ORDER

1. This petition has been filed by the State of Himachal Pradesh challenging the order of the Division Bench of the High Court of Himachal Pradesh in CWP No. 378 of 1994 whereby it allowed 34 students admitted to the respondent-Institute to continue their studies after regularisation of their admission. It was directed that the Board should conduct the examination and allow these 34 students to sit in the examination and declare the results and any student who fails to obtain the qualifying marks in the 1st and 2nd semesters would be subject to the Boards decision made in accordance with the rules permitting them to appear in those subjects. The learned counsel for the Institute invited our attention to the decision of the Constitution Bench in Unni Krishnan, J.P. v. State of A.P. [(1993) 1 SCC 645] Our attention was particularly drawn to the Scheme set out in para 210 of that judgment. Broadly speaking, according to the Scheme, students seeking admission are to be divided into two classes, namely, those to he admitted purely on merit basis and those to be admitted on payment basis. The merit was to be determined on marks obtained at the entrance test or examination. Fifty per cent students to be admitted to every professional college on free seats had to be determined in accordance with the merit in the entrance examination whereas the other fifty per cent payment seats had to be filled by students who are prepared to pay the fees but where the total number of such students exceeds the number of available seats, their admission had to be regulated on the basis of inter se merit to be determined on the same basis as in the former case. Clause (9) of para 210 then reads as under : (SCC pp. 760-61)

"(9) After making the allotments, the competent authority shall also prepare and publish a waiting list of the candidates along with the marks obtained by them in the relevant test/examination. The said list shall be followed for filling up any casual vacancies or drop-out vacancies arising after the admissions are finalised. These vacancies shall be filled until such date as may be prescribed by the competent authority. Any vacancies still remaining after such date can be filled by the management."

2. The contention of the learned counsel for the Institute is that according to this Scheme, if all the payment seats are not exhausted on the basis of the merit criteria either on account of paucity of students prepared to take admission on payment basis or on account of drop-outs after the cut-off date, the vacancy or vacancies, if any, had to be filled by the management. For filling these vacancies, the management had to determine its own criteria since none from amongst those who qualified at the entrance test was forthcoming to take the seat on payment basis. In such a situation, counsel contends, either the seats must remain vacant and be wasted or the management must be permitted to fill those seats on a reasonable criteria adopted by the management. To take the situation in the instant case, out of the 50 per cent payment seats in one particular year, we are told that only six students applied for those seats and their names were forwarded by the State Government for admission. No one from amongst the candidates, who had qualified at the entrance test, was forthcoming to take the remaining vacant seats on payment basis, presumably because they could not afford it. After the cut-off date, those seats remained vacant. The management contends that it was entitled to fill those seats under clause (9) of para 210 of Unni Krishnan case [(1993) 1 SCC 645] on the basis of a reasonable criteria of selection that may be adopted by the management. The management also did not mind any criteria being fixed in this behalf by any other authority like the Central Council or the State Government. What it is concerned with is that if the payment seats remain vacant in such large numbers, the Institute would not be able to meet the expenses for