Regional Rural Banks Cannot Perpetuate Exploitative Temporary Engagements For Perennial Roles; Must Frame Regularisation Scheme Under Article 226: Orissa High Court

"This Court taking into account the nature of the award passed by the Tribunal and the decision of the High Court of Karnataka as well as High Court of Andhra Pradesh, Chhatisgarh and Tripura... is of the view that with regard to regularisation of the Petitioners, who are continuing as Sweepers and Messengers and in other works on temporary basis, Opp. Party-Bank is required to frame a Scheme." Orissa High Court has held that Regional Rural Banks cannot indefinitely exploit daily-wage and temporary workers discharging perennial duties by taking mechanical refuge under the principles of regularisation embargoes.

Disposing of a batch of writ petitions on October 28, 2026, Justice Biraja Prasanna Satapathy quashed an order of Odisha Grameen Bank that had summarily rejected the regularisation claims of its long-serving temporary employees. The Court commanded the bank to frame a dedicated scheme within four months for absorbing such workers in accordance with prevailing judicial precedents across other Regional Rural Banks.

The petitioners were engaged on a temporary basis across various branches of Odisha Grameen Bank in diverse roles, including sweepers, messengers, drivers, data entry operators, and IT technicians, with several continuing for years without regularisation. Following directions issued by the High Court in an earlier round of litigation to decide their representations in light of the National Industrial Tribunal award and the landmark ruling in State of Karnataka v. Uma Devi, the bank rejected their claim on May 27, 2019, asserting that they had not been appointed pursuant to public notifications against sanctioned posts. The petitioners subsequently assailed the rejection order under Article 226 of the Constitution of India.

The legal issues before the Court were whether a Regional Rural Bank can deny regularisation to temporary workers performing perennial duties on the ground that their appointments lacked initial formal advertisements, and whether the bank was obligated to frame a comprehensive scheme for absorbing irregularly engaged staff in parity with other Regional Rural Banks.

Advancing arguments for the petitioners, counsel highlighted that under an award passed by the National Industrial Tribunal chaired by Justice S. Obul Reddy, temporary and part-time messengers and sweepers in Regional Rural Banks were held entitled to regularisation from their initial continuous engagement. It was submitted that High Courts in Karnataka, Andhra Pradesh, Chhattisgarh, and Tripura had directed the framing and implementation of regularisation schemes for similarly situated bank staff, with challenges by bank managements being dismissed by the Supreme Court. Counsel further placed reliance on recent apex court rulings, including Jaggo v. Union of India, Shripal v. Nagar Nigam, Ghaziabad, Dharam Singh v. State of U.P., and Sukhendu Bhattacharjee v. State of Assam, to emphasize that public sector institutions cannot maintain perpetual casualisation.

Perpetual ad-hocism and gig-economy practices inside public institutions strongly disapproved

The bank resisted the pleas by asserting that the writ petitions were unmaintainable because the petitioners had not completed ten years of service on sanctioned posts prior to approaching the Court, and their continuance was solely on account of interim judicial protection. Placing reliance on Uma Devi, Nanda Kumar v. State of Bihar, and Vibhuti Shankar Pandey v. State of Madhya Pradesh, the bank contended that appointments made without open competition or sanctioned vacancies cannot be regularised through judicial fiats. The bank further submitted that positions such as sweepers and messengers were paid out of branch sundry expenses and did not exist under the governing statutory recruitment rules.

The High Court observed that the Supreme Court has repeatedly cautioned state entities against weaponizing Uma Devi to legitimize exploitative engagements of workers discharging indispensable and recurring functions. Evaluating the contemporary jurisprudence, the Court noted that administrative constraints cannot trump the legitimate rights of workmen who have served continuously in de facto regular roles. The bench emphasized that prolonged extraction of regular labor under informal labels offends constitutional fairness guaranteed under Article 14 of the Constitution.

Award of National Industrial Tribunal and sister RRB precedents bind equitable consideration

Justice Satapathy noted that the National Industrial Tribunal had specifically ruled that the absence of sanctioned posts is immaterial when bank managements extract full-time work from staff shown merely on acquittance rolls as daily-wagers. The Court took judicial notice of the fact that the Andhra Pradesh High Court had allowed identical reliefs for Andhra Pradesh Grameena Vikas Bank, which attained finality upon dismissal of the bank's Special Leave Petition by the Supreme Court. Similar schemes had also been mandated and enforced in Karnataka, Chhattisgarh, and Tripura.

Finding the Odisha Grameen Bank's mechanical rejection unsustainable in law, the Court held that the bank is legally obligated to introduce an institutional mechanism rather than relying on technical recruitment lacunae. The bench stressed that where the nature of duties performed is essential and recurring, the establishment must reflect that reality in its sanctioned strength and engagement practices.

Bank directed to formulate regularisation scheme in parity with sister institutions

The High Court quashed the bank's rejection order dated May 27, 2019, holding that the petitioners could not be excluded from consideration when identical classes of employees across other Regional Rural Banks had been granted absorption. The Court directed Odisha Grameen Bank to formulate a regularisation scheme patterned on the model adopted by Andhra Pradesh Grameena Vikas Bank within four months, and thereafter regularise the services of the petitioners against available or similar posts with due regard to seniority.

Date of Decision: October 28, 2026

Case Title: Apurba Ranjan Mohanty & Others v. Odisha Grameen Bank & Others