Contractual Employee Not Appointed Against Regular Post Can't Seek Permanent Employment On Basis Of Mere Contract Extension: MP High Court

The Madhya Pradesh High Court recently said that a contractual employee cannot claim regularization and merely because he has continued beyond his period of employment would not entitle him to become a permanent employee. 

The observation was made by a division bench of Acting Chief Justice Sanjeev Sachdeva and Justice Vinay Saraf while allowing the State's appeal against an order of a single judge bench which had allowed a writ petition moved by certain data entry operators (DEOs) challenging an August 2018 order issued by the Commissioner, Planning, Economics and Statistics Department, Bhopal directing it to reinstate the operators. 

The division bench in its order said, "It is trite law that contractual employee cannot claim regularization or permanent status and his services are co-terminus with the period of contract. If it is contractual appointment, the appointment comes to an end with the term of contract and contractual employee cannot claim to be made permanent on the expiry of his contract/term of appointment. Merely because a contractual employee has continued beyond the term of his appointment, he would not be entitled to be absorbed in regular services or made permanent merely on the strength of such continuation. As the post of Data Entry Operator was created only for a period of two years and appointments were made only on the basis of contract, the intention of the State was very clear that State was not interested to create any permanent post of Data Entry Operator". 

The bench further said that single judge bench had "erroneously" held that the operators were removed from services "without affording any opportunity of hearing" while it was evident from the record, that the DEOs contract was continued till August 31, 2017 and thereafter the contract was not renewed and "no order of removal or termination was passed".

"The decision taken by the State Government for not continuing the contract of Data Entry Operators was wrongly considered by the learned writ court as order of termination and therefore, the order passed by the learned writ court cannot be sustained in law. Consequently, in the considered opinion of this Court, the impugned order passed by learned writ court in W.P. No. 21766/2018 on 02.02.2023 deserves to be set aside and is hereby set aside and the appeal preferred by the appellant/State is allowed. Writ Petition preferred by respondents/petitioners is dismissed," the bench added. 

Background

The dispute arose when the State Government, in an order dated August 9, 2018, decided not to extend the contract of 21 DEOs, including the respondents/petitioners. These operators were initially appointed in 2010 on a contractual basis for a fixed term of two years, which was extended periodically until 2017. However, on September 1, 2017, the contract was not renewed, and a subsequent order in August 2018 formalized their termination.

The respondent DEOs had challenged the termination seeking regularization of their services and their termination was against the principles of natural justice. The single bench ruled in their favour, quashing the termination order and directing their reinstatement.The single judge bench had also directed the State decide the question of their back-wages.

Contentions

The State of Madhya Pradesh, represented by Deputy Advocate General, appealed the single bench's decision. The State contended that the DEOs were contractual employees with no claim to regularization or continuation beyond their contract period. The State also argued that the single bench erroneously applied the Madhya Pradesh Contractual Appointment to Civil Post Rules, 2017, and misinterpreted the Supreme Court's judgment in the case of Ku. Shrilekha Vidyarthi vs. State of U.P 1991, which pertained to termination during the contract period.

He also relied on November 2017 order to bolster his submission that by the said order, all the departments of State were notified that the posts of Data Entry Operator were contractual and never sanctioned and were not part of the departmental setup of establishment. 

He contended that the DEOs were not appointed under the Rules of 2017, as their contract ended on August 31, 2017, prior to the rules' notification. Therefore, the learned writ court's reliance on these rules is misplaced. 

Meanwhile the respondent DEOs said that it was never argued before the Writ Court (single judge bench) that Rules of 2017 are not applicable to the present matter and the order dated November 27, 2017 was filed for the first time before this Court at appellate stage without obtaining any leave of the court, therefore, the same cannot be considered. 

It was argued that the respondents/petitioners were appointed against the sanctioned post after following the due process and the period of contract was continued time to time, therefore, the petitioners were entitled for seeking regularization in view of the decision of the Cabinet dated May 29, 2018 whereby the general decision was taken to give a chance of regular appointment to the contractual employees. It was submitted that without affording any opportunity of hearing to the petitioners, the services of the respondents could not be terminated and the order dated 09.08.2018 was passed in violation of principles of natural justice and so was rightly quashed by writ court.

Findings

The division bench said that it appeared that the DEOs were not appointed against "any regular vacant post and the posts were created for a period of two years only for the purpose of appointing Data Entry Operators".

This, the high court, said indicated that the initial appointments of the operators were on "temporary basis for a period of two years" and mere extension of the contract period did not change the conditions of employment.

The bench said that this was not a case where the DEOs were removed or terminated during the contract period and therefore, there was no need to hold any inquiry or proceedings for not continuing the services of petitioners. The court noted that the DEOs worked till August 9, 2018 "without any extension of contract".

"By order dated 09.08.2018, Government has taken conscious decision for not continuing contract of remaining 21 Data Entry Operators including petitioners. The petitioners were not removed therefore, there was no need to grant any opportunity of hearing to petitioners," the bench held. 

Case Title: State of Madhya Pradesh & Ors. Versus Rajeev Singh & Ors.

Citation: 2024 LiveLaw (MP) 205

Case No: WRIT APPEAL No. 607 of 2023

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