Recently, the Delhi High Court reaffirmed the limited rights available to contractual employees while dismissing a challenge brought by an Executive Assistant whose contractual extension was later withdrawn by the authorities. The case raised an important question on whether repeated renewals and a purported extension could create an enforceable right to continue in service beyond the contractual term. Examining the scope of contractual appointments and the validity of the extension granted under the applicable service regulations, the Court ultimately concluded that the appellant could not claim continuation in service after the expiry of his tenure.
Brief facts:
The case stemmed from a dispute over the continuation of contractual employment under Regulation 5(a) of the Delhi Electricity Regulatory Commission (Management & Development of Human Resources) Regulations, 2001. The Appellant, who had been serving on a contractual basis for several years with periodic renewals, was granted a further extension of tenure before the expiry of his existing contract. However, the extension was subsequently superseded, and he was relieved from service. Challenging the action, the Appellant approached the High Court, contending that the withdrawal of the extension was arbitrary and unlawful. After the writ petition was dismissed on the ground that the contractual engagement had come to an end by efflux of time and that the extension was not validly granted, the appellant preferred the present Letters Patent Appeal.
Contentions of the Appellant:
The Appellant contended that the case involved the arbitrary withdrawal of an extension already granted to him, rather than a mere non-renewal of a contractual engagement. He argued that the extension was rescinded without reasons or an opportunity of hearing and, relying on Mohinder Singh Gill v. Chief Election Commissioner, submitted that an administrative order cannot be justified through reasons introduced later in pleadings. He further maintained that Regulation 5(a) permitted extension based on performance appraisal, that his performance had been rated “Outstanding,” and that his long, uninterrupted service coupled with repeated renewals gave rise to a legitimate expectation of continuation and protection under Article 14, as recognised in Bhola Nath v. State of Jharkhand and Pawan Sharma v. Govt. of NCT Delhi.
Contentions of the Respondent:
The Respondents argued that the Appellant had no vested right to renewal or continuation of contractual service, which had come to an end by efflux of time upon expiry of the agreed tenure. The counsel contended that any extension under Regulation 5(a) of the DERC MDHR Regulations was discretionary and that the extension order had been issued prematurely, without the requisite performance appraisal, approval of the Chairperson, or compliance with the prescribed procedure. Consequently, no enforceable contract came into existence beyond the expiry of the contractual term, and no opportunity of hearing was required before issuance of the impugned office order.
Observation of the Court:
The Court held, “It is well settled that a contractual employee has no vested right to continue beyond the agreed tenure.” The Bench observed that the Appellant’s engagement was purely contractual in nature and that, upon expiry of the contractual term on 05.04.2024, the engagement automatically came to an end by efflux of time. It further noted that any continuation thereafter was dependent entirely upon a valid extension granted in accordance with the governing regulations.
Further, the Court observed, “The Order of Extension was issued without the requisite approval and, therefore, it did not culminate in an enforceable contract.” The Bench held that no enforceable contract ever came into existence for the period from 06.04.2024 to 05.04.2027, since no agreement governing the said period was executed. It also noted that the extension had been granted by a Single Member in the absence of the Chairperson and without compliance with the procedure prescribed under Regulation 5(a) of the DERC MDHR Regulations.
Moreover, the Court noted, “Regulation 5(a) of the DERC MDHR Regulations does not contemplate renewal of a contract without a performance appraisal undertaken at the point of renewal.” The Bench observed that the appellant had sought extension nearly ten months before the expiry of his existing tenure and that the extension order itself was issued approximately nine months before the contract was due to end. It therefore held that such advance renewal was contrary to the statutory procedure governing contractual extensions.
Finally, the Court held, “In the absence of compliance with the mandatory requirements of Regulation 5(a) of the DERC MDHR Regulations, there was no valid extension of contract accrued in favour of the Appellant.” The Bench further observed that the impugned office order merely communicated the legal consequence of expiry of the contractual tenure and did not amount to termination of a subsisting contract. Consequently, it held that neither the furnishing of reasons nor the grant of an opportunity of hearing was required when the contractual engagement had already come to an end by efflux of time.
The decision of the Court:
The Court dismissed the Letters Patent Appeal and affirmed the judgment of the learned Single Judge. The Court concluded that the appellant had no enforceable right to continuation in service after the expiry of his contractual engagement and that the impugned office order warranted no interference.
Case Title: Sanjay Kumar Singh Vs. The Principal Secretary to LG and Ors.
Case No.: LPA 99/2026
Coram: Hon'ble Chief Justice Devendra Kumar Upadhyaya, Hon'ble Justice Tejas Karia
Advocate for the Petitioner: Adv. Aarushi Tiku
Advocate for the Respondent: Adv. Avnish Ahlawat, Adv. Nitesh Kumar Singh, Adv. Aliza Alam, Adv. Mohnish Sehrawat
Read Judgment @Latestlaws.com
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