Continuous contract service through prescribed recruitment rules counts after regularisation for seniority and consequential service benefits.

The petitioners were appointed as Junior Office Assistants (IT) in the Himachal Pradesh State Electricity Board Limited (“HPSEBL”) pursuant to open competitive selections conducted by the Himachal Pradesh Staff Selection Commission under the applicable Recruitment and Promotion Rules, although their initial appointments were contractual.

Their contractual service continued without interruption, and they were subsequently regularized after completion of three years, between 2020 and 2024.

The petitioners sought counting of their contractual service for all service benefits, including seniority, annual increments, and eligibility for promotion to Senior Assistant, for which seven years’ service as JOA was prescribed.

During the pendency of the matter, the State enacted the Himachal Pradesh Recruitment and Conditions of Service of Government Employees Act, 2024, which HPSEBL adopted through an office order dated 17 July 2025.

1. Whether the Himachal Pradesh Recruitment and Conditions of Service of Government Employees Act, 2024, and the consequential HPSEBL office order dated 17 July 2025, could validly be relied upon to reject the petitioners’ claims?

2. Whether contractual service rendered by the petitioners pursuant to selection through the prescribed recruitment procedure, followed by uninterrupted regularization, was liable to be counted for seniority and other service benefits?

3. Whether the petitioners were entitled to consideration for promotion to the post of Senior Assistant by counting their contractual service towards the prescribed seven years’ qualifying service?

The Court applied the applicable HPSEBL Recruitment and Promotion Rules, under which recruitment to Senior Assistant was by promotion, with separate quotas for Clerks and Junior Office Assistants.

It relied on the Constitution Bench decision in Direct Recruits Class II Engineering Officers’ Association v. State of Maharashtra, (1990) 2 SCC 715, particularly the rule that where an appointment is made in accordance with the prescribed procedure and the employee continues uninterruptedly until regularization, the period of prior service may be counted for seniority and related purposes.

The Court followed the Division Bench decision in Taj Mohammad v. State of Himachal Pradesh, CWP No. 2004 of 2017, which held that contract service obtained through the prescribed eligibility and recruitment process, followed by regularization without interruption, must be counted for seniority and consequential benefits.

It also treated the judgment in Devinder Kumar v. State of Himachal Pradesh, CWP No. 3361 of 2025, as conclusively invalidating the Employees Act, with all consequential actions based upon it rendered illegal and liable to be set aside.

The Court held that the petitioners had not entered service through an ad hoc or stop-gap arrangement. They had competed in an open selection conducted by the prescribed recruiting agency, satisfied the eligibility conditions under the applicable Recruitment and Promotion Rules, served continuously, and were ultimately regularized after successful completion of the contractual period.

Applying Direct Recruits and Taj Mohammad, the Court distinguished between the absence of an enforceable right during the contractual period and the right that accrued upon uninterrupted regularization.

Since none of the petitioners had been terminated and their contractual service culminated in regular appointment, the Board could not rely on the formal contractual stipulations or the annual-renewal structure to exclude that service for seniority and promotion purposes.

The Court further held that the separate promotional quotas for Clerks and JOAs meant that counting the petitioners’ service would not prejudice employees in the Clerks’ quota; the petitioners would compete only within the JOA quota, subject to vacancies and eligibility.

The rejection orders and consequential actions founded on the Employees Act, 2024, were quashed, and the respondents were prohibited from relying on that Act to defeat the petitioners’ claims.

HPSEBL was directed, after regularization, to count the petitioners’ uninterrupted contractual service for all service benefits, including seniority and consequential benefits, and to grant annual increments for the contractual period where not already granted, subject to the specified adjustment regarding increments already paid.

The respondents were further directed to consider the petitioners for promotion to Senior Assistant, subject to eligibility and placement within the zone of consideration, by counting their contractual service towards the qualifying period and against vacancies available from 2024 and in subsequent years within the JOA quota.

Arrears were directed to be paid by 31 December 2026; failing payment by that date, interest at 6% per annum would be payable from the date of accrual until disbursement.