Case at a Glance
Contractual Sub Engineers working for years under MGNREGS and the M.P. Police Housing and Infrastructure Development Corporation challenged the 2022 recruitment advertisement for regular Group-III engineering posts and the 2020 rule reserving only 20% of direct-recruitment vacancies for contract staff. They argued that they had a right to be regularised first. A Division Bench of the Madhya Pradesh High Court dismissed the batch, holding that contract employment outside the recruitment rules creates no vested right to regularisation, the 20% (later 50%) quota with age relaxation is a reasonable policy, and the petitioners’ own contractual posts were unaffected.
The petitioners were Sub Engineers appointed on contract between roughly 2007 and 2017, some in MGNREGS (a Centrally funded scheme in which all posts are contractual) and others in the M.P. Police Housing and Infrastructure Development Corporation, where regular and contractual posts are distinct. A State policy of 5 June 2018 provided for phased conversion of contractual posts and, in Clause 1.4, reserved 20% of posts in each recruitment for contract employees with age relaxation equal to contract service, capped at 55 years. A notification of 1 February 2020 inserted Rule 11(8) in the Panchayat and Rural Development recruitment rules of 1999 to the same effect, for contract employees with at least five years’ service. A later order of 22 July 2023 raised the quota to 50%.
In July 2022 the M.P. Employee Selection Board advertised Group-III posts, including Sub Engineer, in engineering departments and public undertakings. The petitioners argued that under Uma Devi they had a right to be considered for regularisation after ten years, that the advertisement and the 2020 rule destroyed that chance, that the State must act as a model employer, and that experienced staff aged 35 to 55 could not fairly compete with fresh graduates. They relied on Jaggo v. Union of India, (2024) 12 SC CK 0073 and a Division Bench decision in a Municipal Corporation case. The State replied that they were appointed on contractual posts on clear terms, would continue till their projects lasted, and were not losing jobs or pay.
The Key Question Before the Court
Do long-serving contractual employees have a vested right to be regularised before the State fills regular posts by open recruitment, and is a 20% quota with age relaxation for them arbitrary?
Contract Posts Intact, Policy Within the State’s Domain
The Bench, in a judgment written by Justice Vivek Jain, found that the petitioners were appointed against sanctioned contractual posts, not irregularly against regular vacancies, and that those posts and their service conditions remained untouched by the recruitment. The Municipal Corporation decision was distinguished because there regular posts were filled after the employees’ own posts were exhausted. Following Secretary, State of Karnataka v. Uma Devi, (2006) 04 SC CK 0104, the Court held that contract employment outside the regular recruitment rules creates no vested right to regularisation, and legitimate expectation cannot be used to demand en-bloc absorption. Jaggo v. Union of India, which concerned terminated workers, and Dharam Singh, (2025) 08 SC CK 0161, which concerned Class-IV employees without any structured regularisation mechanism, were distinguished.
On the challenge to policy, the Court relied on State of Punjab v. Ram Lubhaya Bagga, (1998) 02 SC CK 0106 and State of Jharkhand v. Ashok Kumar Dangi, (2011) 07 SC CK 0070 to hold that courts do not second-guess policy unless it is arbitrary, mala fide or based on extraneous considerations. The 20% quota (raised to 50%) with age relaxation balanced the claims of experienced staff with the intake of fresh talent, and the 2020 rule mirrored Clauses 1.4 and 1.11 of the 2018 policy. Applying the proportionality test from K.S. Puttaswamy v. Union of India, the Court found nothing disproportionate in the rule or the advertisement.
What the Court Actually Held
- Contractual employees appointed outside the regular recruitment rules have no vested right to regularisation, and legitimate expectation does not justify en-bloc absorption.
- Rule 11(8), inserted on 1 February 2020 reserving 20% of direct-recruitment vacancies for contract staff with five years’ service, is not ultra vires.
- The 2022 recruitment advertisement does not affect the petitioners’ contractual posts or service conditions and was not interfered with.
- The writ petitions were dismissed; petitioners may compete within the 20% (or 50%, as applicable) quota with age relaxation, or in the open category subject to its age limit.
Why This Judgment Matters
- Lakhs of contract employees in government schemes across India hope for regularisation; the ruling clarifies that service length alone does not create a right.
- It upholds a structured route — a reserved quota with age relaxation — as a fair middle path between regularisation and open recruitment.
- It distinguishes the Supreme Court’s recent pro-worker rulings such as Jaggo, limiting them to cases of termination or adverse impact on service.
What Should Advocates Take Away From the Judgment?
For Contract Employees
- Apply under the reserved quota and claim age relaxation equal to your contract service, subject to the 55-year cap.
- You may also compete in the open category, subject to its age limit.
- Your existing contract post continues; the recruitment does not by itself end your engagement.
For Counsel
- Regularisation claims are stronger where employees are being terminated or replaced, as in Jaggo, than where only separate regular posts are filled.
- Check whether appointment was against sanctioned contractual posts or irregularly against regular vacancies; the distinction was decisive.
- Policy challenges need a showing of arbitrariness, mala fides or extraneous considerations.
Key Takeaways
- No vested right to regularisation arises from contract service outside the rules.
- A quota with age relaxation for contract staff is a valid policy choice.
- Recruitment to regular posts that leaves contract posts intact causes no legal injury.
- Jaggo and Dharam Singh were distinguished on facts.
Frequently Asked Questions
Do contract employees get regularised after 10 years of service?
Not automatically. The Madhya Pradesh High Court held that contract service outside the regular recruitment rules gives no vested right to regularisation.
What benefit do contract employees in Madhya Pradesh get in regular recruitment?
Those with at least five years’ contract service can compete within a reserved quota — 20% under the 2020 rule, raised to 50% by the 2023 order — with age relaxation equal to contract service, capped at 55 years.
Will the petitioners lose their jobs?
The Court noted that their contractual posts and service conditions are not affected by the recruitment; they continue as per their terms of engagement.
Conclusion
The judgment balances the claims of long-serving contract staff against the constitutional requirement of open recruitment. It treats the reserved quota and age relaxation as the route to regular service, rather than a right to be absorbed before others can be recruited.
Practical takeaway: Contractual employees should use the reserved quota and age relaxation in regular recruitment; a writ to stop recruitment on the strength of service length alone is unlikely to succeed.
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