Denial of substantive financial benefits of regularization while granting them to similarly situated employees constitutes hostile discrimination.

The applicant, engaged as a Daily Rated Worker in the Agriculture Department, sought regularization under the Jammu & Kashmir Daily Rated Workers/Work Charged Employees (Regularization) Rules, 1994 (SRO 64 of 1994).

Following a High Court direction in Vijay Kumar & Ors. v. State of J&K (SWP No. 1478/2004), the respondents issued Agriculture Order No. 60/E of 2017, regularizing the applicant as a Mali with notional effect from 01.01.1999.

The applicant challenged this order, contending that while he was granted only notional benefits, other similarly situated and junior employees (such as Sagar Singh) were granted substantive regularization with retrospective monetary arrears via Order No. 154/E of 2018.

The respondents admitted the applicant’s eligibility but claimed he was denied financial effect due to a lack of specific administrative instructions and the restrictive nature of Rule 2.37 of the Financial Code.

1. Whether the grant of only notional regularization to the applicant while extending substantive financial benefits to similarly situated peers constitutes hostile discrimination and a violation of Articles 14 and 16 of the Constitution.

2. Whether Rule 2.37 of the Financial Code can be invoked to deny retrospective financial benefits when the state has already waived such restrictions for other comparable employees.

The court primarily applied the Jammu & Kashmir Daily Rated Workers/Work Charged Employees (Regularization) Rules, 1994 (SRO 64 of 1994), which establishes the criteria for regularizing continuous service.

It further relied on the constitutional principles of equality and non-discrimination enshrined in Articles 14 and 16, which prohibit arbitrary classification among equals in public employment.

Additionally, the court scrutinized Rule 2.37 of the Financial Code, Volume I, which discourages retrospective financial sanctions, holding that such administrative rules cannot be applied selectively to sustain discrimination.

The Tribunal noted that the respondents explicitly recognized 01.01.1999 as the applicant's due date for regularization and certified his satisfactory service without unauthorized breaks.

The court rejected the respondents' argument that the denial of financial benefits was justified by a "want of instructions," ruling that internal administrative delays or file movements cannot defeat a vested claim flowing from admitted eligibility.

Regarding Rule 2.37 of the Financial Code, the Tribunal reasoned that since the respondents had already granted retrospective arrears to other employees (Sagar Singh and late Yash Paul) through Government Order No. 253-Agri of 2018, they had effectively created a precedent of parity that must be extended to the applicant.

The court emphasized that the applicant, a proactive litigant who had pursued his remedies through previous writ and contempt proceedings, could not be placed in a disadvantaged position compared to his peers due to the Department's indecision.

The court held that the applicant is entitled to substantive regularization as a Mali effective from 01.01.1999.

The respondents were directed to: (i) grant all consequential service benefits and pay fixations.

(ii) release monetary arrears from 01.01.1999, payable in five equal annual instalments.

(iii) revise retiral/pensionary benefits accordingly.

The directions must be implemented within three months.