Outsourced Contractual Employees Have No Right to Regularization, Service Extension, or Parity Under Scheme-Based Engagements

The petitioner was engaged as a Project Implementing Officer (PIO) for the Indo-German Development Cooperation Project (CREFLAT) on a contractual basis through the Society for Entrepreneurship Development (SOFED), an outsourcing agency, effective February 15, 2021

Her engagement was extended periodically, most recently until September 25, 2025

On August 28, 2025, her duties were reassigned to another officer due to alleged non-performance and lack of diligence

Subsequently, SOFED issued a fresh recruitment notification on November 5, 2025, to fill the PIO post

The petitioner challenged the discontinuation of her services and the new recruitment notice, seeking re-engagement and tenure extension coterminous with the project

1. Whether a contractual employee engaged through an outsourcing agency has a legal right to claim regularization or continuation of service until the completion of a project

2. Whether the Court can interfere with the administrative decision of an outsourcing agency to discontinue a contractual engagement and initiate a fresh recruitment process

The Court applied the principle that contractual and outsourced employees do not possess an automatic right to regularization, absorption, or permanency

the Court followed the recent precedents in Municipal Council, Nandyal v. K. Jayaram (2025) and Sunil Kumar Yadav v. State of Jharkhand (2026), which establish that outsourced workers cannot claim regular employee status or parity against a government body unless a sham contract is proved

Under State of Karnataka v. Uma Devi (2006), adherence to statutory recruitment rules is mandatory for public employment, and mandamus cannot be issued for blanket regularization contrary to such rules

It relied on Mohd. Abdul Kadir v. Director General of Police, Assam (2009) regarding ad-hoc appointments under schemes being coterminous with the scheme and Hargurpratap Singh v. State of Punjab (2007) regarding the replacement of ad-hoc employees

The Court observed that the petitioner’s relationship with the state respondents was not that of a direct employer-employee; rather, she was engaged via SOFED, an independent outsourcing agency

The Court reasoned that the terms of the engagement were purely contractual and fixed-term, expiring on September 25, 2025

While the petitioner cited past performance certificates, the Court held that such acknowledgments do not create an enforceable right to tenure extension

Furthermore, the respondents provided evidence that the petitioner’s performance was unsatisfactory, including failure to submit reports and monitoring field-work

Applying Sunil Kumar Yadav, the Court found that as a contractual appointee under a scheme, her right was limited to participating in fresh recruitment processes, and she could not prevent the agency from inviting new applications once her contract expired

The Court held that the writ petition was bereft of merit and dismissed it. All interim orders were vacated