JUDGMENT (HARJIT SINGH BEDI,J.)

1. These appeals by special leave arise out of the following facts:

In the Undergraduate 4 years B. Tech. Cost-Sharing Engineering Course of eight semesters started in the year 1995 by the appellant university, 10% seats were reserved for Non- Resident Indian Students (hereinafter called "NRI students"). As per the prospectus such students were required to make a deposit of US $5000 at the time of their admission towards development charges and to pay in addition a fee of Rs.20,000/- per semester whereas all the other categories of students were required to pay a uniform fee of Rs.20,000/- per semester.

2. From the academic year 1996-97, however, the University increased the fee for NRI students to US $4000 per annum whereas the other students continued to pay fee at the rate of Rs.20,000 per semester. This practice was continued for three admission years, i.e. 1996-97, 1997-98 and 1998-99, but from the year 1999-2000 the provisions made in the year 1995- 96 i.e. confining the payment of fee to a one time payment US $5,000 and Rs.20,000/-per semester were restored. The respondents herein who had been admitted to the course in question during the years 1997-98 and 1998-99 filed representations claiming that they had been adversely treated by the appellant University and that they were entitled to claim parity vis-`-vis the fee structure for NRI students as from the years 1999-2000 onwards. As the representations bore no result, 34 of the 56 NRI students who had been admitted to the course during the two years, filed two writ petitions before the Kerala High Court.

3. On notice, a counter affidavit was filed by the Registrar on behalf of the appellant University pointing out that the NRI students had not been admitted to the course on the basis of merit and that the B. Tech. programme conducted at the Centre was a self-financing and unaided one being run exclusively with funds collected by way of fees. The fact as to the increase and the changes made from time to time in the fee structure were broadly admitted but it was pleaded that the Syndicate of the University had reduced the fee for the batch entering the course for the year 1999-2000 before the admission process had commenced and that the writ petitioners could not claim an automatic reduction in the fee and it was essential that the fee structure designed for a particular batch should be allowed to continue as to make a change midway would lead to a complete break down of the finances of the University.

4. The Division Bench of the High Court observed that two questions arose for consideration:

(1) Is the action of the University in charging fee at different rates from the students on the basis of the batches in which they were admitted arbitrary and unfair ? (2) Are the petitioners estopped from challenging the impugned action?

and then went on to examine each point under specific heads. While dealing with the question No.1, the Court observed that there appeared to be no rationale for subjecting the writ petitioners to a higher rate of fee than the rate fixed in the years 1995-96 and 1999-2000 onwards more particularly as in the written statement filed on behalf of the University no basis for a differential treatment had been disclosed and the averment that a reduction in the fee would lead to financial stress in the conduct of the courses had not been substantiated by facts and figures. The Court also observed that even assuming that the university had the right to fix the rate of fee, a duty was still cast on it to act fairly, and being a statutory body, its decision was to be based on reasonable facts and if a classification between the different categories of students was pleaded, it must satisfy the test of having a rational basis.

5. On question No.2, the Court