Why can't the school think straight...

As per the law of land no child can be expelled from the school under any circumstances, except only if:
1. Failure to pay Fees
2. Disciplinary action for some grievous law-breaking event

Adhishree does not fall into any of these exceptions and hence her admission cannot be revoked/canceled.

Hence the education department is right in forcing the school to accept the child back and the only weapon the education department has is to blackmail the school with revoking it's NOC (No Objection Certificate).
NOC from education department is mandatory for a school to operate in any state in India.

So now the school is blackmailing the education department by getting appeal letters signed from every parent.

What does a poor parent do? sign the letter as they are scared and cannot stand-up against the epitome of education - THE GR8 SCHOOL

SOLUTION - Just accept the poor child back to school and fight the issue in a dignified manner in the Courts of India.

Letter from education dept. to school ordering to take back the child
or face stringent action (ie. Revoking of NOC)