In a strict action, the Supreme Court has ordered the permanent closure of Chaitanya Public School and Junior College in Kolhapur, Maharashtra, from May 1, 2026. The decision came after the school management repeatedly blocked recovery proceedings under the SARFAESI Act for unpaid loans of more than ₹5 crore.

Court Criticism:

Justices Dipankar Datta and Satish Chandra Sharma strongly criticized the school’s management for continuously failing to repay the loan and ignoring court orders. The Court called their conduct an “extreme lack of solicitude for the rule of law.”

It also allowed the secured creditor to take help from the local police to take possession of the property, making it clear that no force or illegal obstruction can stop a lender from enforcing its legal rights.

How Dispute Started:

The issue began when the lender issued a demand notice under the SARFAESI Act for the outstanding dues. Even after possession proceedings were started, the school management kept delaying the process by filing cases in court and making promises to pay, which they did not fulfill.

The Court noted this repeated pattern of broken promises and said it weakened respect for judicial authority. It also criticized the management for creating disturbances to prevent the creditor from accessing the property.

Court Direction:

“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.”, the court said.

Final Order:

Since final exams are over, parents have been informed, and sufficient time had already been given, the Court ordered that the school must shut down permanently from the morning of May 1, 2026. It also warned the appellants not to interfere in the recovery process, or they would face consequences. The appeal was dismissed.

Case Details: CHAITANYA BAHUUDDESHIYA SHIKSHAN PRASARAK MANDAL & ORS. VERSUS AUXILO FINSERVE PVT. LTD. & ORS.