by stopping at the termination notice. The notice ends the contract. It does nothing to preserve the evidence of what happened while the contract was still running, and litigation experience across franchise and distribution disputes bears out that delay between termination and an evidence-preservation application is exactly where records tend to disappear. Pairing a termination with a swift Section 9 application, aimed specifically at locking down documents and data rather than at the merits of who owes what, is what keeps the dispute capable of being decided on facts instead of competing affidavits.
For franchisors generally, the order is a template worth keeping in mind rather than a one-off curiosity. An audit clause in a franchise agreement is only as useful as the franchisor's ability to act on it quickly once a franchisee stops cooperating, and a court-appointed commission gives that audit right teeth that a letter demanding compliance never will. For franchisees, the lesson cuts the other way: obstructing an audit that the agreement itself entitles the franchisor to invites exactly this kind of court intervention, and a commission appointed on a franchisor's say-so at the interim stage, before the franchisee has even filed a reply, is not a comfortable position to argue from.