Legal Analysis: Chaitanya Bahuuddeshiya Shikshan Prasarak Mandal & Ors. vs. Auxilo Finservice Pvt. Ltd. & Ors

Citation: 2026 INSC 408
Court: Supreme Court of India
Bench: Justice J.K. Maheshwari and Justice K.V. Viswanathan (Division Bench)
Judgment Author: Per curiam (order)
Date of Decision: April 22, 2026
Nature of Judgment: Order disposing of an application for directions and special leave petition arising from SARFAESI proceedings.

Synopsis of the Judgment

The petitioners (school management) defaulted on a loan of approximately ₹5.06 crore. The secured creditor initiated action under Section 13 of the SARFAESI Act. Despite repeated undertakings and court orders, the petitioners failed to repay, resisted possession, and acted in contempt of court orders. The High Court directed police assistance for taking possession. The Supreme Court initially stayed that order but later, after noting repeated contemptuous conduct and the completion of the academic session, dismissed the special leave petition, ordered closure of the school with effect from 01.05.2026, directed issuance of transfer certificates to students, and allowed the secured creditor to take possession with police help. Costs of ₹1 lakh were imposed on the petitioners. Contempt proceedings were not drawn up but a stern warning was issued.

1. Basic Information of the Judgment

FieldDetailsCase TitleChaitanya Bahuuddeshiya Shikshan Prasarak Mandal & Ors. vs. Auxilo Finservice Pvt. Ltd. & Ors.I.A. No.67814 of 2026 in SLP(C) No. 19540 of 2025BenchJustice J.K. Maheshwari and Justice K.V. ViswanathanDate of DecisionApril 22, 2026Citation2026 INSC 408Nature of ProceedingsApplication for directions in pending special leave petition under Article 136

2. Legal Framework

Laws Involved:

• Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act): Section 13 (enforcement of security interest), Section 13(2) (demand notice).

• Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (DRT Act): Provisions for debt recovery.

• Code of Civil Procedure, 1908: Principles of contempt, interim orders.

• Constitution of India, 1950: Article 136 (special leave to appeal), Article 226 (writ jurisdiction).

Precedents Cited: None specifically cited; the judgment proceeds on th

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