Judgment

BARGAVA, J. (On behalf of Subba Rao. CJI., Shelat and Mitter, JJ.): The appellant in this appeal is Electricity Board of Rajasthan, Jaipur (hereinafter referred to as "the Board"), a body corporate constituted on 1st July 1957, under the Electricity (Supply) Act, 1948 (No. 54 of 1948). Before the constitution of the Board, the supply of electricity in the State of Rajasthan was being controlled directly by a department of the State Government named as the Electrical and Mechanical Department. Respondent No. 1, Mohan Lal, as well as respondents 4 to 14 were all permanent employees of the State Government holding posts of Foremen in the Electrical and Mechanical Department. On the constitution of the Board, the services of most of the employees, including all these respondents, were provisionally placed at the disposal of the Board by a notification issued by the Government on 12th February 1958, purporting to exercise its powers under S. 78-A of Act 54 of 1948. In this notification a direction was included that the Board was to frame its own new grades and service conditions under its regulations, and the employees, whose services were transferred to the Board, were to exercise option either to accept these new grades and service conditions, or to continue in their existing grades and service conditions, except in regard to conduct and disciplinary rules, or to obtain relief from Government service by claiming pension or gratuity as might be admissible on abolition of posts under the Rajasthan Service Rules. The Board, however, did not frame any new grades and service conditions at least up to the time that the present litigation arose. Respondent No. 1 was, however, deputed by the State Government by its order, dated 27th January 1960, after having worked under the Board for a period of about two years to the Public Works Department of the Government. On 10th August 1960, an order was made by the Government addressed to the Secretary of the Board indicating that respondent No. 1 as well as respondents 4 to 14 were to be treated as on deputation to the Board. On 24th November 1962, the Public Works Department passed an order reverting respondent No. 1 to his parent department with effect from 1st December 1962, but the period of deputation was later extended till 25th July 1963. On 11th July 1963, he was actually reverted to the Board from the Public Works Department, and the Board issued orders posting respondent No. 1 as a Foreman. In the interval, while respondent No. 1 was working in the Public Works Department, respondents 4 to 14 had been promoted by the Board as Assistant Engineers. while respondent No. 1 was promoted to work as Assistant Engineer in the Public Works Department. On his reversion, respondent No. 1 claimed that he was also entitled to be promoted as Assistant Engineer under the Board, because some of the other respondents promoted were junior to him, and, in the alternative, that, in any case, he was entitled to be considered for promotion. This request made by him to the Board as well as to the State Government was turned down and, thereupon, respondent No. 1 filed a petition under Articles 226 and 227 of the Constitution in the High Court of Rajasthan. Respondent No. 1 claimed that he was entitled to equality of treatment with respondents 4 to 14, and inasmuch as he had not been considered for promotion with them by the Board, the Board had acted in violation of Arts. 14 and 16 of the Constitution. The Board contested the petition on two grounds. The first ground was that respondent No. 1 had never become a permanent servant of the Board and never held any substantive post under it, so that he could not claim to be considered for promotion with respondents 4 to 14. The second ground was that the Board could not he held to be "State" as defined in Art. 12 of the Constitution and, consequently, no direction could be issued to the Board by the High Court under Art. 226 or Art. 227 of the Constitutio