Long-serving contractual employees appointed through due process against sanctioned posts must be regularised.

The 27 petitioners were appointed as Lab Technician Grade-III personnel pursuant to G.O.Ms.No.103, Health and Family Welfare Department, dated 15 April 2010, for Urban Primary Health Centres. Their appointments were made through the Employment Exchange, after interview and adherence to communal reservation, and they were paid a consolidated salary of ₹8,700 per month.

Under G.O.Ms.No.130 dated 12 April 2012, the Urban Health Centres were transferred to the administrative control of the Director of Public Health and Preventive Medicine on an “as is where is” basis, and the petitioners continued in service on consolidated pay.

The petitioners claimed that they had served continuously for more than ten years in sanctioned posts and that subsequently appointed persons had been regularised.

The Government rejected their request for regularisation by letter dated 31 January 2022, stating that regularising contractual personnel would create administrative and financial difficulties and would require relaxation of the applicable service rules.

Whether the petitioners, appointed on consolidated pay through the Employment Exchange after interview and observance of reservation procedures, could be denied regularisation merely because their appointments were described as contractual and were not made through the Medical Services Recruitment Board?

Whether the Government’s rejection of regularisation on the grounds of contractual status, financial burden and the existence of numerous other consolidated-pay posts was arbitrary and inconsistent with Article 14 of the Constitution?

Whether the petitioners were entitled to regularisation with time-scale benefits on completion of two years of service, on parity with similarly placed employees?

The Court considered Article 14 of the Constitution and the principle that the State must act as a fair and model employer.

It applied the rule in State of Karnataka v. Umadevi (3), (2006) 4 SCC 1, that temporary, casual or contractual employees appointed without a proper selection process cannot ordinarily claim regularisation.

However, the Court relied on Bhola Nath v. State of Jharkhand, 2026 INSC 99, for the qualification that prolonged contractual engagement on sanctioned posts following a lawful selection process may attract constitutional scrutiny and cannot be rejected mechanically on the basis of contractual nomenclature.

The Court also relied on the principles that the State cannot exploit employees through indefinite ad hocism, that contractual terms cannot waive constitutional protections, and that unconscionable employment conditions imposed by the State may be invalidated where employees lack meaningful bargaining power.

Government Orders Nos.103 dated 15 April 2010 and 130 dated 12 April 2012, together with the prescribed procedure of recruitment through the Employment Exchange, interview and communal reservation, formed the factual and administrative framework for determining the legality of the petitioners’ appointments.

The Court found that the petitioners were appointed against sanctioned Lab Technician posts and that their selection was not a back-door entry: candidates were obtained through the Employment Exchange, interviewed, and selected in accordance with reservation requirements.

Although they were not recruited through the Medical Services Recruitment Board, the Court held that the relevant appointment procedure applicable at the time had been substantially followed.

Their continuous service for more than ten years, the continuing need for their services, and the regularisation of subsequently appointed persons materially distinguished their case from the ordinary prohibition in Umadevi.

The Government’s reliance on the existence of more than 40,000 consolidated-pay posts and possible financial or administrative consequences was held insufficient, because the decisive considerations were whether the petitioners occupied sanctioned posts and whether their services were continuously required.

In light of Bhola Nath, the Court held that retaining employees for over a decade on sanctioned posts and then denying regularisation solely by invoking contractual status was arbitrary and inconsistent with the State’s obligation to act as a model employer.

The Government’s rejection letter dated 31 January 2022 was quashed.

The respondents were directed to regularise the petitioners in the post of Lab Technician Grade-III, with time-scale pay on completion of two years of service, on par with similarly placed persons.

Monetary benefits were made prospective from the date of the judgment, and no order as to costs was made; the connected miscellaneous petitions were closed.