University Can't Appoint on Contract When Its Own Rules Mandate 'Regular' Appointments: Himachal Pradesh High Court - 2025-09-01

University Cannot Offer Contractual Jobs When Advertisement and Rules Mandate Regular Appointments, Rules HP High Court

Shimla, HP – In a significant ruling on service law, the Himachal Pradesh High Court has held that offering contractual appointments based on an advertisement for regular posts is illegal, especially when the employer's own service regulations mandate regular appointments. Justice Sandeep Sharma set aside the verbal termination of several security guards by the National Law University (NLU), Shimla, and directed that they be treated as regular employees from their initial date of appointment.

The court observed that an employer, particularly a state instrumentality, cannot take undue advantage of the "poor plight" and unequal bargaining power of job seekers by changing the nature of employment midway through the recruitment process.

Case Background

The case involved a group of security guards, including Lalit Kumar, who responded to an NLU advertisement in 2021 for 10 regular posts of Security Guard. The advertisement noted that the number of posts was tentative and could be increased. Following the selection process, the Selection Committee recommended 26 candidates for appointment on a regular basis, citing the university's needs.

However, the NLU administration appointed the first 10 candidates on a regular basis while offering the petitioners and others contractual appointments. The petitioners accepted these terms due to their need for employment. Their contracts were extended several times with "fictional breaks" before their services were verbally terminated on January 1, 2025. They approached the High Court seeking regularization and quashing of their termination.

Arguments from Both Sides

Petitioners' Arguments: - Mr. Ajay Sharma, Senior Advocate, argued that the university's actions amounted to "changing the rules of the game midway." - He contended that offering different appointment terms (regular vs. contractual) to candidates selected through the same process violated the principles of equality under Articles 14 and 16 of the Constitution. - Citing the NLU's own Executive and Service Regulations, 2020, he highlighted Clause 2.5.2, which states, "All appointments under these regulations shall be in the nature of regular appointment." - The petitioners also alleged that the university deliberately inserted "fictional breaks" in their service to prevent them from completing the continuous service required to claim regularization under the state government's policy.

Respondent NLU's Arguments: - Mr. Amar Vivek, Advocate, initially challenged the petition's maintainability but later did not press the point. - He argued that only 10 regular posts were advertised and the petitioners did not score high enough to be placed in the top 10. - The university, facing a denial of financial aid from the state government, had to review its manpower and reduce the sanctioned strength of security guards from 30 to 17, making the petitioners' services redundant. - It was asserted that contractual employees have no vested right to regularization.

Court's Analysis and Ruling

Justice Sandeep Sharma rejected the university's contentions, finding its actions to be arbitrary and illegal. The court's reasoning was based on several key points:

• Violation of Own Regulations: The court found the NLU's primary fault was violating its own binding Service Regulations of 2020. The judgment emphasized:

  "Since as per aforesaid Regulations, all posts were to be filled up on regular basis and there is no provision contained in the Regulations for appointment on contract/temporary basis, appointment given to the petitioners in terms of the advertisement issued in the year, 2021 could not have been made on contractual basis."

• Unequal Bargaining Power: The court acknowledged the petitioners' vulnerable position, stating they had no real choice but to accept the contractual offer. It cited the Supreme Court's decision in Central Inland Water Transport Corporation Ltd. vs. Brojo Nath Ganguly to strike down unfair terms in contracts between parties with unequal bargaining power.

  "Petitioners, being on receiving end, could not bargain with the mighty University, which, on its own whims and fancies, has been appointing person’s dehors the rules."

• Condemnation of 'Fictional Breaks' : The practice of inserting artificial service breaks was strongly condemned. The court noted this was a deliberate tactic to deny employees the benefits of continuous service, a practice deprecated by the Supreme Court in Mohammad Abdul Quadir vs. DGP .

• Cadre Review Inapplicable Retrospectively: The court held that the university's decision to later review and reduce its cadre strength could not be used to justify the termination of employees who were legally entitled to regular appointment at the time of their recruitment, when 30 sanctioned posts were available.

Final Decision

The High Court allowed the petitions and quashed the verbal disengagement orders. It directed the NLU to re-engage the petitioners and declared that they "shall be deemed to have been appointed on regular basis from the date of their initial appointment."

While the period they remained disengaged will not entitle them to monetary benefits, it will be counted for seniority and all other consequential service benefits. This judgment reinforces the principle that public employers must adhere strictly to their own recruitment rules and cannot exploit the vulnerabilities of job applicants.