Harsh, I would strongly urge you to persuade your professors that the Vani project should be hosted on a community web site under GPL at the earliest possible instance.
I am sure IIT-B has excellent mirror and backup solutions to do away with the disk-failure excuse.
Also, are you willing to give the students grades for code that has been contributed by people other than the group that was assigned the task by their evaluator? AFAIK, most student projects are just that - during the period of assignment and execution, they are hacked on by the students themselves. They might choose to release it under xGPL and put it up on sf.net after that.
Don't make the task of student evaluation any more complex!! Its fairly complicated as it is.
-- cheers