It has to be auto-level from the get go. Doomed otherwise.

hmm.... if you do use a pc, you'll need a way to compensate for drift also... can't let it float around hitting people.

I talked to my H.O.D. about this topic and he suggested one way could be,
trying to make our own RC transmitter and somehow programming it to be able to transmit signal through keyboard input.
so is there any kit by which I can build my own transmitter? I searched online and found this
http://www.rcmodelreviews.com/diyrcproject.shtml

Is there anything like this available in India?

.

If you are well versed with arduino, you should be able to do this without making a separate transmitter and then trying to connect it to PC. Instead you should do the same thing with arduino+xbee or any other wireless module.
And as for control instead of using a keyboard why not a xbox or ps remote.
Couple of links that might be useful
http://aeroquad.com/showthread.php?3297-AeroQuad-controled-by-PC-via-XBEE
http://www.plastibots.com/index.php/2013/11/26/wifi-bot-control-android-app-wifibot/

Also found this interesting video