Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(HP) 1122

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
SANDEEP SHARMA, J.
Nitin Thakur – Petitioner
Versus
State of Himachal Pradesh and Ors. – Respondent
CWP No.4971 of 2024 a/w CWP Nos. 1327, 1672, 1718, 2042, 2571, 3779, 4257, 4263, 4264, 4265, 4312, 4485, 4846, 4869, 4904, 4931, 4968 to 4970, 4972, 4973, 5084, 5088, 5271, 5340, 5352, 5409, 5500, 5511, 5526, 5530, 5591, 5650, 5770, 5862, 5961, 5962, 11785, 11839, 11862, 11921, 12094, 12177, 12179, 12200, 12203, 12216, 12234, 12439, 12248, 12263, 12264, 12271, 12296, 12302, 12556, 12562, 13110, 13362, 13379, 14510, 14511, 15300, 15304, 15308 of 2024 and CWP No. 67, 2782 and 4133 of 2025
Decided On : 23-09-2025

Advocates Appeared:
For the Petitioners:Mr. Sanjeev Bhushan, Mr. Sunil Mohan Goel, & Mr. Lovneesh Kanwar, Senior Advocates with Mr. C.N.Singh, Dr. Nidhi Singh, Mr. Devender K. Sharma, Anshul Gandhi, Mr. Ramesh Chand, Mr. Rakesh Chauhan, Mr. Daleep Chand, Mr. Dhiraj Thakur, Ms. Priyanka Chandel, Mr. Rocky, Mr. Ashwani Kumar Sharma, Mr. Nitin Rishi, Mr. Rajesh Kumar, Mr. Tek Chand, Mr. Arun Kaushal, Mr. Nimish Gupta and Mr. Mohar Singh, Advocates,
For the Respondents:Mr. Anup Rattan, Advocate General, Mr. Rajan Kahol, Mr. Vishal Panwar & Mr. B.C. Verma, Additional Advocates General, with Mr. Ravi Chauhan, Deputy Advocate General, Mr. Naveen Kumar Pathania, Advocate, Mr. Balram Sharma, Deputy Solicitor General of India with Mr. Kunal Thakur, CGC.

Contractual employees in state-controlled societies executing departmental projects are state employees; corporate veil lifted to grant regularization after two years' service per policy, ensuring parity and preventing discrimination.

Headnote:(A) Service Law - Regularization of contractual employees - Employees engaged on various technical posts through society or department for executing departmental projects - Society registered under Societies Registration Act, fully owned, controlled, managed and funded by state with all functionaries state officials - Headquarters in state undertaking - Not autonomous but camouflage/extension/limb of state department - Corporate veil lifted to prevent fraud, exploitation, discrimination - Employees performing departmental functions treated as state employees - Entitled to regularization after completion of two years continuous contractual service per state policies (2007, 2008, 2009, 2021, 2023) with all consequential benefits - Parity with similarly situated employees regularized in other departments/projects/societies - State as model employer cannot use societies to deny permanency, equal pay, legitimate expectations under Articles 14, 16 - Temporary/project appointments distinguished where services co-terminus with closure; here projects ongoing (till 2036). (Paras 16, 30-54, 77, 89)

(B) Per incuriam - Not attracted; prior judgments distinguish on facts from temporary daily wage muster roll employees under closed schemes without state control; rule applies only to glaring omission of binding precedent central to issue leading to different outcome. (Paras 78-85)

Facts of the case:
Batch of writ petitions by contractual employees on posts like engineers, draftsmen, facilitators etc., appointed pursuant to advertisements by society/project manager or director, selected on merit, joined and renewed contracts, working 4-7 years continuously in department/subsidiaries despite project nature; denied regularization post two years per state policy claiming society employees not state; interim status quo maintained; similar employees in other societies/departments regularized.

Findings of Court:
Society purposely created to execute departmental works funded externally/internally; full state control via governing council, CEO, approvals, directives; employees de facto state employees; regularization directed from due date with consequential benefits.

Issues: Whether society autonomous or state-controlled/managed for departmental functions; employees serving department or society; society created to deny regularization/equal pay (corporate veil); entitlement to state regularization policy post two years service vis-a-vis similarly situated. (Para 16)

Ratio Decidendi: Where society is state-controlled instrumentality performing governmental functions, veil lifted to treat contractual employees as state employees entitled to policy benefits; parity/legitimate expectation mandates non-discrimination; distinguishes temporary project terminations; state cannot exploit via facades. (Paras 54-89) Result : Writ petitions allowed; respondents directed to regularize contractual services after two years in terms of state regularization policy.

Table of Content
1. contractual appointments by state society in horticulture. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. society employees claim regularization per state policy. (Para 7 , 8 , 9 , 10 , 11 , 14)
3. society autonomous; no regularization rights. (Para 12 , 13)
4. arguments on society control vs project temporariness. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28)
5. bylaws prove state control; prior regularizations. (Para 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54)
6. lift veil; precedents favor society employee regularization. (Para 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 64 , 65 , 66 , 67 , 68 , 69 , 70 , 71 , 72 , 73 , 74)
7. distinguish precedents; no per incuriam; state liability. (Para 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86 , 87 , 88)
8. regularize after two years contractual service. (Para 89 , 90)

Judgment :

Sandeep Sharma, J.

Since common question of facts and law are involved in the above captioned cases and petitioners therein are aggrieved of inaction on the part of the respondents to regularize them from the date they have completed two years service on contract basis, this court after having clubbed all the cases, heard them together and now with the consent of learned counsel for the parties, same are being disposed of vide common judgment.

2. Petitioners herein, who were offered appointment on contract basis on different posts i.e. Assistant Engineer, Jr. Engineer (Civil Electrical/ Mechanical Instrumentation, Draftsman, Facilitator, Surveyors, Technical Facilitator, Procumbent Officer, Programmer MA Procurement, MA Accounts, Farm Manager, Assistant Farm Manager. Office Assistant( Management/IT) either by Project Manager, Himachal Pradesh Horticulture Development Society (HPHDS) or by Director of Horticulture, on different pay scales etc., have been denied the benefit of regularization in terms of policy of regularization framed by the Government of Himachal Pradesh on the pretext that they are not employees of the respondent-State, but of Societies, as named herein above.

3. After being appointed on contract basis by agencies detailed herein above i.e. Himachal Pradesh Horticulture Development Society and by Director of Horticulture, Himachal Pradesh, petitioners herein, who have been performing work in the Directorate of Horticulture, Himachal Pradesh as well as in HPMC, Himachal Pradesh Agriculture Marketing Board, State Horticulture Universities and Nursery Management Societies etc., have filed afore petitions seeking therein direction to the respondents to regularize their contractual services in the Directorate of Horticulture after completion of two years of contractual service in terms of policy of regularization framed by the respondent-State (Annexures P-7 and P- 8) with all consequential benefits.

4. Though facts of all these petitions are very much common but for the sake of clarity and for taking note of documents adduced on record at the behest of the petitioners, this Court, with the consent of learned counsel for the parties, shall be referring to the facts of lead case i.e. CWP No. 4971 of 2024, titled as “ Nitin Thakur v. State of Himachal Pradesh and Ors. ”

5. For completion of facts, it may be noted that petitioner Nitin Thakur had approached the Hon'ble Court by way of filing CWP No. 4971 of 2024 in May, 2024, which was listed on 31.5.2024, on which this Court passed following order: “In the meantime, the respondents shall maintain status quo qua the services of the petitioner/applicant.” Thereafter, the interim order remained in force, on account of which the petitioner Nitin Thakur, continued in service with the respondent Society. Such order was passed in each of the petitions, and as on date, all the petitioners are still continuing in service with the respondent Society. Thereafter, some contempt petitions were also filed in some of the petitions on account of the fact that the pet