Termination of contractual employee via stigmatic order without regular departmental enquiry is legally unsustainable.

The petitioner was appointed as a Gram Rojgar Sahayak in 2013 under the 2012 Scheme of the M.P. Rajya Rojgar Guarantee Parishad.

On April 1, 2022, he was served a show-cause notice alleging financial irregularities, including the creation of a fake family ID for pension benefits and improper payments to beneficiaries.

The petitioner requested relevant documents and time to respond, but the respondents issued a termination order on April 11, 2022, without providing the documents or conducting a formal departmental inquiry.

The State contended that as a contract employee, his services could be terminated without notice under the scheme, and that an alternative remedy of appeal was available.

1. Whether the termination of a contractual employee based on allegations of misconduct (a stigmatic order) is valid without conducting a regular departmental inquiry.

2. Whether the availability of an alternative remedy bars the High Court from exercising jurisdiction under Article 226 when principles of natural justice are violated.

The court applied the principle that a "stigmatic" termination order—one based on misconduct rather than being a simple termination simpliciter—requires a full departmental inquiry to satisfy the principles of natural justice.

The court relied on Rahul Tripathi v. Rajeev Gandhi Shiksha Mission (2001) and Malkhan Singh Malviya v. State of M.P. (ILR 2018 MP 660), which established that orders entailing serious consequences on future prospects require an inquiry.

Regarding administrative reasoning, it cited Kranti Associates Pvt. Ltd. v. Masood Ahmed Khan (2010), holding that administrative decisions affecting rights must be reasoned and non-capricious.

Additionally, it applied Whirlpool Corporation v. Registrar of Trade Marks (1998) to establish that alternative remedies do not bar writ petitions when natural justice is breached.

The Court examined the language of the impugned order and found it explicitly detailed allegations of "negligence," "forged IDs," and improper "transfer of funds," making it clearly "stigmatic" rather than a routine termination of contract.

The Court reasoned that since the order cast a shadow on the petitioner’s character and future employment prospects, a mere show-cause notice was insufficient; a regular departmental inquiry with the opportunity to cross-examine witnesses and examine evidence was mandatory.

The Court further noted that the respondents failed to provide the documents the petitioner requested to prepare his defense, rendering the process a violation of the "reasonable opportunity" doctrine established in Khem Chand v. Union of India.

The Court dismissed the "alternative remedy" argument, clarifying that the patent illegality of a stigmatic order without inquiry justifies direct intervention under Article 226.

The High Court set aside the termination order dated April 11, 2022, and granted the State liberty to initiate a fresh inquiry in accordance with the law while directing the release of unpaid salary from April 2025 onwards subject to verification.