Supreme Court Reinstates Contractual Employee: K. Ragupathi vs. State of Uttar Pradesh (2022)

Date of the Judgment: May 12, 2022
Citation: K. Ragupathi vs. State of Uttar Pradesh (2022) INSC 489
Judges: L. Nageswara Rao, J. and B.R. Gavai, J.
Can a university terminate a contractual employee without following principles of natural justice, even if the appointment is termed contractual? The Supreme Court of India recently addressed this critical question in the case of K. Ragupathi vs. State of Uttar Pradesh. The Court ruled in favor of the employee, emphasizing that procedural fairness cannot be bypassed, even in contractual employment. The judgment, authored by Justice B.R. Gavai, highlights the importance of fair treatment for all employees, regardless of their employment status.

Case Background

K. Ragupathi, the appellant, applied for the position of Senior Scientific Officer at Gautam Buddha University, Greater Noida, Uttar Pradesh, in response to an advertisement. After a selection process, he was appointed on a contractual basis for two years, starting August 3, 2011. His service was extended for another year on August 7, 2013. However, on August 12, 2014, the University informed him that his contractual appointment had expired on August 11, 2014, and directed him to complete relieving formalities. Aggrieved by this, K. Ragupathi filed a writ petition at the High Court of Judicature at Allahabad, which was dismissed on May 23, 2018, leading to the present appeal before the Supreme Court.

Timeline

Course of Proceedings

The appellant, K. Ragupathi, initially challenged the termination of his services by filing a writ petition (Writ-A No. 51962 of 2014) at the High Court of Judicature at Allahabad. The High Court dismissed his petition on May 23, 2018, upholding the University’s decision to discontinue his services based on the expiry of his contractual term. This led to K. Ragupathi’s appeal before the Supreme Court of India.

Legal Framework

The case revolves around the interpretation of Section 29(1) of the Gautam Budh University Act, 2002, as amended by the Amendment Act of 2008. The amended Section 29(1) states:

“(1) Every employee in the first instance shall be appointed under a written contract, which shall be lodged by the University and the copy of which shall be furnished to the employee concerned.”

This amendment made it obligatory for the University to initially appoint employees only on a contractual basis. However, the University’s affidavit clarified that the selection process for these contractual appointments was the same as for regular appointments, with employees receiving similar benefits and allowances, except for permanency in tenure.

Arguments

Appellant’s Arguments:

• The appellant argued that his appointment was made after a due selection process, and therefore, his services could not be terminated without an enquiry.
• He contended that the communication of the University dated August 12, 2014, relieving him, was effectively a punitive termination and was done in a mala fide manner.

Respondent’s Arguments:

• The respondent argued that the appellant’s appointment was purely contractual, and he had no right to continue in service after the expiry of the contractual period.
• The respondent further submitted that the appellant was involved in activities detrimental to the University’s interest, justifying the non-continuation of his services.

The University also clarified that while appointments were technically contractual, the selection process and benefits were similar to those of regular employees. The University stated that it was in the process of finalizing guidelines for regularization, which were pending approval from the Board of Governors.

Innovativeness of the argument: The appellant innovatively argued that despite the contractual nature of his appointment, the process and benefits were similar to those of regular employees, thus entitling him to the principles of natural justice before termination.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the services of the appellant, who was appointed on a contractual basis, could be terminated without following the principles of natural justice, given that the selection process and benefits were similar to those of a regular employee?

Treatment of the Issue by the Court

Authorities

The Court considered the following:

• Section 29(1) of the Gautam Budh University Act, 2002: The amended provision mandates that every employee be initially appointed under a written contract. The court interpreted this provision in light of the University’s practice of conducting a selection process and providing benefits similar to regular employees.

The Court noted that the University’s affidavit itself stated that the selection process for contractual employees was the same as for regular employees and that they received similar benefits.

Judgment

How each authority was viewed by the Court?

• Section 29(1) of the Gautam Budh University Act, 2002: The Court interpreted the provision to mean that while initial appointments are contractual, the selection process and benefits are similar to regular employees, thus requiring adherence to natural justice principles.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that despite the contractual nature of the appellant’s employment, the selection process and benefits were akin to those of regular employees. The Court emphasized the importance of natural justice, holding that the termination, which was based on allegations, could not be done without following due process.

Logical Reasoning:

The Court rejected the argument that the contractual nature of the appointment allowed for termination without adherence to natural justice principles. The Court reasoned that since the termination was based on allegations, it was not a simple case of contract expiry. The Court also noted that the University itself treated contractual employees similarly to regular employees in terms of selection and benefits.

The Supreme Court stated, “It is thus clear that the appellant was appointed after he underwent the entire selection process. Even as per the University, though the appointment shows that it is on a contractual basis, for all the purposes, it is on a regular basis.” The Court further added, “Since even according to the said University, though the employment was contractual but the employee was entitled to get all the benefits of a regular employee, we find that in the facts of the present case, the appellant’s services could not have been terminated without following the principles of natural justice.” The Court also noted, “We therefore find that the present appeal deserves to be allowed on this short ground.”

There were no dissenting opinions. The bench consisted of two judges, both of whom agreed on the decision.

Key Takeaways

• Contractual employees, who undergo a selection process similar to regular employees and receive similar benefits, are entitled to the principles of natural justice before termination.
• Employers cannot terminate contractual employees based on allegations without conducting an enquiry, even if the contract has expired.
• This judgment emphasizes that the substance of employment conditions matters more than the nomenclature of the appointment.

Directions

The Supreme Court directed the reinstatement of the appellant, K. Ragupathi, with continuity of service. However, the Court clarified that he would not be entitled to any back wages.

Development of Law

The ratio decidendi of this case is that even if an employee is appointed on a contractual basis, if the selection process and benefits are similar to those of a regular employee, their services cannot be terminated without following the principles of natural justice, especially if the termination is based on allegations. This judgment clarifies that the substance of the employment relationship and the treatment of employees are critical, irrespective of the label of “contractual” employment.

Conclusion

The Supreme Court’s judgment in K. Ragupathi vs. State of Uttar Pradesh sets a significant precedent for the rights of contractual employees. It emphasizes that the principles of natural justice cannot be circumvented merely because an appointment is termed “contractual.” The Court’s decision to reinstate K. Ragupathi underscores the importance of fair treatment and due process for all employees, regardless of their employment status.