State Cannot Abruptly End Long-Term Contractual Service | SC

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termination of long-term contractual employment

Case Details: Bhola Nath vs. State of Jharkhand [2026] 183 taxmann.com 59 (SC)

Judiciary and Counsel Details

  • Vikram Nath & Sandeep Mehta, JJ.
  • Kumar Shivam, Nishant Kumar, Aors, Pradeep Kumar Tripathi, Gaurav Prakash Pathak, Aashish Kumar, Advs., Saurabh Mishra & K. Parameshwar, Sr. Advs. for the Petitioner.
  • Ms Ruchira Gupta, Nilesh Kumar, Ms Adya Shree Dutta, Ms Pooja Tripathi, Mohtisham Ali, Ms Dorjee Ongmu Lachungpa, Areen Gulati, Aniruddha Saha, Mangaljit Mukherji, Karma Dorjee, Anil Kumar, Gunjesh Ranjan, Prakash Kumarmangalam, Manoneet Dwivedi, Abhishek Kumar Gupta, Advs., Jayant Mohan & Shantanu Sagar, Aors for the Respondent.

Facts of the Case

In the instant case, the appellants were appointed by the respondent-State against sanctioned posts of Junior Engineers (Agriculture), with engagement being described from inception as contractual in nature. The terms and conditions governing engagement stipulated that appointment would be for an initial period of one year, extendable thereafter subject to satisfactory performance.

The Respondent-State accordingly granted extensions to the appellants from time to time until 2023, when it was expressly clarified that the extension granted would be the last. It was only towards the end of the year 2022 that respondents communicated that no further extension of the appellants’ engagement was likely to be granted.

It was noted that the abrupt discontinuance of such long-standing engagement solely based on contractual nomenclature, without either recording cogent reasons or passing a speaking order, was manifestly arbitrary and violative of Article 14 of the Constitution of India.

Further, the contractual stipulations purporting to bar claims for regularisation could not override constitutional guarantees.

Supreme Court Held

The Supreme Court held that the State, as a model employer, could not rely on contractual labels or the mechanical application of Umadevi (State of Karnataka v. Uma Devi (2006) 4 SCC 1) to justify prolonged ad hocism or to discard long-serving employees in a manner inconsistent with fairness, dignity, and constitutional governance.

In view of the foregoing discussion, the respondent-State was to forthwith regularise the services of all appellants against sanctioned posts to which they were initially appointed.

List of Cases Reviewed

  • Judgments passed by the High Court of Jharkhand at Ranchi in Bhola Nath v. The State Of Jharkhand [L.P.A No. 390 of 2024, dated 17-09-2024]
  • Uday Kant Yadav v.State of Jharkhand [LPA No 356 0f 2024, dated 15-10-2024]
  • Prakash Kumar v. State of Jharkhand [LPA No. 368 of 2024, dated 2-12-2024] [Para 15] set aside

List of Cases Referred to

  • Bhola Nath v. State of Jharkhand [LPA Nos. 390 of 2024, dated 17-9-2024] (para 3)
  • Uday Kant Yadav v. State of Jharkhand [LPA No. 356 of 2024, dated 15-10-2024] (para 3)
  • Prakash Kumar v. State of Jharkhand [LPA No. 368 of 2024, dated 2-12-2024] (para 3)
  • Secretary, State of Karnataka v. Umadevi 2006 taxmann.com 2495 (SC) (para 6.2)
  • Chandra Singh v. State of Rajasthan 2003 taxmann.com 4039 (SC) (para 9.2)
  • Basheshar Nath v. Comm. Income Tax 1958 SCC OnLine SC 7 (para 11.6)
  • Central Inland Water Transport Corpn. v. Brojo Nath Ganguly 1986 taxmann.com 1221 (SC) (para 12)
  • Pani Ram v. Union of India (2021) 19 SCC 234 (para 12.1)
  • Army Welfare Education Society v. Sunil Kumar Sharma (2024) 16 SCC 598 (para 13)
  • Jaggo v. Union of India 2024 SCC OnLine SC 3826 (para 13.6)
  • Vinod Kumar v. Union of India (2024) 9 SCC 327 (para 13.7)
  • Shripal v. Nagar Nigam [2025] 1 taxmann.com 9348 (SC) (para 13.7)
  • Dharam Singh v. State of U.P. [2025] 177 taxmann.com 556 (SC) (para 13.8).

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Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied