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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5094 OF 2019

(Arising out of SLP(C)No.13554/2019)

MAXIMUS ARC LIMITED

... APPELLANT(S)

VS.

M/S. SRI DEVI KARUMARIAMMAN EDUCATIONAL

TRUST & ANR.

... RESPONDENT(S)

O R D E R

1.

Leave granted.

2.

The 1st respondent, which is an educational trust

running a medical college and an engineering college, had

availed loans from the Central Bank of India and Bank of

India. It had mortgaged certain properties as security for

repayment of the loans received. As far as the Bank of

India is concerned, it assigned the debt owed to it to the

appellant herein. The appellant invoked the provisions of

Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002, and prayed that

since the Trust had failed to discharge its duties, it be

restrained from admitting students for the academic year

2019-2020, because that would affect the value of the

property and also delay the sale of the property. It was

Digitally signed by

SARITA PUROHIT

Date: 2019.06.20

13:16:52 IST

Reason:

Signature Not Verified

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also contended that the future of the students itself would

be in jeopardy if they are admitted and later on the

properties (colleges) were ordered to be sold.

3.

The Single Judge vide order dated 10.05.2019, passed

an order of interim injunction restraining the 1st

respondent from admitting students from the academic year

2019-2020 and also directed the University, i.e.,

Respondent No.2 herein, to initiate steps for

disaffiliation of the two colleges. Aggrieved by the said

order, the 1st respondent filed Letters Patent Appeal

(LPA), which has been allowed, the interim order has been

set aside and the matter has been remitted to the Single

Judge for deciding the writ petition on merits.

4.

True it is, that the ad-interim order was passed

without having the reply of the Trust on record but the

fact remains that the Trust has placed its view by filing

the LPA and all it wanted to say has been said in the LPA.

Be that as it may, we are clearly of the view that the

Division Bench erred in permitting the Trust to admit the

students to the colleges. We cannot lose sight of the fact

that if in the near future the colleges are ordered to be

sold, then the entire future of the students would be put

in jeopardy and they will have nowhere to go. These are

private colleges and obviously they may be charging high

fees from the students. There is no way that the amount

paid by the students/their parents could be refunded to

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them when the colleges are said to owe huge amounts to the

secured creditors. In this view of the matter, we are

clearly of the view that Respondent No.1-Trust should not

have been permitted to admit students for the academic year

2019-2020 till the final decision is taken by the Learned

Single Judge on the writ petition. However, as far as the

direction given to the University to initiate steps for

disaffiliation of the colleges concerned, that may await

the result of the writ petition.

5.

The appeal is allowed in the aforesaid terms.

Keeping in view the urgency of the matter, we request the

Learned Single Judge hearing the matter to dispose of the

matter as early as possible and not later than one month

from today.

6.

Pending application, if any, shall stand disposed of.

...........................J.

[DEEPAK GUPTA]

...........................J.

[SURYA KANT]

New Delhi;

18th June, 2019.

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ITEM NO.2 COURT NO.4 SECTION XII

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s).13554/2019

(Arising out of impugned final judgment and order dated 22-05-2019

in WA No.1737/2019 passed by the High Court Of Judicature At

Madras)

MAXIMUS ARC LIMITED