In a blow to the opponents of the cut in the admission fee of six Indian Institutes of Management, the Supreme Court on Friday endorsed the Centre's decision after it promised not to interfere in the running of these business schools of excellence.

A Bench comprising Chief Justice V N Khare, Justice S B Sinha and Justice S H Kapadia recorded the statement of Additional Solicitor General Mukul Rohtagi that the government would grant additional funds to make good the deficit arising from the reduction of the fee from Rs 150,000 to Rs 30,000.

• The IIM Controversy: Complete Coverage

Rohtagi said that reduction of the fee would not in any way lead to interference in the running of these institutions of excellence.

The Bench, in view of the undertaking given by the government, disposed of a public interest litigation filed by three members of IIM alumni challenging the February 5 decision of the HRD ministry headed by Murli Manohar Joshi.

Appearing for the petitioners, senior advocate Harish Salve said that the fee cut was not a major issue as long as the government did not intend to tinker with the management of these institutions of global repute.

A major controversy was erupted as the government's decision was severely criticised by leading lights from the corporate sector, including Infosys Chairman and Chief Mentor N R Narayana Murthy and Hindustan Lever Ltd Chairman M S Banga.

Narayana Murthy, who heads IIM-Ahmedabad, had said that the IIMs were keeping all its legal options open to challenge the fee-cut decision.

The petitioners were asked during the last hearing on February 16 to supply details of the accounts of the IIMs and also justify the high fees charged by the institutions.

When everyone was expecting that the case would be adjourned as the petitioners had sought time to comply with the earlier directions, the Additional Solicitor General sprang a surprise by promising that fee-cut would not amount to interference in the management of the B-schools.

In the last hearing, the Apex Court had said that these institutes of excellence should not be accessible only to the elite section of the society and sought to know the basis for the IIMs to charge an annual fee of Rs 150,000 per student.

The Bench had also questioned the locus standi of the petitioners. "Who are you, what is your locus standi?" it had asked, and said, "If the IIMs were satisfied with the decision of the government, who are you to challenge it."

The petitioners had contended that drastic reduction of fees would make these institutions completely dependent on the government for funds which could result in the interference of the government in their administration.

The Centre had said that it still gives Rs 12 crore (Rs 120 million) as annual subsidy to the society running the IIMs and subsidies the fee to the tune of Rs 250,000 per student at present.

The ministry had said the decision to drastically cut the fees were taken after considering a recent Supreme Court order and recommendations of the U R Rao Review Committee which went into the issue.