Contractual Employees Have No Legal Right To Seek Regularization Or Permanency; Engagement Ends With Contract Term: Punjab & Haryana High Court

"A contractual engagement by its very nature carries no promise of permanence. It begins with consent and ends by the terms to which the parties have bound themselves. When the tenure expires, the engagement ceases and that cessation does not amount to termination but simply the operation of the contract." High Court of Punjab & Haryana, in a significant ruling dated July 13, 2026, held that contractual employees have no legal right to continue in service or seek permanency, as such engagements are governed strictly by the terms of the agreement.

A bench of Justice Namit Kumar observed that "it is well settled proposition of law that contractual employee has no legal right to continue in service or seek permanency," while dismissing a plea for regularization filed by two Chowkidars who had served for nearly 15 years.

The petitioners were initially appointed as Chowkidars on a contract basis in 1991 and 1992 by the Punjab Water Supply & Sewerage Board. In 2000, their services, along with the tubewells they managed, were transferred to the Municipal Council, Garhshankar, where they continued to work until 2007. They approached the High Court seeking a writ of mandamus for regularization of their services based on the Punjab Government’s Policy Instructions dated December 15, 2006.

The primary question before the court was whether contractual employees are entitled to regularization under the State's 2006 policy instructions. The court also examined whether long years of service on a contract basis confer a legal right to permanency or absorption into regular service against the mandate of public appointment rules.

Contractual Work Does Not Promise Permanence

The court emphasized the inherent nature of contractual employment, noting that such engagements are finite and consensual. Justice Namit Kumar observed that once the specified tenure of a contract expires, the relationship between the employer and the employee naturally ceases. The bench clarified that such a cessation is merely the operation of the contract and cannot be equated to a formal termination of service that would require specific legal procedures.

Policy Instructions For Regularization Not Applicable To Contractual Staff

Examining the Punjab Government’s policy dated December 15, 2006, the court noted that the scheme was specifically framed for daily wagers, work-charged employees, and those on ad-hoc or temporary status. The bench pointed out that the petitioners were appointed strictly on a "contract basis," a category that falls outside the ambit of the 2006 instructions. The court held that the petitioners could not claim benefits from a policy that did not explicitly cover their category of employment.

Absence Of Sanctioned Posts Bars Regularization

The court took significant note of the fact that there were no sanctioned posts of Chowkidar available within the Municipal Council. Relying on an additional affidavit filed by the respondents, the court observed that without a sanctioned vacant post, no direction for regularization or absorption could be issued. It was further noted that the operation of tubewells had since been outsourced to an outside agency, leaving no functional requirement for the petitioners' roles within the Council.

Appointments Must Follow Constitutional Scheme Under Articles 14 & 16

Justice Namit Kumar reiterated that any regular appointment or regularization must conform to the constitutional scheme of public employment under Articles 14 and 16 of the Constitution of India. The court observed that the petitioners were adjusted in the Municipal Council without following any regular recruitment process, competitive selection, or the rules in force at the time. The bench noted that "back door entries" or appointments contrary to the constitutional scheme cannot be regularized.

Judicial Review Cannot Mandate Policy Decisions

Citing the Supreme Court’s ruling in Union of India vs. Ilmo Devi, the High Court held that regularization is a policy decision and the courts, in the exercise of judicial review under Article 226, cannot issue a Mandamus to regularize employees. The bench highlighted that the High Court should not issue directions for absorption unless the employees were appointed through a regular recruitment process against sanctioned vacant posts.

Theory Of Legitimate Expectation Not Applicable

The court further ruled that a person entering contractual or temporary employment is fully aware of the consequences and the nature of the engagement. Consequently, such employees cannot invoke the theory of "legitimate expectation" to seek confirmation in a post. The bench held that the State cannot constitutionally make a promise of permanence to a contractual worker whose initial appointment bypassed the regular selection procedure involving the Public Service Commission or equivalent bodies.

The court concluded that the petitioners failed to demonstrate any statutory right to have their contracts extended or their services regularized. Finding no merit in the petitions, the High Court dismissed the writ petition and the associated contempt petition, affirming that contractual employees do not have a vested right to permanency regardless of the duration of their service.

Date of Decision: 13 July 2026