The medal is sponsored by the trust and family members of Shelar Mama.
According to the circular, the varsity cited one of the criteria that the student should be "vegetarian and teetotaller".
However, the varsity has claimed that the circular is old and re-issued every year with no change in the content.
The circular said the gold medal is given to a student who has completed post graduation in science and non-science stream with merit on alternate years. This year, the gold medal is given for non-science stream.
The circular said that besides the "vegan and tee-totaller" criterion, the student should believe in Indian culture, tradition and practice all these values in his daily life and should be versatile in activities like dance, singing, eloquence and theatre.
"Student who practices yoga and pranayama and meditation will be given preference," reads the circular.
Arvind Shaligram, registrar of SPPU, said the content in the circular is old as the gold medal was constituted in the name of Shelar Mama in 2006.
"Since the gold medal is given every year, the circular is re-issued every year and the content of the circular remains same and only date changes.
"As far as setting up the terms and conditions in the circular, the varsity has nothing to do with this as the terms and conditions in the circular were not drafted by the university. All these terms and conditions were drafted and given to varsity by the trust of yog maharshi Shelarmama then, who then wanted to constitute the gold medal in the name of the Yog Maharshi," he clarified.
Meanwhile, the varsity late this evening said it will have discussions with the family members of Shelarmama over the criterion related to diet.
In a statement SPPU said that it does not differentiate students on the basis of the food habits.
Reacting to the development, Yuva Sena leader Aaditya Thackeray wondered if it was a varsity or a restaurant.
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"This diktat should be withdrawn. Focus on studies instead. Rather than bothering about who eats what, pay attention to how students will get jobs," Mr. Aaditya said.
"I agree that the criterion should specify that a student should not have any vices. But 'only vegetarian' criterion is incomprehensible. Are you running a university or have you opened a restaurant," he said.
"Give a gold medal to those who issued this diktat and dismiss them," he added.
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(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)