The Supreme Court of India has ordered the permanent closure of Chaitanya Public School & Junior College, Kolhapur, effective from May 1, 2026. The Bench comprising Justice Dipankar Datta and Justice Satish Chandra Sharma dismissed the Special Leave Petition filed by Chaitanya Bahuuddeshiya Shikshan Prasarak Mandal, observing that the petitioners had shown an “extreme lack of solicitude for the rule of law” and had aggravated previous contemptuous acts by disobeying court orders.
Background of the Case
The legal dispute originated from a financial default by the petitioners, who had obtained financial assistance from the secured creditor, Auxilo Finserve Pvt. Ltd. Following their failure to clear the debt, action was initiated under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act).
A notice under Section 13(2) was issued on September 13, 2021, demanding approximately Rs. 5.06 crore. Despite numerous undertakings given before the Debts Recovery Tribunal and the High Court of Bombay between 2023 and 2024, the petitioners failed to honor their repayment commitments. Furthermore, the High Court had directed the petitioners on November 29, 2024, to inform parents that academic activities would discontinue from the 2025-26 session—a direction that went uncomplied with.
Proceedings and Previous Indulgences
The matter reached the Supreme Court after the High Court of Bombay, on June 27, 2025, directed police assistance for the secured creditor to take possession of the school premises. The High Court had noted that groups of individuals had repeatedly trespassed onto the secured asset even after possession was handed over to the authorized officer.
The Supreme Court initially stayed the High Court’s order on July 4, 2025. In subsequent hearings on August 19 and September 23, 2025, the Court attempted to balance the interests of the secured creditor with the welfare of the students. It directed the appointment of an Administrator and required parents to be notified about enrolling their wards in five nearby schools.
Arguments and Complaints of Non-Cooperation
The secured creditor filed an application for directions (I.A. No. 67814 of 2026), alleging that the petitioners had prevented the Administrator from assuming charge and continued to admit students despite restraint orders.
Counsel appearing for the State of Maharashtra supported these claims, stating that the petitioners had not handed over relevant documents or records to the Administrator and were in “wilful and deliberate disobedience” of the Court’s orders.
Court’s Analysis and Observations
The Court noted that despite significant indulgence, the petitioners “have not mended their ways.” The Bench observed:
“The petitioners, not having permitted the Administrator to assume charge, seem to have shown extreme lack of solicitude for the rule of law and aggravated the contempt already committed by acting in wilful and deliberate disobedience of the orders passed by this Court from time to time.”
While the Court acknowledged that the petitioners were in contempt, it decided not to draw up formal contempt proceedings at this stage, focusing instead on the finality of the possession and the academic transition of the students.
Final Decision and Directions
The Supreme Court issued the following mandatory directions:
- Closure of School: The school is directed to close “once and for all times to come” from the forenoon of May 1, 2026.
- Transfer Certificates: The petitioners must issue transfer certificates to all students wishing to enroll in the five nearby schools or elsewhere.
- Police Assistance: The Superintendent of Police and the Station House Officer, Kolhapur, are directed to provide “adequate help, assistance, support and cooperation” to the secured creditor to obtain “peaceful and vacant possession” of the asset.
- Fresh Valuation and Auction: Once vacant possession is obtained, the secured creditor must obtain a fresh valuation report from a Government valuer to set the reserve price for a fresh auction sale.
- Costs: The petitioners are ordered to pay costs of Rs. 1 lakh to the secured creditor within one month.
The Court concluded with a stern warning, stating that any further hindrance created by the management would be at their own “risk and peril,” and results of further strict action “may not be too palatable for them.”
Case Details
Case Title: Chaitanya Bahuuddeshiya Shikshan Prasarak Mandal & Ors. v. Auxilo Finserve Pvt. Ltd. & Ors.
Case No.: Special Leave Petition (C) No. 19540 of 2025 (with I.A. No. 67814 of 2026)
Bench: Justice Dipankar Datta and Justice Satish Chandra Sharma
Date: April 22, 2026
