Contractual employees may be discontinued for unsatisfactory performance without departmental inquiry after adequate opportunity.

Respondent No. 1 was appointed as a contractual District Coordinator on 12 March 2007. His appointment was initially for one year, extendable for a further year subject to satisfactory performance.

His services were terminated on 21 January 2014 for unsatisfactory work and performance.

The record showed that notices and communications, including a show-cause notice dated 4 October 2012 and a communication dated 13 January 2014, had been issued to him.

The Single Judge set aside the termination, relying on an old allegation of indecent conduct and the absence of a departmental enquiry, and directed reinstatement with liberty to conduct an enquiry.

The Parishad appealed, contending that the engagement was contractual and that, under the 2018 Rules, the District Coordinator post was a cadre post subject to prescribed eligibility and recruitment requirements.

1. Whether the termination of the respondent’s contractual engagement for unsatisfactory performance required a departmental enquiry, where he had been given opportunities to explain the deficiencies.

2. Whether the respondent could claim reinstatement to a District Coordinator post governed by the 2018 Rules, despite his contractual engagement and lack of the prescribed eligibility.

The Court applied the principle that a purely contractual employee has no vested right to continue in service beyond the terms of the engagement, and that a contract of personal service is ordinarily not specifically enforceable; reinstatement is therefore not available as a matter of course.

Where termination is based on unsatisfactory performance under the contractual terms, is not founded on proved misconduct, and the employee has had an opportunity to respond, a regular departmental enquiry is not a prerequisite.

The Court relied on State of U.P. v. Neeraj Awasthi, State Bank of India v. S.N. Goyal, A.P. State Federation of Cooperative Spinning Mills Ltd. v. P.V. Swaminathan, and Maharashtra State Cooperative Housing Finance Corporation Ltd. v. Prabhakar Sitaram Bhandange for the principles governing contractual employment and enforceability of personal-service contracts.

It also applied the 2018 Rules, under which the District Coordinator post was governed by statutory recruitment procedures and eligibility requirements.

The Court found that the termination order rested on unsatisfactory performance, not on the older allegation of misconduct relied on by the Single Judge.

Because the respondent’s engagement was expressly conditional on satisfactory performance and he had received notices and opportunities to explain the identified deficiencies, the Court held that a departmental enquiry was not required before discontinuing the contractual engagement.

The respondent consequently had no right to reinstatement.

Further, reinstatement to the District Coordinator post would conflict with the 2018 Rules because the post was then governed by statutory eligibility and recruitment requirements that the respondent did not meet.

It held that the Single Judge had erred in treating the termination as punitive and in directing reinstatement, and that reinstatement was impermissible under both the contractual terms and the 2018 Rules.

The appeal was allowed, the order dated 19 March 2024 was set aside, and the respondent’s writ petition was dismissed.

No order as to costs was made.