Contractual employees are entitled to first preference and age relaxation in subsequent recruitment for revived project-based posts.

The applicants were appointed on a contract basis as Assistant Administrative Officer (2012) and Data Entry Operator (2017) at the National Collaborative Centre (NCC) for Facility Based Newborn Care (FBNC), Kalawati Saran Children’s Hospital.

Despite the initial contract for Meenakshi Bhatia ending in 2012, she continued in service for over 13 years.

On March 15, 2025, the respondents issued termination notices following a show-cause notice regarding irregular recruitment and salary issues.

The respondents contended that the project, initially funded by UNICEF, was officially closed via office order dated June 12, 2025, due to the cessation of external funding.

An interim order dated October 9, 2025, had allowed the applicants to continue and receive salaries pending disposal.

The applicants sought to quash the termination and requested regularization of service.

1. Whether the termination of long-term contractual employees due to the closure of a funded project is legally sustainable.

2. Whether the applicants are entitled to regularization of service based on their long-term uninterrupted tenure.

The Tribunal considered the principles of equity and reasonableness in public employment and scrutinized the respondents' plea of "financial constraints" against the standard of a model employer.

Referenced the Supreme Court’s decision in Dharam Singh Ors. v. State of UP and Anr. (2025), which held that State of Karnataka v. Umadevi cannot be used as a shield to justify "long-term ad hocism" or exploitative "temporary" labels for perennial work.

The court noted that while the creation of posts is an executive function, the refusal to sanction posts is subject to judicial scrutiny for arbitrariness.

While the respondents cited a lack of UNICEF funding and the official closure of the project, the applicants argued that the work was perennial and the closure was an internal decision of the hospital rather than a Ministry directive.

The Tribunal noted that the applicants had served for over a decade following a walk-in interview.

Acknowledging the respondents' stance that no sanctioned posts existed and the specific project had been terminated, the Tribunal sought a middle ground.

During oral arguments, the parties reached a consensus: the court would not quash the termination order but would protect the applicants' future employment prospects and ensure payment for services rendered.

Respondents must grant "first preference" to the applicants for any future contractual employment if the centre is revived or similar roles arise.

Age relaxation shall be granted for future recruitment equivalent to their years of contractual service.

Respondents must release all outstanding salaries within six weeks.

No order was made as to costs.