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

The petitioner was appointed as a Gram Rojgar Sahayak in Gram Panchayat Maharajpura, Gwalior in 2013

Following a notice issued on 08/06/2016 regarding alleged tampering with Muster Rolls and financial irregularities, the petitioner’s services were terminated via a summary order dated 03/09/2016, and his subsequent appeal was rejected on 05/04/2018

The State contended that as a contractual employee under the 2012 guidelines, the Collector possessed the power to terminate services at any point without a show cause notice or regular inquiry

The petitioner challenged these orders as being "stigmatic" and passed without the due process of a regular departmental inquiry

1. Whether the termination order dated 03/09/2016 was "stigmatic" in nature due to the specific allegations of misconduct and forgery

2. Whether the services of a contractual employee can be terminated on grounds of misconduct without conducting a regular departmental inquiry in violation of the principles of natural justice

The court primarily applied the principle that if a termination order is "stigmatic"—meaning it casts a slur on the employee's character or future prospects—it cannot be passed without a regular departmental inquiry, regardless of the employee's contractual status

It relied on Rahul Tripathi v. Rajeev Gandhi Shiksha Mission [2001 (3) MPLJ 616] and Malkhan Singh Malviya v. State of M.P. [ILR (2018) MP 660], which established that such orders entail serious consequences and require an opportunity to deny guilt

Reference was also made to Khem Chand v. Union of India regarding the three-fold concept of "reasonable opportunity" and Clause 16 of the MGNREGA guidelines, which necessitates proving charges of gross negligence before termination

The court examined the text of the termination order and found it contained specific findings of "heavy misconduct," "forgery," and "financial irregularities"

By using terms like "penal" and attributing "serious misconduct," the court determined the order was clearly stigmatic rather than a simple termination of contract

The High Court reasoned that under such circumstances, the respondents could not bypass the principles of natural justice by citing Clause 15 of the guidelines

Drawing from Omprakash Gurjar v. Panchayat and Rural Development, the court held that the absence of a charge sheet, witness cross-examination, and a formal inquiry rendered the termination arbitrary and unsustainable in law

The court quashed the termination order dated 03/09/2016 and the appellate order dated 05/04/2018. The respondents were directed to reinstate the petitioner with all consequential benefits, excluding back wages on the principle of "no work no pay". However, liberty was granted to the respondents to take fresh action in accordance with the law if deemed necessary