Option 1: Tubelight: Tubelight does not work on the principle of mutual induction. It operates using a different mechanism, where an electric current is passed through a gas-filled tube to produce light.

Option 2: Transformer: This is the correct answer. A transformer is a device that works on the principle of mutual induction. It has two coils, a primary coil and a secondary coil, which are wound around a common magnetic core. When an alternating current passes through the primary coil, it creates a changing magnetic field, which induces a voltage in the secondary coil. This phenomenon is known as mutual induction.

Option 3: Photodiode: Photodiodes are electronic devices that convert light into electrical current. They do not operate based on mutual induction. Instead, they utilize the principle of the photoelectric effect.

Option 4: LED: LEDs (light-emitting diodes) are semiconductor devices that emit light when an electric current is applied to them. They do not work on the principle of mutual induction. They operate based on the movement of electrons and holes in a semiconductor material.

In conclusion, the correct answer is option 2: Transformer, as it works on the principle of mutual induction.