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The appellants have sought to justify a departure from the scheme set up in Unni Krishnan by pointing out that the scheme in Unni Krishnan is designed for private colleges. These two colleges, however, are not private educational institutions set up for the purpose of profit-making. The State has been compelled to go in for self-financing institutions in view of financial stringency. The appellants have also submitted that the State already runs (as of now) six Government and three aided Engineering Colleges which provide 2391 seats which are "free seats" available to all candidates on merit. The tution fees charged in these nine institutions is Rs. 495/- per annum. As against these 2391 seats available in nine colleges, two new colleges will provide an additional 480 seats on payment basis. Since the Government already runs or aids a number of institutions where all the seats are "free" seats, they should be permitted to start two colleges with "paid" seats. The ratio between "free" and "paid" seats is far more favourable to "free" seats than the 50:50 ratio laid down in Unni Krishnan. Hence it is urged that the appellants should be permitted to make a departure from the scheme in Unni Krishnan which requires a self-financing institution to provide 50% free seats and 50% seats on payment basis. It is also pointed out that while students occupying payments seats in Engineering Colleges are charged Rs.46,800/- as fees, at present, under the scheme as propounded here the fees per head come to only Rs. 12,500/-. The other plus point of the scheme as propounded is that the State, in discharge of its obligation to make special provisions for backward classes under Article 15(4) of the Constitution, has also provided for reservation of 10% of these seats in favour of Scheduled Caste and Scheduled Tribe candidates who will only pay half the prescribed fees and will not have to pay any deposit. This is done looking to their socio- economic backwardness. In the open merits seats also the reservation policy of the State in respect of such seats will operate. Such a provision does not find a place in the scheme under Unni Krishnan.

196. So far as unaided institutions are concerned, it is obvious that they cannot be compelled to charge the same fee as is charged in Governmental institutions. If they do so voluntarily, it is perfectly welcome but they cannot be compelled to do so, for the simple reason that they have to meet the cost of imparting education from their own resources - and the main source, apart from donations/charities, if any, can only be the fees collected from the students. It is here that the concepts of 'self-financing educational institutions' and 'cost-based educational institutions' come in. This situation presents several difficult problems. How does one determine the 'cost of education' and how and by whom can it be regulated ? The cost of education may vary, even within the same faculty, from institution to institution. The facilities provided, equipment, infrastructure, standard and quality of education obtaining may vary from institution to institution. The court cannot certainly do this. It must be done by Government or University or such other authority as may be designated in that behalf............. The entire scheme in Unni Krishnan is designed for private educational institutions. The contention of the respondent that the two colleges in question should also be considered as private Engineering Colleges because they are run by two societies registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act, 1955, cannot be accepted in view of the Government Order dated 8.6.1994. The material which is produced before us clearly shows that these two societies are fully controlled by the State of Kerala. The fees which have been fixed in the present case are also fixed by the State Government which has given budget details relating to these two colleges. The appellants have sought exemption from providing 50% free seats in the light of the fact that the State already runs or aids nine Engineering Colleges which are financed by it and which provide 2391 free seats. What is more important, it is pointed out that if the financing of the colleges is spread over all the available seats, the fees required to be charged would be much lower than if the expenses have to be covered by the fees from only 50% of the seats. In consequence, the fees charges are substantially lower than fees charged for payments seats in other Engineering Colleges -- thus benefiting a large number of students who may not be in a position to pay the higher fees charged by private engineering colleges, but may be in a position to pay the substantially lower fees charged in these two colleges.