Contract Service Must Count Towards Seniority and Promotion Post-Regularization: Himachal Pradesh HC

Himachal Pradesh High Court has reinforced the principle that contractual services rendered by employees recruited through proper channels must be counted for seniority and promotion once their services are regularized. In a massive blow to administrative attempts to limit service benefits, the Court quashed orders denying these benefits, ruling that successful contract service followed by regularization creates a crystallized right to seniority from the date of initial appointment.

A Division Bench comprising Justice Vivek Singh Thakur and Justice Ranjan Sharma adjudicated a bunch of petitions filed by Junior Office Assistants (JOAs) of the Himachal Pradesh State Electricity Board Limited (HPSEBL). The petitioners challenged the denial of their contract service period for seniority and eligibility for promotion to the post of Senior Assistant, further contesting the validity of the Himachal Pradesh Recruitment and Conditions of Service of Government Employees Act, 2024.

Key Takeaways

Retroactive Seniority Rights

Contractual service followed by uninterrupted regularization must be counted for seniority and consequential benefits if the initial recruitment followed statutory rules.

Statutory Invalidity

Any legislation or executive order aimed at stripping regularized employees of their prior service benefits is liable to be struck down as unconstitutional.

Dotted Line Contracts

Courts will look beyond 'one-way traffic' contracts signed by unemployed youth, ensuring that service conditions do not unfairly penalize employees at the time of regularization.

Precedential Consistency

Binding precedents from the Supreme Court and earlier High Court rulings on service counting must be strictly followed by state boards and departments.

Court Observations and Directions

The Court observed that the petitioners were recruited following the proper procedure prescribed under the Recruitment and Promotion (R&P) Rules framed under Constitution of India, 1950. The Bench emphasized that once the petitioners were regularized after successful completion of the contract period, they became entitled to have that period counted for all intents and purposes, including seniority and eligibility for promotion. The Court noted that the right to claim these benefits accrued upon regularization.

The Court, in its reasoning, observed: "The moment petitioners have been regularized after successful completion of contract service for requisite period without interruption, they have become entitled for the relief claimed. Before regularization, petitioners could not have claimed, as the right to claim accrued to them when they were regularized and thereafter on the date when they were and/or are going to complete seven years, including contract services..."

The Court has following directions:

"after their regularization, respondents are directed to count the contract service of the petitioners, for all service benefits, including seniority and consequential benefits thereof as well as annual increment if not already granted at the time of contract service. Respondents are also directed to consider the petitioners for promotion to the post of Senior Assistant, subject to eligibility and falling in zone of consideration after counting of their contract service for all intents and purposes, as directed supra against the vacancies available in the year 2024 and, so on every year thereafter, against the post(s) provided in R&P Rules in the quota of JOAs. Annual increment for the contract period, if not already granted under the contract, shall be on national basis for the purpose of calculating future salary at the time of regularization as well as determining the pensionary benefits. ... the arrears shall be paid to the petitioners on or before 31.12.2026, failing which respondents shall be liable to pay interest at the rate of 6% per annum from the date of accrual, till date of payment/disbursement of the arrears."

Ratio

Where an initial appointment is made by following the procedure laid down by the recruitment rules and the appointee continues in the post uninterruptedly until the regularization of service, the period of officiating or contractual service must be counted for seniority and eligibility for promotion. Any legislative act or executive policy that seeks to nullify these accrued service benefits is unconstitutional and illegal.

Background

The petitioners were appointed as Junior Office Assistants (IT) on a contract basis between 2017 and 2022. Their recruitment was conducted by the H.P. Staff Selection Commission in accordance with the R&P Rules. Following the completion of three years of contract service, they were regularized between 2020 and 2024. The dispute arose when the Board refused to count their contract service for the 7-year eligibility requirement for promotion to Senior Assistant, relying on the Himachal Pradesh Recruitment and Conditions of Service of Government Employees Act, 2024.

The Court relied heavily on the Supreme Court's decision in Direct Recruits Class II Engineering Officer’s Association vs. State of Maharashtra and others ( "(1990) 2 SCC 715": 1990 CaseBase(SC) 306) and the High Court's own ruling in Taj Mohammad and others vs. State of Himachal Pradesh and Others. It also noted that the Himachal Pradesh Recruitment and Conditions of Service of Government Employees Act, 2024 had already been quashed in Devinder Kumar & others vs State of H.P and others ( "CWP No. 3361 of 2025, judgment dated 25.04.2026": 2026 CaseBase(HP) 961), a decision upheld by the Supreme Court. Consequently, the High Court allowed the petitions, directing HPSEBL to grant all consequential benefits and consider the petitioners for promotion.

METADATA:
Case Details:
Case No.: CWP No. 13050 of 2025
Neutral Citation: 2026:HHC:37915
Case Title: Ashwani Kumar & Ors. Versus HPSEBL & Ors.
Appearances:
For the Petitioner(s): Mr. Devender K. Sharma and Mr. Pankaj Thakur, Advocates
For the Respondent(s): Mr. Anup Rattan, Advocate General with Mr. Ramakant Sharma, Additional Advocate General; Mr. Rajesh Kashyap, Mr. Rajinder Singh Thakur and Mr. Virbahadur Verma, Advocates

Source: 2026 CaseBase(HP) 7992