State Must Regularize Long‑Serving Contractual Employees on Sanctioned Posts, Supreme Court Directs

A bench of Justice Vikram Nath and Justice Sandeep Mehta heard appeals by three long‑serving employees of the State of Jharkhand who challenged Division Bench judgments that had dismissed their writ petitions seeking regularization after more than a decade of contractual service as Junior Engineers (Agriculture). The appeals arose from concurrent High Court orders dated 17 September, 15 October and 2 December 2024 that upheld a Single Judge’s dismissal of the petitions.

The Court allowed the appeals, set aside the High Court judgments and directed the respondent‑State to forthwith regularize the services of the appellants against the sanctioned posts to which they were initially appointed, with entitlement to "all consequential service benefits accruing from the date of this judgment." The bench emphasized that the State, as a "model employer", bore a heightened obligation to act fairly and could not shelter arbitrary action behind contractual labels. The Court, in its reasoning, observed: "In the aforesaid backdrop, we are unable to persuade ourselves to accept the respondent‑State’s contention that the mere contractual nomenclature of the appellants’ engagement denudes them of constitutional protection. The State, having availed of the appellants’ services on sanctioned posts for over a decade pursuant to a due process of selection and having consistently acknowledged their satisfactory performance, cannot, in the absence of cogent reasons or a speaking order, abruptly discontinue such engagement by taking refuge behind formal contractual clauses. Such action is manifestly arbitrary, inconsistent with the obligation of the State to act as a model employer, and fails to withstand scrutiny under Article 14 of the Constitution." The Court added that "Contractual stipulations purporting to bar claims for regularization cannot override constitutional guarantees."

Background The appellants were appointed in December 2012 against 22 sanctioned posts of Junior Engineers (Agriculture) pursuant to an advertisement which described the appointments as temporary and contractual for one year, extendable subject to performance and expressly stating that the State would not be liable to regularize appointees. The employees received annual extensions over the years and performed duties akin to regular staff, including transfers and postings. In 2015 the Director of Soil Conservation forwarded their representations for consideration of regularization; extensions continued until a final extension issued for December 2022–February 2023 led the appellants to seek judicial relief when the State indicated no further renewals would be granted.

They petitioned the High Court for mandamus to regularize them on sanctioned posts and declared illegal an office order declining further extensions. The Single Judge dismissed the petitions, holding the engagements contractual and that no legal right to renewal or regularization had accrued. The Division Bench dismissed intra‑Court appeals, relying on the contractual terms and established precedent that temporary or contractual appointments ordinarily did not give rise to a claim for permanence.

Before the Supreme Court, appellants’ counsel argued that the appointments followed a due selection process, roster clearance and uninterrupted service for over a decade with satisfactory performance, creating legitimate expectation and invoking principles of equity, unfairness of unconscionable clauses and violation of Articles 14 and 16. Reliance was placed on precedents addressing unequal bargaining power and invalidation of unconscionable contracts. The State contended that the terms were consented to, periodic renewals did not convert the engagement into a right, and that courts could not re‑write contracts.

The Supreme Court reviewed jurisprudence including Uma Devi and later decisions limiting or distinguishing its application, Central Inland Water Transport Corpn. v. Brojo Nath Ganguly on unconscionability, and recent authorities on legitimate expectation. It held that where the State, after a lawful selection process, continued to employ persons on sanctioned posts for a long period without cogent reasons to discontinue, mere contractual nomenclature could not be used to deny constitutional protections. The Court found the decision to abruptly discontinue service without a speaking order to be arbitrary and violative of Article 14. It directed immediate regularization of the three appellants and awarded consequential service benefits; the High Court judgments were set aside and pending applications were disposed of.

Case Details: Case No.: 2026 INSC 99 (Civil Appeals arising out of SLP (C) Nos. 30762 of 2024, 28352 of 2024 and 3430 of 2025) Case Title: Bhola Nath v. The State of Jharkhand & Ors. Appearances: For the Petitioner(s): Shri K. Parameshwar, Senior Counsel For the Respondent(s): Learned counsel for the State and other respondents (names not specified in the reported extract)