In a significant decision, the Madhya Pradesh High Court, comprising Acting Chief Justice Shri Sanjeev Sachdeva and Justice Vinay Saraf, set aside the order of a single judge that directed the State of Madhya Pradesh to reinstate contractual Data Entry Operators whose services were terminated after the expiration of their contractual terms.
The case, titled State of Madhya Pradesh & Ors. vs. Rajeev Singh & Ors. (Writ Appeal No. 607 of 2023), dealt with the legality of the termination of contractual employees without an opportunity for a hearing, focusing on the principles of natural justice and the scope of judicial review over administrative decisions in the realm of contractual employment.
Background of the Case
In 2010, the Madhya Pradesh State Government created 50 posts of Data Entry Operators on a contractual basis for two years, with appointments being extended in 2013 and again in 2015 for a reduced number of posts. On August 9, 2018, the Commissioner, Planning, Economics, and Statistics Department, Bhopal, issued an order to discontinue the contracts from September 1, 2017, without further extensions. The employees continued working without a formal extension until August 9, 2018, when the discontinuation order was implemented.
Subsequently, the affected employees, led by Rajeev Singh, filed a writ petition (W.P. No. 21766/2018) seeking regularization of their services or continuation until they were replaced by permanent employees. The single judge ruled in favor of the petitioners, quashing the discontinuation order dated August 9, 2018, and directing their reinstatement.
Legal Issues Involved
The appeal raised several key legal issues:
1. Applicability of Natural Justice: Whether the contractual employees were entitled to a hearing before their contracts were not renewed.
2. Interpretation of Contractual Employment: Whether the termination of the employees’ services after the contract’s expiration was valid under the Madhya Pradesh Contractual Appointment to Civil Post Rules, 2017.
3. Judicial Review of Contractual Matters: The extent to which courts can review administrative actions involving contractual employment.
Court’s Decision and Observations
The Division Bench, led by Justice Vinay Saraf, overturned the single judge’s order, stating that the petitioners were not entitled to any hearing before their contracts expired. The court emphasized that “a contractual employee cannot claim regularization or permanent status, and their services are co-terminus with the period of contract.”
Quoting the Court’s Ruling:
“Contractual appointments work only if they are mutually beneficial to both contracting parties and not otherwise. The Court cannot sit in appeal to decide whether a more reasonable decision or course of action could have been taken in the circumstances.” — Justice Vinay Saraf
The court underscored that the petitioners’ contracts had already expired on August 31, 2017, and were not renewed. The reliance by the single judge on the principles of natural justice was deemed misplaced, as there was no formal termination; the contracts had simply reached their end.
The Bench further clarified that the judgment in the case of Ku. Shrilekha Vidyarthi vs. State of U.P. (AIR 1991 SC 537), relied upon by the single judge, was not applicable in this context. The court highlighted that the Shrilekha judgment pertained to situations where employees were terminated during their contract period without due process, whereas in the present case, the contracts had naturally expired.
Key Observations by the Court
– The court held that “termination or non-renewal of a contractual employee cannot be equated with removal or dismissal, and hence the principles of natural justice do not necessarily apply.”
– It further stated that “the State’s decision not to continue the contractual appointments cannot be quashed as arbitrary or unreasonable, as the employment conditions were clearly defined as contractual and temporary from the outset.”
Representation and Counsel
The State of Madhya Pradesh was represented by Shri Bramha Datt Singh, Deputy Advocate General, while Shri Praveen Verma appeared for the respondents, Rajeev Singh and others.
The appeal by the State of Madhya Pradesh was allowed, and the writ petition by Rajeev Singh and others was dismissed, marking a decisive interpretation of contractual employment law in India.
