Delhi High Court Appoints Local Commissioner In Aakash's ₹2.13 Crore Student Fee Dispute

The Delhi High Court on 16 October appointed a Local Commissioner to inspect and preserve financial and electronic records at Aakash Educational Services Limited's former franchise centre in Gangapur City, Rajasthan.

Justice Vinod Kumar allowed Aakash's application under Section 9 of the Arbitration and Conciliation Act, 1996, following allegations that franchisee Vaibhav Gupta had failed to remit over Rs. 2.13 crore in student fees and obstructed Aakash's audit. The Bench held:

“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.”

The dispute arose from a franchise arrangement under which Aakash provides coaching services directly and through franchisees. On 24 January 2025, it entered into an agreement with Gupta to operate a coaching centre in Gangapur City, Rajasthan.

The agreement required Gupta to collect student fees and security deposits on Aakash's behalf and deposit them into its designated bank account within 48 hours. It also authorised Aakash to inspect and audit the centre's accounts and records.

Aakash alleged that Gupta stopped depositing student fees and sharing regular collection details from April 2026. It claimed that fees from more than 100 students remained unpaid. After adjusting service charges, its records showed total outstanding dues of Rs. 2,30,04,960, including student fees, an advance, invoices and tax deducted at source (TDS). A separate reconciliation put unpaid student fees at Rs. 2,13,77,967, subject to verification against Gupta's records.

On 10 August 2026, Aakash issued a show-cause notice. Gupta's reply dated 17 August raised concerns about access to Aakash's systems and asserted claims against the company.

During a visit on 29 September, Aakash's audit team allegedly faced obstruction. The company claimed that someone took away registers and diaries, removed a laptop containing student information, and denied the team access to records and students. Gupta disputed these allegations and questioned the manner in which the audit was conducted.

Gupta also denied liability for fees allegedly not collected, maintained that he had remitted the amounts he collected and attributed unauthorised receipts to an unknown person. Aakash issued another notice on 1 October, received Gupta's reply on 3 October and terminated the franchise agreement on 14 October.

Following the termination, Aakash approached the Court under Section 9(1)(ii)(c) and (e) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Local Commissioner to inspect the centre and preserve evidence before arbitration. The agreement provided for a sole arbitrator and proceedings in Delhi.

The Court observed that Section 9 permits inspection to obtain information or evidence relevant to a dispute. It found the student registers, receipts, bank records and electronic data relevant to the dispute. The alleged obstruction and removal of records further justified preserving the evidence.

It appointed Advocate Sidharth Kuhar as Local Commissioner to inspect the centre, inventory records dating from 1 April 2026, and copy relevant data from computers and storage devices. It also directed him to record payment details and preserve CCTV footage from 13 September 2026, with police assistance from Sawai Madhopur.

Further, the Bench directed the Local Commissioner to complete the inspection and preserve the relevant records within two weeks, and submit his report within the following two weeks. It clarified that the order only preserves evidence and does not determine whether Gupta owes Aakash the disputed student fees.

Accordingly, the High Court allowed the application and directed the preservation of relevant records ahead of arbitration.

Appearances for petitioner (Aakash Educational Services Limited): Advocates Ms. Manasi Chatpalliwar, Mr. Pranav Proothi and Ms. Nimisha.