Stigmatic termination of a contractual employee without a regular departmental enquiry is legally unsustainable and violates natural justice.

The petitioner was appointed as a Gram Rojgar Sahayak in 2011.

Following complaints from villagers, Respondent No. 3 conducted a preliminary fact-finding enquiry without the petitioner’s participation.

Based on this report, a show-cause notice was issued, and the petitioner’s services were terminated via order dated 21.05.2019 issued by the CEO, Janpad Panchayat, Pichhore.

The termination order alleged negligence in duty, including failure to complete houses under the Pradhan Mantri Awas Yojana and poor performance in resolving CM Helpline complaints.

The petitioner’s appeal was subsequently rejected by the CEO, Zila Panchayat, Shivpuri, on 24.12.2019.

The petitioner challenged these orders under Article 226 of the Constitution, contending the termination was stigmatic and lacked a regular departmental inquiry.

1. Whether a termination order for a contractual employee that contains allegations of misconduct and dereliction of duty is "stigmatic" in nature.

2. Whether the services of a contractual employee can be terminated through a stigmatic order without conducting a regular departmental enquiry and providing a reasonable opportunity for defense.

The court relied on the principles of natural justice and the concept of "reasonable opportunity" as summarized by the Supreme Court in Khem Chand v. The Union of India, which requires an opportunity to deny guilt, cross-examine witnesses, and represent against proposed punishments.

It applied the precedents of Rahul Tripathi v. Rajeev Gandhi Shiksha Mission and Malkhan Singh Malviya v. State of M.P., which establish that if a termination order casts a stigma affecting future prospects, it cannot be passed without a full inquiry.

The court referred to the MGNREGA Guidelines (Clause 15 & 16) and Devkaran Patidar v. State of M.P., affirming that termination for negligence requires charges to be proved through a formal process.

The court examined the language of the impugned order dated 21.05.2019, which explicitly accused the petitioner of negligence and failing to rectify his work conduct.

The court determined that such findings transform a simple termination into a "stigmatic" one because they carry serious consequences for the employee's future employment prospects.

Since the respondents admitted that no charge-sheet was issued and no regular departmental inquiry was conducted before passing the order—relying instead solely on a preliminary fact-finding report—the court found the procedure to be a violation of the principles of natural justice.

The court noted that even for contractual or contingency workers, an order founded on acts of commission or omission amounting to misconduct requires an inquiry and a hearing.

The High Court allowed the writ petition, quashing the termination order dated 21.05.2019 and the appellate order dated 24.12.2019.

The respondents were directed to reinstate the petitioner forthwith with all consequential benefits, except back wages based on the principle of "no work no pay". However, the court granted the respondents liberty to initiate fresh action against the petitioner in accordance with the law.