Appointment Without Formal Process Is 'Irregular,' Not 'Illegal,' If Employer Lacks Recruitment Rules; Cannot Be Terminated After 18 Years: Madhya Pradesh High Court - 2025-07-29

Employee's 18-Year Service, Once Regularized, Cannot Be Terminated by New Management, Rules MP High Court

Bhopal: The Madhya Pradesh High Court has delivered a significant judgment on service law, ruling that an employee's appointment, even if initially made without a formal selection process, is merely 'irregular' and not 'illegal' when the employer has no established recruitment rules. In a ruling providing relief to a long-serving employee, Hon’ble Shri Justice Vivek Jain held that once such an irregular appointment is regularized after years of service, the employee acquires an "indefeasible right" to employment that cannot be arbitrarily revoked by a subsequent change in management.

The court quashed the termination order issued by Bhopal City Link Limited (BCLL) against its Public Relations Officer (PRO), Sanjay Soni, deeming the action a "clear case of malice and mischief."

Background of the Case

The petitioner, Sanjay Soni, began working for BCLL in 2006 through an outsourcing agency. In 2008, due to the agency's poor performance, BCLL decided to engage Soni directly. This arrangement continued for over a decade.

In a Board of Directors meeting on May 5, 2022, BCLL decided to absorb Soni's services, officially appointing him to the post of PRO. A consequential order was issued on January 13, 2023.

However, following a "change of guard" in BCLL's management, the new Board decided to review Soni's appointment. In its 39th meeting, the Board, taking up the matter as an unscheduled "ex-agenda item," declared his initial appointment illegal and terminated his services with immediate effect.

Arguments from Both Sides

Petitioner's Stance: - Represented by Senior Advocate Shri K.C. Ghildiyal, the petitioner argued that his termination after 18 years of continuous service (first outsourced, then direct, and finally absorbed) was an act of vendetta by the new management. -

He contended that he was an absorbed employee and his services were terminated unceremoniously without any show-cause notice, charge sheet, or inquiry, violating principles of natural justice.

Respondent's Stance: - Counsel for BCLL, a government-owned company, argued that Soni's initial appointment was void as it was made without any advertisement or selection process. -

They claimed that all prior decisions to engage and absorb Soni were illegal acts, which the new management was right to correct. -

They also cited a pending criminal case against Soni for allegedly impersonating a PRO, a charge the court later dismissed as irrelevant.

Court's Analysis: Irregular vs. Illegal Appointment

Justice Vivek Jain's analysis hinged on a critical distinction between an 'irregular' and an 'illegal' appointment, referencing the landmark Supreme Court judgment in Secretary, State of Karnataka vs. Uma Devi (2006) .

The court noted that when questioned, BCLL's counsel admitted that the company had no formal rules or guidelines for staff recruitment . In the absence of such rules, the argument that Soni's appointment was 'illegal' for not following a prescribed procedure "pale[s] into insignificance."

The judgment highlighted key excerpts:

"In the absence of any rule having been framed or guidelines having been framed in the matter of appointment of staff of respondents No. 1 & 2, in such circumstances the entire arguments put forth by learned counsel for the respondents No. 1 & 2 in the matter of illegal appointment of the petitioner pale into insignificance."

The court found that Soni's appointment was, at worst, 'irregular' and that the employer was well within its rights to regularize his services, which it did in 2023. This action, supported by the principles laid down in Uma Devi , granted Soni an "indefeasible right to remain in employment."

Termination Deemed Malicious and Procedurally Flawed

The court strongly condemned the manner of termination, noting it was pushed through as an ex-agenda item without waiting for a previously constituted scrutiny committee's report. The resolution's wording, which threatened recovery from any officer who paid Soni's salary, was cited as evidence of the management's "adamancy" and "malice."

"The manner in which the proceedings...have been drawn, show a clear case of malice and mischief against the petitioner in terminating his services and mentioning that his appointment is illegal."

Final Verdict and Implications

The High Court allowed the petition, setting aside the termination order (Annexure P-1) and all consequential proceedings. It held that Soni was entitled to reinstatement with all consequential benefits, including full back wages from the date of the interim stay order.

This judgment serves as a crucial precedent, affirming that state instrumentalities cannot use the pretext of an 'illegal appointment' to terminate long-serving employees, especially when they themselves have failed to establish a formal recruitment process. It reinforces the principle that regularization, once granted after substantial service, cannot be undone at the whim of new management.