Contractual employees have no right to regularization without a scheme or extension beyond fixed-term tenures.

The petitioners were appointed as Accountants by the Jharkhand State Mineral Development Corporation Limited (JSMDC) on an annual contractual basis between 2017 and 2019 following a formal recruitment process

Their services were extended periodically until 2025

On May 9, 2025, JSMDC issued Letter No. 582, directing an outsourced agency (M/s Evergreen Services) to provide candidates for the post of Accountant on a contractual basis

The petitioners challenged this letter, seeking to prevent their replacement by another set of contractual employees, and further prayed for regularization and enhanced dearness allowance (DA) based on government resolutions

Parallelly, a contempt petition was filed alleging non-compliance with an interim order dated June 25, 2025, which had directed that the petitioners not be disturbed

1. Whether the services of the petitioners can be regularized in the absence of a specific policy or scheme?

2. Whether one set of contractual employees can be replaced by another set of contractual employees or an outsourced agency?

3. Whether the petitioners are entitled to the benefits of enhanced dearness allowance under Finance Department Resolutions?

4. Whether the respondents committed contempt of court by removing the petitioners despite an interim stay?

The court relied on the landmark judgment in Secretary, State of Karnataka v. Umadevi (3), which stipulates that regularization requires a minimum of ten years of service and the existence of a valid scheme

It applied Yogesh Mahajan v. AIIMS, establishing that contractual employees have no vested right to seek extension or renewal

Institute of Management Development v. Pushpa Srivastava, which held that service rights terminate upon the expiry of the contractual period

Jharkhand Government Memo No. 4063 dated 18.05.2016, which limits the maximum tenure for contractual employees to five years

Regarding regularization, the court observed that the petitioners had only served for five to six years, failing the ten-year threshold set in Umadevi (3), and noted that JSMDC lacked a policy for regularization which the court cannot compel the executive to frame

On the issue of replacement, the court found that the petitioners' contracts had expired by efflux of time in 2025, terminating the employer-employee relationship

The court distinguished the present facts from the prohibited practice of replacing one set of contractual workers with another, noting that JSMDC was instead transitioning to an "outsourced agency" model, which is a valid policy decision

Furthermore, the court held that JSMDC was bound by Memo No. 4063, which prohibits contractual engagements beyond five years

Regarding the contempt plea, the court found that the petitioners were removed prior to the passing of the interim order on June 25, 2025; thus, there was no willful disobedience

The petitioners were granted liberty to apply to the outsourced agency for consideration based on their experience

On the issue of enhanced DA, the court directed the petitioners to submit a representation to the Managing Director, JSMDC, for a reasoned decision in light of Finance Department circulars

The contempt proceedings were dropped as the petitioners were displaced before the interim order was operative

All pending Interlocutory Applications were closed