JUDGMENT

Ruma Pal, J.-Leave granted.

The first appellant is an Institute incorporated under a statute entitled the Post Graduate Institute of Medical Education and Research, Chandigarh Act 1966 (referred to as the 1966 Act ). The object for setting up the Institute is reflected in the name. The Institute has, broadly speaking, three Departments, namely, Education, Hospital and Engineering Departments. We are concerned with the Engineering Department. The Engineering Department deals primarily with maintenance works of the Institute and includes diverse activities from maintenance of mechanical equipment such as operation tables to collection and distribution of linen. According to the appellants, there are distinct sections dealing with the different kinds of activities, each section having its separate administrative hierarchy. The question to be decided in this appeal is whether in 1980 promotions within the Engineering Department were to be made section wise or cadre wise.

2. Section 31 of the 1966 Act empowers the Central Government, after consultation with the Institute, to make rules to carry out the purposes of the Act by notification in the Official Gazette. Some of the m