RUMA PAL, J. - (1.)THE appellants in this appeal have sought to assert their status as employees of the State Government of Jammu and Kashmir with the same rights, privileges and benefits available to other State employees. THE High Court has denied the appellants' claims on the ground that they had voluntarily surrendered their status as Government Servants in 1963 under Article 207 of the Jammu and Kashmir Civil Service Regulations, 1956 (referred to hereafter as the regulations) and that in any event their claim was barred by delay and laches.
(2.)IT is not in dispute that each of the appellants had been appointed prior to 1963 as permanent Government servants under the Jammu and Kashmir Civil Services (Classification, Control and Appeal) Rules, 1956 (hereafter referred to as 'the Rules') and were serving in different capacities in industrial units which were being run by the Department of Commerce and Industries of the State Government.
In 1963, the State Government formed a Board of Directors for the administration of these industrial units by its order No. 189/C of 1963 dated 10/08/1963. The Board of Directors was constituted by - JUDGEMENT_178_SUPREME2_2002Html1.htm

The order also provided for the the re-designation of the officers Incharge of the industrial concerns as Managers in the respective concerns. All Managers were placed under the overall control of the Managing Director and the Board of Directors.

(3.)ON 3/10/1963, the Jammu and Kashmir Industries Ltd., the respondent No. 2 herein (hereinafter referred to as the company) was incorporated as a private limited company under the provisions of the Companies Act, 1977. The main object of the company as mentioned in Clause III (a) of its Memorandum of Association was :
"To run, manage, administer the State Industrial Undertakings as may be notified by the Governor in a manner as would ensue their economic working".

On 8/10/1963, the Governor issued instructions by which some industrial undertakings of the State Government including the the in which the appellants had been appointed were "notified to be entrusted to the company in pursuance of clause III (a) of the Memorandum of Association of the Company". The effect of this 'entrustment' of the Industrial undertakings to the Company will be discussed after completing the narration of facts. It only needs to be noted at this stage that even after this "entrustment" the appellants continued working in the industrial undertakings in which they were initially appointed and continued to enjoy the same benefits of service with regard to emoluments, leave and pension as other Government employees.