The state governments did have "an element of interest" in ensuring high standards in private, unaided educational institutions. "This does not mean that the extent of interference in the autonomy of such institutions is unlimited," a vacation Bench comprising Justices Markandey Katju and Deepak Verma observed.

After all, the private educational institutions had to raise funds from their own resources, the Bench pointed out and added that "in this situation, the court must use its creativity" to find a solution which would "satisfy" the colleges and the government, besides protecting the interest of the student community.

The Judges made the clarification in its order on a bunch of lawsuits by the association of medical and dental colleges in Madhya Pradesh. The Bench directed the state and the association to equally share the seats for the admission process for the 2009-10 academic year. However, the 15 per cent NRI quota would be filled by the institutions.

The Bench said the seven-Judge Constitution Bench in its verdict in the PA Inamdar and Others versus Maharashtra case had stated that the state could take over the admission process if such institutions failed to meet the "triple test" norm (transparency, fairness and non-exploitative). However, it was not clarified who would decide that there was a failure on the part of such institutions, Justices Katju and Verma said.

This issue "cannot be left to the unilateral decision of the state government" as this would amount to giving "totally unbridled power" to the state administration. The Bench had earlier observed it was "difficult for the court" to identify the body that would decide which professional colleges had failed to meet the triple test norm.