"The state spends large amount by way of aid, grant etc for running schools in the aided sector as well as the state-owned schools.
"Indiscriminate grant of recognition to schools in the unaided sector may have an adverse effect on the state-owned schools as well as the existing schools in the aided sector, by way of division fall, retrenchment of teachers etc.
A bench of justices K S Radhakrishnan and Dipak Misra gave the judgement while disposing of a Kerala government's appeal challenging the state high court's decision with a contrary view.
The case related to state government's refusal to recognise Betham English Medium School, established by an organisation, Tribal Mission in 2001 at Attappady in Palakkad District in unaided sector.
The state government had refused to grant recognition to it on the basis of one of its executive orders June 13, 2007 saying it would adversely affect the interests of the aided schools in the region.
A single-judge of the high court had dismissed the school's plea, but a division bench of the high court had, on an appeal from the organisation, directed the state to grant recognition to run classes from standard I to X from academic year 2010-11 onwards. The state government had come to the apex court against this order.