Chaitanya Bahuuddeshiya Shikshan Prasarak Mandal vs Auxilo Finserve Pvt. Ltd.

2026 INSC 408 NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

I.A. No. 67814 of 2026 IN SPECIAL LEAVE PETITION (C) No. 19540 OF 2025

CHAITANYA BAHUUDDESHIYA SHIKSHAN PRASARAK MANDAL & ORS. …PETITIONERS

VERSUS

AUXILO FINSERVE PVT. LTD. & ORS. …RESPONDENTS

ORDER

1. I.A. No.67814 of 2026 dated 26th February, 2026 is an application for

directions, filed by the respondents 1 and 21. It is listed for consideration

together with the special leave petition. Prayers made in the application

for directions read as follows:

a) issue necessary directions to the Superintendent of Police, District Signature Not Verified

Kolhapur to deploy sufficient police manpower in the School Digitally signed by JATINDER KAUR Date: 2026.04.22 17:48:56 IST Reason: 1 secured creditor premises, i.e. (CHAITANYA PUBLIC SCHOOL & JUNIOR COLLEGE)

enabling the Administrator to take over the administration of the

School effectively forthwith;

b) to direct closure of the School (CHAITANYA PUBLIC SCHOOL &

JUNIOR COLLEGE2) after the ensuing final examinations enabling

the Respondents to take possession and auction the premises.

c) Call upon the Education Officer (Secondary) to provide an action

taken report with regard to non-compliances by the Petitioners of

the directions issued by this Hon’ble Court and the communications

sent by the Administrator;

d) Pass any other order/orders as this Hon'ble Court may deem fit and

proper in the facts and circumstances of the present case.

2. The special leave petition is directed against a judgment and order dated

27th June, 20253 of the High Court of Bombay passed on an application

for intervention4 (filed by the petitioners before us) in a writ petition

under Article 226 of the Constitution5 of the secured creditor.

3. It is not in dispute that the petitioners had obtained financial assistance

from the secured creditor but had failed to clear their debt, resulting in

initiation of action under Section 13 of the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security Interest

Act6.

2 SCHOOL 3 impugned order 4 Interim Application No. 12978 of 2024 5 Writ Petition No. 10889 of 2024 6 SARFAESI Act

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4. A notice under Section 13(2) of the SARFAESI Act was issued on 13th

September 2021, demanding repayment of approximately Rs. 5.06

crore. This was followed by a series of unsuccessful promises,

submissions, and undertakings by the petitioners to repay the

outstanding dues: a promise to repay vide letter dated 15th February

2023; an undertaking dated 29th March 2023 before the Debts Recovery

Tribunal; a Memorandum of Understanding dated 8th October 2024 and

a submission before the High Court to place on record a payment

schedule (followed by a request for extension on 15th October 2024); and

a further undertaking before the High Court on 18th December 2024.

Additionally, by order dated 29th November 2024, the High Court directed

the petitioners to inform the parents of students studying in the SCHOOL

situated on the secured asset that academic activities would be

discontinued from the academic year 2025–26. This too was not complied

with.

5. After recording the aforesaid facts, the High Court proceeds to observe

in paragraphs 9 to 13 of the impugned order as follows:

“9. On 2nd May 2025, respondent Nos.1 and 2 handed over the possession of the secured asset to the authorised officer of the petitioners. A group of around 40 individuals trespassed the secured asset on 3rd May, 2025. The possession of the secured asset was once again handed over to the authorised officer of the petitioners pursuant to the order dated 15th May, 2025 passed by this Court. Again a group of around 40 individuals trespassed the secured asset. By order dated 19th June, 2025, only by way of indulgence at the request of learned counsel for the applicants/intervenors this Court granted time till 24th June, 2025, to rectify the situation and restore the possession of the secured asset to the petitioners.

10. Today, Mr. Vaidya, learned counsel for the intervenors/applicants once again made a request that some

3 time may be granted to them to deposit Rs.50 lakhs. We have already observed that the conduct of the applicants/borrowers has been far from satisfactory and by sheer use of strong arm tactics showing utter disregard to the rule of law. In such view of the matter, we direct the Senior Inspector of Police, Kurndwad Police Station, Kolhapur to depute necessary police force to assist respondent Nos.1 and 2 to take possession of the school on or before 3rd July, 2025.

11. Considering the manner in which the property is trespassed, we direct the In-charge of police station to depute two police constables at the site of the secured assets for which the charges will be paid by respondent Nos.1 and 2 for a period of two weeks from the date when the repossession is taken and handed over to the petitioners. It is open for the petitioners to post their security guards at the secured asset once the possession is taken. If any further attempt is made by the applicant or agent claiming through them to trespass the secured asset will be viewed seriously by this Court.

12. We hereby restrain the applicants/intervenors, their agents, or any persons acting on their behalf from entering the secured asset after it has been repossessed pursuant to this order.

13. The petition is disposed of in the aforesaid terms. The Interim application is rejected. Liberty to the applicants/intervenors to file appropriate proceedings for restoration of the possession, if not already filed, is kept open.

14. List the petition on 28th July 2025 under the caption ‘for compliance’.”

6. During the partial court working days of 2025, a coordinate Bench by its

order dated 4th July, 2025 while granting permission to the petitioners to

file the special leave petition issued notice, returnable in two weeks, and

stayed the operation of the impugned order in the meanwhile. The special

leave petition was thereafter, inter alia, heard on 19th August, 2025 and

23rd September, 2025, when appropriate workable arrangements were

ordered to be worked out entirely bearing in mind the interest of the

students who were enrolled during the current academic session in the

SCHOOL run by the petitioners. While the order dated 19th August, 2025

4 did record the failure of the petitioners to honour the commitments given

before the High Court, the order dated 23rd September, 2025 required

the District Education Officer, Kolhapur, Maharashtra to appoint an

Administrator to assume charge of the SCHOOL and to remain in charge

till such time the special writ petition is disposed of.

7. It is complained in the application for directions that despite this Court

having recorded in its previous order dated 19th August, 2025 that the

petitioners have taken the High Court as well as this Court for a ride,

they have not mended their ways. Reference is made to non-cooperation

on the part of the petitioners, which has prevented even the

Administrator from assuming charge.

8. Mr. Kilor, learned counsel appearing for the State of Maharashtra, does

not join issue with what the secured creditor complains about. According

to him, the petitioners have not made over to the Administrator, so

appointed, any of the relevant documents and records of the SCHOOL as

directed earlier. He also echoes that the petitioners have time and again

defaulted in honouring their assurances given to the Court and are,

hence, in contempt.

9. Although, it has been alleged by the secured creditor and the State that

the petitioners have admitted students in the SCHOOL despite an order of

restraint passed by this Court earlier, we do not consider it necessary to

examine such allegation in view of the order proposed to be passed

hereunder.

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10. We have read the previous orders dated 4th July, 2025, 19th August, 2025

and 23rd September, 2025. Petitioners having acted in breach of the order

dated 19th August, 2025, the order dated 23rd September, 2025 recorded

that they were in contempt. However, without drawing up proceedings

for contempt, workable arrangements were ordered to ensure that the

interest of the students studying in the SCHOOL is not hindered at least

during the current academic session. Direction was, however, issued to

notify the parents of all such students that they may take steps for

enrolment of their wards in the 5 (five) schools, which are in close

proximity to the SCHOOL run by the first petitioner, since the management

thereof were agreeable to admit such students.

11. We are informed that the final examination of all the students who were

pursuing studies in the SCHOOL during the last academic session has been

conducted; however, none of the students have been issued transfer

certificates. Mr. Kilor also informs us that by affixation of notice on the

notice board, the parents of the students were duly informed of the

imminent closure of the SCHOOL and the options open to them that they

could avail.

12. After 23rd September, 2025, there has been no effective hearing of the

special leave petition, and, in the meanwhile, 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. This

6 has necessitated firm steps to be taken against them, apart from the

aspect of contempt.

13. Since the final examinations have been conducted and the parents duly

informed, and enough indulgence has been shown to the petitioners, we

now direct closure of the SCHOOL with effect from the forenoon of 1st May,

2026, once and for all times to come. In the meanwhile, the petitioners

shall issue transfer certificates to all the students who wish to pursue

further studies by enrolling themselves in the 5 (five) nearby schools or

elsewhere.

14. Since the secured creditor has failed in its attempt to secure a purchaser

owing to alleged resistance offered / disturbances created by the

petitioners, we grant liberty to the secured creditor to approach the

Superintendent of Police, Kolhapur and the Station House Officer of the

jurisdictional Police Station for rendering adequate help, assistance,

support and cooperation to obtain peaceful and vacant possession of the

secured asset, i.e., building and its surroundings forming part of the

SCHOOL. Upon obtaining such possession, it shall be open to the secured

creditor to take further steps for disposal of the secured asset by auction

sale. The Superintendent of Police and the Station House Officer shall

take all such steps that are necessary for implementation of this order

and ensure that the petitioners do not interfere in any manner in course

of taking possession.

15. The secured creditor had obtained a valuation report of the secured

asset, earlier. However, that was at a time when the petitioners were in

7 possession thereof. In such view of the matter, we direct that after the

secured creditor is delivered vacant possession of the secured asset in

terms of this order, it shall be under an obligation to obtain a fresh

valuation report from a Government valuer and the reserve price to be

indicated for auction sale, when the secured asset is put up for sale once

again, shall be based on such valuation.

16. Since the SCHOOL does not receive government grants, the order

appointing the Administrator stands re-called. The administrative order

of appointment of the Administrator, in such peculiar circumstances as

noted above, may be withdrawn.

17. The special leave petition stands dismissed, with the aforesaid

observations/directions. The application for directions stands disposed of.

18. In view of the direction for closure of the SCHOOL and liberty granted to

the secured creditor, as above, we do not consider it necessary to draw

up proceedings for contempt against those in the management of the

SCHOOL at this stage. We express hope and trust that there shall be no

recurrence of any contumacious conduct on their part in future. However,

we make it abundantly clear that if there be any hindrance created by

them in course of compliance of this order, and it is brought to our notice

either by the State or the secured creditor, the same will be at their own

risk and peril. We do hereby warn them of strict action, the results

whereof may not be too palatable for them.

19. Petitioners shall bear the costs of this proceeding, quantified at Rs. 1

lakh, to be paid to the secured creditor within a month from date.

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20. Pending applications, if any, stand disposed of.

………..……………………………J. (DIPANKAR DATTA)

…….……..…………………………J. (SATISH CHANDRA SHARMA) NEW DELHI;

APRIL 22, 2026.

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