An extant regularization policy binds corporations to consider eligible contractual employees after seven years’ service.

The petitioners were engaged by J&K Small Scale Industries Development Corporation Limited (SICOP) between 1998 and 2013 on temporary, ad hoc, contractual, consolidated or need-based arrangements against various posts.

They had continuously served the Corporation for approximately 13 to 28 years and were subsequently placed in regular pay bands while continuing to remain technically non-regular employees.

SICOP’s Board of Directors, in its 84th meeting dated 7 August 2014, resolved that employees who had completed seven years of service would be regularized according to merit, while the cases of employees with less than seven years’ service would be examined by a committee constituted by the Managing Director.

The petitioners alleged that several similarly situated employees, including some with shorter service, had been regularized, but their own cases were not considered.

The respondents contended that the petitioners’ engagements were temporary and unauthorized for regularization, that Government circulars had prohibited such appointments, that the J&K Civil Services (Special Provisions) Act, 2010 had not been adopted by SICOP, and that SICOP’s subsequent merger into J&K Industrial Development Corporation (J&KIDC) left no operative regularization policy.

1. Whether the SICOP Board of Directors’ resolution dated 7 August 2014 constituted a valid and continuing policy for regularization of temporary, ad hoc, contractual and consolidated employees

2. Whether the petitioners, having completed more than seven years of continuous service and having been engaged against posts required by the Corporation, were entitled to consideration for regularization under that policy

3. Whether denial of regularization to the petitioners, while similarly situated employees had been regularized, violated the principles of non-arbitrariness, legitimate expectation and equality under Article 14 of the Constitution

4. Whether the Government’s ban on temporary or contractual engagements and the merger of SICOP into J&KIDC defeated the petitioners’ claim for regularization

The Court held that SICOP, being a company incorporated under the Companies Act with an identity distinct from the Government, was governed by decisions adopted by its own Board of Directors; Government policies did not automatically apply to its employees.

The Board was competent to formulate a regularization policy, and its 7 August 2014 resolution remained operative unless revoked by the Corporation or its successor.

Under the doctrine of legitimate expectation, although such expectation is not independently enforceable, failure by a public authority to fairly consider it may render its action arbitrary under Article 14, as explained in Food Corporation of India v. Kamdhenu Cattle Feed Industries, (1993) 1 SCC 71.

The Court also relied on Secretary, State of Karnataka v. Uma Devi, (2006) 4 SCC 1, particularly the distinction between illegal and irregular appointments and the principle that duly qualified persons working for ten years or more against sanctioned posts may be considered for regularization as a one-time measure.

It further relied on Vinod Kumar v. Union of India, (2024) 9 SCC 324, and Jaggo v. Union of India, 2024 SCC OnLine SC 3826, for the proposition that procedural formalities and the temporary label attached to an appointment cannot perpetually defeat substantive claims arising from long, continuous service in essential functions.

The Court found that the petitioners had served SICOP continuously for 13 to 28 years, that their services had repeatedly been extended without court orders, and that they had been placed in regular pay scales.

The Board’s resolution expressly contemplated regularization of employees completing seven years of service, and the respondents failed to show that the resolution had been rescinded after SICOP’s merger into J&KIDC.

The Court further noted that the petitioners were working against vacancies created by retirements, that their services continued to be required, and that the Corporation had regularized at least nine similarly situated employees, including some before completion of seven years.

Since the respondents identified no material distinction between those employees and the petitioners, refusal even to consider the petitioners under the existing policy was held to be arbitrary, discriminatory and contrary to their legitimate expectation.

The Government’s general ban and the absence of a Government-wide policy were held irrelevant because SICOP had an independent service framework and its own operative Board resolution.

The respondents were directed to consider and regularize the petitioners on the posts they were holding, with effect from the date on which each petitioner completed seven years of ad hoc, consolidated, contractual or need-based service, along with consequential benefits including arrears of salary.

The exercise was required to be completed within three months from the date on which a copy of the judgment was served on the respondents.