Long-serving contractual compassionate appointees must continue until regular vacancies permit their regularization.

The five respondents were legal heirs of former Sports Authority of India (“SAI”) employees who had died in harness.

They were appointed as Multi-Tasking Staff (“MTS”) on compassionate grounds, though on a contractual basis, between 19 September 2003 and 26 May 2015.

Their contractual engagements were periodically extended and continued until 30 September 2021.

On 29 June 2021, SAI informed them that their contracts would not be extended further.

The respondents challenged the decision before the Central Administrative Tribunal (“Tribunal”) in OA 1717/2021, seeking quashing of the non-extension decision, regularisation, continuity of service, seniority and consequential benefits.

SAI contended that, following cadre restructuring, 389 MTS posts had been surrendered and the remaining 464 posts were occupied, leaving no scope for continuation or regularisation.

The Tribunal quashed the non-extension order and directed SAI to re-engage the respondents; it further directed that they be appointed against regular vacancies when available and continued contractually until then.

SAI challenged that order before the Delhi High Court.

1. Whether SAI could contend that the respondents’ appointments were not compassionate appointments when their appointment orders expressly described them as such?

2. Whether the respondents’ contractual engagements, continued through repeated extensions for periods ranging from approximately nine to eighteen years, entitled them to continued service and eventual regularisation despite SAI’s cadre restructuring and surrender of posts?

3. Whether the distinction between non-extension of a contract and termination excluded the application of principles governing arbitrary discontinuation of long-serving contractual employees?

The Court held that compassionate appointment is ordinarily in the nature of permanent appointment and cannot be treated merely as temporary or contractual, relying on U.P. State Road Transport Corporation v. Brijesh Kumar.

It applied the principles stated in Jaggo v. Union of India, Vinod Kumar v. Union of India, Shripal v. Nagar Nigam, Dharam Singh v. State of U.P., Bhola Nath v. State of Jharkhand and Pawan Kumar v. Union of India, namely that prolonged, continuous and blemish-free service in essential and perennial duties may justify regularisation; governmental authorities cannot use contractual labels, outsourcing, restructuring or Uma Devi mechanically to perpetuate precarious employment.

The Court recognised the distinction under State of Karnataka v. Uma Devi between “illegal” appointments, which cannot be regularised, and “irregular” appointments of qualified persons against sanctioned or necessary posts, which may warrant regularisation in appropriate circumstances.

It further applied the principle that non-extension of a contract, when it results in cessation of employment, is substantively equivalent to termination for assessing arbitrariness.

The Court rejected SAI’s attempt to dispute the compassionate character of the appointments because the appointment orders themselves expressly recorded that the respondents were appointed on compassionate grounds; any departure from the Department of Personnel and Training’s instructions was attributable to SAI and could not prejudice the respondents.

The Court also found that the Tribunal had not directed immediate regularisation but had adopted a restrained course by ordering re-engagement and regularisation when regular vacancies became available, thereby addressing SAI’s contention regarding the surrender of 389 posts.

Applying the Supreme Court’s recent authorities, the Court held that the respondents’ long and continuous service, repeated contractual extensions and performance of MTS duties justified protection against discontinuation.

The fact that their contracts were not formally “terminated” but merely not renewed was considered immaterial because non-extension necessarily brought their employment to an end.

Consequently, SAI’s reliance on cadre restructuring and the absence of present vacancies could not justify setting aside the Tribunal’s direction for continued engagement pending regular vacancies.

It upheld the respondents’ continued engagement and the direction that they be regularised against regular vacancies when such vacancies arose; until then, they were to continue on a contractual basis.

The Court held that the respondents’ appointment orders could not subsequently be recharacterised as non-compassionate appointments and that non-extension of their contracts could not evade the legal scrutiny applicable to termination of long-serving contractual employees.