Facts: The appellants, initially appointed as Junior Engineers (Agriculture) on a contractual basis in 2012 against sanctioned posts, were granted yearly extensions until 2023. The terms of their appointment stipulated that the engagement was temporary and contractual, with no guarantee of regularization. After serving for over a decade, the State declined further extensions, prompting the appellants to file writ petitions seeking regularization, arguing that their long service and the State's conduct created a legitimate expectation of regularization.
Procedural Posture: The appellants' writ petitions were dismissed by a Single Judge of the High Court, a decision upheld by the Division Bench in intra-court appeals. The appellants then appealed to the Supreme Court, challenging the concurrent judgments of the High Court.
Issue: (1) Did the High Court judgments warrant interference by the Supreme Court under Article 136 of the Constitution? (2) Was the State's refusal to regularize the appellants' services, despite their long tenure, arbitrary and violative of Article 14 of the Constitution? (3) Can contractual stipulations barring regularization override constitutional guarantees, particularly when there is unequal bargaining power between the State and the employees?
Holding: Yes, the Supreme Court held that the State's action was arbitrary and violative of Article 14. The Court directed the State to regularize the services of the appellants.
Reasoning: The Court reasoned that the State, acting as a model employer, cannot exploit its employees by taking advantage of their vulnerability and unequal bargaining power. The Court emphasized that fundamental rights cannot be waived, and contractual stipulations barring regularization cannot immunize arbitrary State action from constitutional scrutiny. The Court also invoked the doctrine of legitimate expectation, noting that the appellants' long and continuous service, coupled with repeated extensions, created a reasonable expectation of regularization. The Court distinguished the case from State of Karnataka v. Umadevi, emphasizing that the appellants' initial appointments were made after a due selection process. The Court held that the State's decision to discontinue the appellants' services after nearly ten years, without cogent reasons or a speaking order, was manifestly arbitrary and inconsistent with the State's obligation to act fairly.