26.02.2026 vs Bhupinder Singh Mehta & Ors on 17 March, 2026

Himachal Pradesh High Court

Reserved On : 26.02.2026 vs Bhupinder Singh Mehta & Ors on 17 March, 2026

                                                                                                   2026:HHC:7508 )



        IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

                                                                            LPA No.841 of 2025
                                                                            Reserved on : 26.02.2026
                                                                            Decided on : _17.03.2026




                                                                                                   .

    State of HP and Others                                                                    ...Petitioners.

                                                           Versus





    Bhupinder Singh Mehta & Ors.                                                              ...Respondents.
    Coram
    Hon'ble Mr. Gurmeet Singh Sandhawalia, Chief Justice.




                                                                   of
    Hon'ble Mr. Justice Bipin Chander Negi, Judge.

    Whether approved for reporting?1

    For the petitioners
                              rt      :             Mr. Pranay Pratap
                                                    Advocate General.
                                                                                               Singh,    Additional

    For the respondent(s) :                         M/s. Onkar Jairath, Anshul Jairath and
                                                    Piyush Mehta, Advocates.

    Bipin Chander Negi, Judge

The present appeal has been preferred against the

impugned order dated 18.03.2025, passed by the learned

Single Judge in CWPOA No.2979 of 2020, titled Bhupinder

Singh Mehta and Ors. Vs. State of Himachal Pradesh and

Others, whereby the learned Single Judge has directed the

present appellants to regularize the services of the present

respondents, in terms of communication/instructions

pertaining to regularization of contractual appointees issued

by the Personnel Department of the Government of Himachal

Pradesh, dated 04.05.2017 (Annexure A-VI in CWPOA

1
Whether the reporters of the local papers may be allowed to see the Judgment? Yes

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No.2979 of 2020) on completion of 3 years from the date of

their respective contractual engagements by appellant No.3.

.

Further the respondents herein have been held entitled to all

consequential benefits from the date of regularization of the

respective services as they had approached the Court in the

year 2017 itself.

of

2. Admittedly, in the case at hand, the present

respondents had
rt been initially appointed as Computer

Operators on a contract basis with effect from 01.03.2004

(Respondents No.1 and 3) and 08.03.2004 (Respondent No.2)

till 30.06.2012. The aforesaid appointments had been made

under the Upper Satluj Valley Watershed Development Society

(USVWDS) Rampur (for short “Society”), constituted vide

notification dated 23.10.2002 (page 140 of the paper book).

3. The “Society” had been created for implementation

of the catchment area treatment plans of all hydel projects

coming up or in existence in the Satluj Valley basin. Its staffing

pattern was determined in the first governing body meeting

held on 18.12.2002 (page 174 of the paper book). Therein

need for adequate staff was determined keeping in view the

fact that every hydel project above 10MW requires a

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catchment area treatment plan and besides the existing hydel

projects many hydel projects were under investigation and

.

formulation in the Satluj Valley basin. Amongst other posts,

six posts of computer operators were approved to be filled in

on a contractual basis as catchment area treatment plans of

all hydel projects were to be implemented in a time bound

of
manner.

4. The present respondents had been selected as
rt
computer operators post their names being sponsored by the

employment exchange and after an interview for the said post.

The name of the “Society” was changed to Satluj Valley

Watershed Development Society on 18.12.2008. The

aforesaid Society was closed vide notification dated

05.05.2012 with effect from 30.06.2012.

5. Before closure of the society the conservator of

forest Rampur circle vide letter dated 30.05.2012 had

requested for the accommodation of the computer operators

engaged in the society in his office as work of the society after

its closure was to be looked after by his office and payment to

the computer operators was sought to be made from

Compensatory Afforestation Fund Management and Planning

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Authority (for short, “CAMPA”) (page 183 of the paper book).

On account of closure of the aforesaid Society, services of the

.

present respondents had been terminated with effect from

30.06.2012.

6. Previously vide CWP No.8534 of 2011, the present

respondents had approached this Court, seeking the following

of
reliefs:-

rt
“i) That the respondents may kindly be directed to
grant the salary at par with the HP Electronic

Corporation i.e. Rs.13,500/- instead of Rs.7,810/- per
month w.e.f. 01.12.2009 with all consequential
benefits.

ii) That respondents may kindly be directed to absorb
the petitioners in the forest department, as is done in
the case of Sh. Devinder Chauhan.”

7. Since a writ of mandamus was being sought in CWP

No.8534 of 2011, therefore, the Court had directed the

present respondents to approach the authorities concerned for

redressal of their grievances. Therefore, the aforesaid writ

petition bearing No.8534 of 2011 was disposed of, vide order

dated 22.11.2011. Subsequent thereto the respondents had

approached the authorities, vide order dated 29.02.2012

(page 129 of the paper book) the authority concerned had

rejected the claim of regularization made by the present

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respondents.

8. The reason for rejection being that the respondents had

.

been engaged on contract basis in a Society and in terms of

rules/bye laws of the Society, the services of the respondents

could not be regularized as Computer Operators in the Forest

Department of Himachal Pradesh. Other than the aforesaid, in

of
the rejection order it was categorically stated that there exist

no sanctioned/created post of Computer Operators in the
rt
Forest Department of Himachal Pradesh.

9. Subsequent to the aforesaid, the present

respondents had been re-engaged under the Himachal

Pradesh “CAMPA” on contract basis with effect from

05.02.2013. The contract in this respect had been entered

into between the present respondents and appellant No.3. On

04.05.2017, instructions were issued by the Additional Chief

Secretary (Personnel) to the Government of Himachal Pradesh

qua regularization of contractual employees (page 125 of the

paper book).

10. Immediately thereafter on 25.05.2017 a case of

regularization of the present respondents was forwarded by

the Principal Chief Conservator of Forest (Hoff) HP to the

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Additional Chief Secretary (Forest) (page 121 of the paper

book) on the grounds that the names of the respondents had

.

been sponsored by the employment exchange wherein after

they had been selected through an interview by the society

concerned and they have rendered almost 14 years of service.

11. On 23.06.2017, the Additional Chief Secretary

of
(Forests) informed the Principal Chief Conservator of Forest

(Hoff) Himachal Pradesh that the matter of regularization of
rt
the respondents had been examined in consultation with the

Finance Department who had advised that the respondents be

permitted to continue where they are working (page 131 of

the paper book). The said case was rejected by the Additional

Chief Secretary Forest on 5.09.2017 (page 124 of the paper

book) on the ground that the respondents are employees of a

Society engaged in CAT plan/CAMPA under CCF Rampur,

hence not eligible for regularization in Government

Departments.

12. It is in the aforesaid backdrop that the present

respondents had invoked the jurisdiction of the Erstwhile State

Administrative Tribunal, seeking regularization of their

services. On the closure of the State Administrative Tribunal,

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the Original Application filed by the respondents was

transferred to this Court and was registered as CWPOA

.

No.2979 of 2020.

13. The case of the present respondents was

vehemently opposed by the present appellants. In the reply

filed, it was categorically stated that the present respondents

of
are employees of a Society and hence, are not eligible for

regularization in the Forest Department.

rt

14. Learned Single Judge after assessing the nature of

the services of the present respondents, the fact that the

services had been utilized by the appellants for about last 22

years, further the fact that the Society/CAMPA was nothing

but an extended wing of the Government and keeping in view

the legitimate expectation of the present respondents held

that the present respondents in terms of

communication/instructions pertaining to regularization of

contractual appointees issued by the personnel department of

the Government of Himachal Pradesh dated 04.05.2017

(Annexure A-VI in CWPOA No.2979 of 2020), on completion

of three years from the date of contractual engagement by the

present appellants, were entitled to regularization.

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15. The first and foremost contention raised on behalf

of the appellants is that the respondents are employees of

.

Society/CAMPA and are hence, not entitled for regularization

in the Forest Department. In the factual and legal matrix

narrated herein below the said contention needs to be

rejected.

of

16. For an effective implementation of the Catchment

Area Treatment Plans (for short, “CAT Plans”) of all Hydro
rt
Electric Projects in the Satluj Basin in public interest a

“Society” was constituted vide Notification dated 23.10.2002.

Eight CAT Plans were being implemented in the jurisdiction of

the Rampur Circle. Out of a total capital outlay of Rs.132

crores in the aforesaid eight CAT Plans Rs.63 crores had been

utilized upto 31.03.2012, during the last 10 years. Besides the

eight CAT Plans which were being implemented by the Rampur

Circle six CAT Plans were in the pipeline which in the near

future would also be executed by the same Circle. The

aforesaid facts are evident from the letter dated 17.05.2012

addressed by the DFO CAT plan Nichar at Rampur to the

secretary of the Society Rampur (page 119/120 of the paper

book). Vide notification dated 05.05.2012 (page 118 of the

paper book), the said Society was ordered to cease functioning

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latest by 30.06.2012.

17. From a perusal of the Notification dated

.

05.05.2012, it is evident that the Conservator of Forest

Rampur was to be the “Successor” of the Society. Subsequent

to 30.06.2012, in terms of the aforesaid notification dated

05.05.2012, the CAT Plans and Compensatory Afforestation of

of
all Hydro Electric Projects in Satluj River Basin were to be

implemented through the concerned Conservator of Forests.

rt

18. In the aforesaid Society, the present respondents

had been engaged as Computer Operators in the month of

March, 2004. From letter dated 17.05.2012 (page 119 of the

paper book) addressed by the DFO CAT Plan Nichar at Rampur

to Member Secretary of the Society, it is evident that

Computer Operators i.e. present respondents were engaged

in the preparation of computerized forms, progress reports of

CAT Plan activities (monthly, quarterly and annual),

preparation of accounts, summary of funds utilized,

preparation/compilation of APO’s of CAT Plan, reconciliation of

progress of funds with Project Officers of the Society,

preparation of balance sheet, documentation of works

executed and other office routine works assigned by the

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concerned project officer. On account of the closure of the

aforesaid project, the services of the respondents had been

.

terminated.

19. From letter dated 17.05.2012 (page 119 of the

paper book), addressed by the DFO CAT Plan, it is evident that

the work being carried out by the present respondents on

of
closure of the Society was now required to be performed by

the existing staff posted in the Rampur Forest Circle and
rt
Division. In the letter it has been highlighted that there is an

acute shortage of staff in the Rampur Circle. Besides the

aforesaid, in the letter it has further been highlighted that

there is a provision to engage contractual staff under ongoing

various CAT Plans and for the same funds to the tune of almost

Rs.69 crores were lying unutilized which can be utilized to

engage staff of the erstwhile Society in CAMPA.

20. Besides the aforesaid in the letter it has been

mentioned that the Computer Operators i.e. present

respondents have an experience of about 8 years, during the

period they were engaged on contract basis where they were

looking after CAT Plan work at project level in the Society.

Their conduct while working in the society had remained

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satisfactory.

21. It is in the aforesaid backdrop that the respondents

.

had been once again engaged on contractual basis by the

present appellant No.3 i.e. the Chief Conservator of Forest.

The engagement of the present respondents had been done in

terms of Agreement dated 06.02.2013 (page 108 of the paper

of
book). In the contract so entered, it had been categorically

mentioned that
rt the respondents shall remain in the

deployment of CAMPA in the office of the Chief Conservator

HP and State CAMPA was stated to be a separate legal entity

(autonomous body). The appointment in terms of the contract

was stated to be non-Governmental, which was not to

continue after the expiry of the contract period. Emoluments

to the respondents were to be paid by the DFO(Hqrs).

22. Vide notification dated 23.4.2004, issued by MoEF,

in exercise of the powers conferred by sub-section (3) of

Section 3 of the Environment Protection Act an authority

known as “CAMPA” for the purpose of management of money

towards compensatory afforestation, NPV and any other

money recoverable in pursuance of the apex Court’s orders

and in compliance with the conditions stipulated by the Central

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Government while according approval under the FC Act for

non-forestry uses of the forest land was constituted.(See T.N.

.

Godavarman Thirumulpad (87) v. Union of India,

(2006) 1 SCC 1, at page 16). The jurisdiction of CAMPA so

notified is throughout India. (See T.N. Godavarman

Thirumulpad v. Union of India, (2014) 6 SCC 150, at

of
page 159).

23. On 2.4.2009 MoEF has issued “the Guidelines of
rt
State Compensatory Afforestation Fund Management and

Planning Authority (State CAMPA)”. The State CAMPA has

been set up as an instrument to accelerate activities for

preservation of natural forests, management of wildlife,

infrastructure development in the sector and other allied

works. (See T.N. Godavarman Thirumulpad v. Union of

India, (2014) 6 SCC 150, at page 162).

24. By order dated 10.7.2009 (2009) 16 SCC 481 the

apex Court directed that the guidelines and structure of the

State CAMPA as prepared by MoEF may be notified and

implemented. The State CAMPA has been constituted for each

State/Union Territory. It has a three-tier structure. The

Executive Committee functions under the chairmanship of the

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Principal Chief Conservator of Forests and is responsible for

the Annual Plan of Operation (APO) for various works planned

.

to be undertaken during each year. The Steering Committee

under the chairmanship of the Chief Secretary is responsible

for approving the APO for each year. The Chief Minister is the

Chairman of the governing body which is responsible for

of
overall guidance and policy issues. (See T.N. Godavarman

Thirumulpad v. Union of India, (2014) 6 SCC 150, at

page 162).

rt

25. Statutory recognition to the State Compensatory

Afforestation Fund and Management and Planning Authority

was given under the Compensatory Afforestation Fund Act,

2016, which came into effect on 30.09.2018 (herein after for

purpose of brevity referred to as the act). The State Authority

so constituted was to consist of a governing body, a Steering

Committee and an Executive Committee. For the purpose of

present appeal, we are concerned with Section 11(5) of the

Act, which deals with the creation of posts in the State

Authority. The same reads as follows:-

11. Steering committee and executive

committee of State Authority.

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(5) The governing body of the State Authority may

with the prior concurrence of the State Government

create posts in the State Authority at the level of

.

Assistant Conservator of Forests and other officials to

assist the steering committee and executive

committee in performance of its functions under the

Act.

of

26. In this respect, it would be appropriate to refer to

relevant rules framed under the Act i.e. Rules 10,b12 and 13
rt
of the Compensatory Afforestation Fund Rules, 2018, (herein

after for purpose of brevity referred to as the rules) whereby

pay and allowances of officials appointed on deputation or

contract basis under Section 11(5) of the Act have been

provided for. The same are reproduced herein below:-

10. Appointment of Officers of State

Authority:- The officers referred to in sub-Section

(4) and sub-Section (5) of Section 11 shall be

appointed on deputation basis by the State

Government.

12. Pay and Allowances of officials:- The

officials referred to in sub-Section (5) of Section 9 and

sub-Section (5) of Section 11 and appointed on

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deputation basis shall be entitled to such pay and

allowances as are admissible to the equivalent

officials of the central government of Group “B” or

.

Group “C”, as the case may be.

13. Pay and Allowances of officials appointed

on Contract Basis:- The officials referred to in sub-

Section (5) of Section 9 and sub-Section (5) of

of
Section 11 and appointed on contract basis shall be

entitled to such pay and allowances as are specified
rt
in their contract.

27. Hence, after the promulgation of the

Compensatory Afforestation Fund Act, 2016, since 30.09.2018

the governing body of the State CAMPA may with the prior

concurrence of the State Government create posts in the State

Authority. As per the rules framed under the act the officers

referred to in sub-Section (4) and sub-Section (5) of Section

11 are to be filled in on deputation. In terms of the rules

framed officials appointed on deputation basis are held

entitled to such pay and allowances as are admissible to the

equivalent officials of the central government. Insofar as

officials appointed on a contract basis are concerned rules do

not expressly provide for such a parity, however keeping in

view principles of equality, fairness and equity similar parity

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cannot be denied to officials appointed on a contract basis. In

posts created for other officials under sub-Section (5) of

.

Section 11 of the act there is no express or implied bar to

Regular recruitment.

28. The nature of the work performed by the

respondents is neither temporary nor occasional. Rather the

of
recurring nature of duties reflects the nature of the work

performed by the respondents was perennial and fundamental
rt
to the functioning of the CAMPA. In the aforesaid backdrop a

fair and humane resolution becomes paramount when tasks

inherently required to be performed on a regular basis for a

prolonged, continuous period are performed as have been

done in the case at hand by unblemished service. Absence of

regular posts would be of no consequence. Moreover, refusing

regularization would be contrary to principles of fairness and

equity. In this respect it would be appropriate to refer to the

authoritative pronouncement of the apex court in Jaggo

Versus Union of India and Others, 2024 INSC

1034(SLP(C) No.5580 of 2024). The relevant extract

thereof reads as under:-

“13. The claim by the respondents that these were not

regular posts lacks merit, as the nature of the work

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performed by the appellants was perennial and

fundamental to the functioning of the offices. The

recurring nature of these duties necessitates their

.

classification as regular posts, irrespective of how

their initial engagements were labelled. It is also

noteworthy that subsequent outsourcing of these

same tasks to private agencies after the appellants’

of
termination demonstrates the inherent need for these

services. This act of outsourcing, which effectively
rt
replaced one set of workers with another, further

underscores that the work in question was neither

temporary nor occasional.

20. It is well established that the decision in Uma Devi

(supra) does not intend to penalize employees who

have rendered long years of service fulfilling ongoing

and necessary functions of the State or its

instrumentalities. The said judgment sought to

prevent backdoor entries and illegal appointments

that circumvent constitutional requirements.

However, where appointments were not illegal but

possibly “irregular,” and where employees had served

continuously against the backdrop of sanctioned

functions for a considerable period, the need for a fair

and humane resolution becomes paramount.

Prolonged, continuous, and unblemished service

performing tasks inherently required on a regular

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basis can, over the time, transform what was initially

ad-hoc or temporary into a scenario demanding fair

regularization. In a recent judgement of this Court in

.

Vinod Kumar and Ors. Etc. Vs. Union of India & Ors,

it was held that held that procedural formalities

cannot be used to deny regularization of service to an

employee whose appointment was termed

of
“temporary” but has performed the same duties as

performed by the regular employee over a
rt
considerable period in the capacity of the regular

employee. The relevant paras of this judgement have

been reproduced below:

“6. The application of the judgment in Uma

Devi (supra) by the High Court does not fit
squarely with the facts at hand, given the
specific circumstances under which the

appellants were employed and have continued

their service. The reliance on procedural
formalities at the outset cannot be used to
perpetually deny substantive rights that have

accrued over a considerable period through
continuous service. Their promotion was based
on a specific notification for vacancies and a
subsequent circular, followed by a selection
process involving written tests and interviews,
which distinguishes their case from the
appointments through back door entry as
discussed in the case of Uma Devi (supra). 7.
The judgement in the case Uma Devi (supra)
also distinguished between “irregular” and

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“illegal” appointments underscoring the
importance of considering certain
appointments even if were not made strictly in

.

accordance with the prescribed Rules and

Procedure, cannot be said to have been made
illegally if they had followed the procedures of
regular appointments such as conduct of

written examinations or interviews as in the
present case…”

of

21. The High Court placed undue emphasis on the

initial label of the appellants’ engagements and the
rt
outsourcing decision taken after their dismissal.

Courts must look beyond the surface labels and

consider the realities of employment: continuous,

long-term service, indispensable duties, and absence

of any mala fide or illegalities in their appointments.

In that light, refusing regularization simply because

their original terms did not explicitly state so, or

because an outsourcing policy was belatedly

introduced, would be contrary to principles of fairness

and equity.

26. While the judgment in Uma Devi (supra) sought

to curtail the practice of backdoor entries and ensure

appointments adhered to constitutional principles, it

is regrettable that its principles are often

misinterpreted or misapplied to deny legitimate

claims of long serving employees. This judgment

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aimed to distinguish between “illegal” and “irregular”

appointments. It categorically held that employees in

irregular appointments, who were engaged in duly

.

sanctioned posts and had served continuously for

more than ten years, should be considered for

regularization as a one-time measure. However, the

laudable intent of the judgment is being subverted

of
when institutions rely on its dicta to indiscriminately

reject the claims of employees, even in cases where
rt
their appointments are not illegal, but merely lack

adherence to procedural formalities. Government

departments often cite the judgment in Uma Devi

(supra) to argue that no vested right to regularization

exists for temporary employees, overlooking the

judgment’s explicit acknowledgment of cases where

regularization is appropriate. This selective

application distorts the judgment’s spirit and purpose,

effectively weaponizing it against employees who

have rendered indispensable services over decades.”

29. The duties being performed by the respondents in

the case at hand are integral to the day-to-day functioning of

the organization. The practice adopted by appellants of

engaging the respondents under the nominal labels of

“contractual” in perpetuity and thereby exploiting them by not

regularizing their positions is highly deprecable. Government

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departments are expected to lead by example in ensuring fair

and stable employment. In the case at hand the appellants

.

have continued for years the exploitative engagement without

undertaking regular recruitment. The culture of ad-hocism

being perpetrated by the appellants is also highly deprecable.

The Apex Court on several occasions has deprecated the

of
practice of engaging employees under the nominal labels of

“contractual” or “temporary” and has cautioned against a
rt
mechanical and blind reliance on Umadevi, and has strongly

deprecated the culture of ad-hocism. In this respect reference

can be made to the apex court judgement in Bhola Nath

Versus State of Jharkhand and Others, 2026 INSC 99

(SLP(C) No.30762 of 2024). The relevant extract reads as

under:-

13……………

13.6. This Court has, on several occasions,
deprecated the practice adopted by States of
engaging employees under the nominal labels of
“part-time”, “contractual” or “temporary” in
perpetuity and thereby exploiting them by not
regularizing their positions. In Jaggo v. Union of
India, this Court underscored that government
departments must lead by example in ensuring fair
and stable employment, and evolved the test of
examining whether the duties performed by such

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temporary employees are integral to the day-to-day
functioning of the organization.

13.7. In Shripal v. Nagar Nigam, and Vinod

.

Kumar v. Union of India, this Court cautioned

against a mechanical and blind reliance on Umadevi
(supra) to deny regularization to temporary

employees in the absence of statutory rules. It was
held that Umadevi (supra) cannot be employed as a
shield to legitimise exploitative engagements

of
continued for years without undertaking regular
recruitment. The Court further clarified that Umadevi
itself draws a distinction between appointments that
rt
are “illegal” and those that are merely “irregular”, the
latter being amenable to regularization upon

fulfilment of the prescribed conditions.

13.8. In Dharam Singh v. State of U.P., this Court
strongly deprecated the culture of “ad-hocism”

adopted by States in their capacity as employers. The
Court criticised the practice of outsourcing or

informalizing recruitment as a means to evade regular
employment obligations, observing that such

measures perpetuate precarious working conditions
while circumventing fair and lawful engagement

practices.

13.9. The State must remain conscious that part-time
employees, such as the appellants, constitute an
integral part of the edifice upon which the machinery
of the State continues to function. They are not
merely ancillary to the system, but form essential
components thereof. The equality mandate of our
Constitution, therefore, requires that their service be
reciprocated in a manner free from arbitrariness,
ensuring that decisions of the State affecting the

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careers and livelihood of such part-time and
contractual employees are guided by fairness and
reason.

.

30. The aforesaid contract, has been entered into

between parties in the case at hand who are not equal in

bargaining power. The inequality of bargaining power in the

of
case at hand is the result of the great disparity in the economic

strength of the contracting parties. The respondents in the
rt
case at hand have no choice, or rather no meaningful choice,

but to give their assent to the contract no matter however

unfair, unreasonable and unconscionable the clauses in the

contract may be. In the said backdrop to secure social,

economic justice and in order to conform to the mandate of

the equality clause in Article 14 courts will not enforce and

will, when called upon to do so, strike down an unfair and

unreasonable contract, or an unfair and unreasonable clause

in a contract, entered into between parties who are not equal

in bargaining power. In the facts of the present case in view

of the aforementioned it can safely be said that the mighty

State (present appellants) and ordinary computer operators

(present respondents), who are seeking regularisation, have

an un-equal bargaining power. We are, therefore, of the

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considered view that the reliance placed on the terms of

Agreement dated 06.02.2013 (page 108 of the paper book)

.

would be of no assistance to the case of the appellants. In this

respect, reference can be made to Bhola Nath Versus State

of Jharkhand and Others, 2026 INSC 99 (SLP(C)

No.30762 of 2024). The relevant extract reads as follows:-

of
Unconscionable Agreements- Contract between
Lion and Lamb:

12. In Central Inland Water Transport Corpn. v. Brojo
rt
Nath Ganguly, this Court acknowledged the increasing

imbalance in the bargaining power of contracting parties.

The Court held thus: –

“89. . . . We have a Constitution for our country. Our

judges are bound by their oath to “uphold the
Constitution and the laws”. The Constitution was
enacted to secure to all the citizens of this country

social and economic justice. Article 14 of the

Constitution guarantees to all persons equality
before the law and the equal protection of the
laws. The principle deducible from the above

discussions on this part of the case is in
consonance with right and reason, intended to
secure social and economic justice and
conforms to the mandate of the great equality
clause in Article 14. This principle is that the
courts will not enforce and will, when called
upon to do so, strike down an unfair and
unreasonable contract, or an unfair and
unreasonable clause in a contract, entered into
between parties who are not equal in bargaining

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-25-

power. It is difficult to give an exhaustive list of
all bargains of this type. No court can visualize
the different situations which can arise in the

.

affairs of men. One can only attempt to give

some illustrations. For instance, the above
principle will apply where the inequality of
bargaining power is the result of the great

disparity in the economic strength of the
contracting parties. It will apply where the

of
inequality is the result of circumstances,
whether of the creation of the parties or not. It
will apply to situations in which the weaker
rt
party is in a position in which he can obtain
goods or services or means of livelihood only

upon the terms imposed by the stronger party
or go without them. It will also apply where a
man has no choice, or rather no meaningful
choice, but to give his assent to a contract or to

sign on the dotted line in a prescribed or
standard form or to accept a set of rules as part

of the contract, however unfair, unreasonable
and unconscionable a clause in that contract or

form or rules may be. This principle, however, will
not apply where the bargaining power of the

contracting parties is equal or almost equal. This
principle may not apply where both parties are
businessmen and the contract is a commercial
transaction. In today’s complex world of giant
corporations with their vast infrastructural
organizations and with the State through its
instrumentalities and agencies entering into almost
every branch of industry and commerce, there can be
myriad situations which result in unfair and
unreasonable bargains between parties possessing

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-26-

wholly disproportionate and unequal bargaining
power. These cases can neither be enumerated nor
fully illustrated. The court must judge each case on its

.

own facts and circumstances.” (emphasis laid)

Therefore, the Court has held that the Constitution
obliges courts to advance social and economic justice and to

give effect to the equality mandate under Article 14.
Consequently, courts will neither enforce nor hesitate to
invalidate contracts, or contractual clauses, that are unfair

of
or unreasonable when entered into between parties with
unequal bargaining power.

rt
12.1. Relying on the aforesaid reasoning, another two Judge
Bench in Pani Ram v. Union of India, reiterated that the

guarantee of equality under Article 14 extends even to
situations where a person has no meaningful choice but to
accept imposed contractual terms, however unfair or
unreasonable they may be. Applying this principle to the

facts before it, the Court observed thus: –

“23. As held by this Court, a right to equality

guaranteed under Article 14 of the Constitution

of India would also apply to a man who has no
choice or rather no meaningful choice, but to
give his assent to a contract or to sign on the

dotted line in a prescribed or standard form or
to accept a set of rules as part of the contract,
however unfair, unreasonable and
unconscionable a clause in that contract or form
or rules may be. We find that the said observations
rightly apply to the facts of the present case. Can it
be said that the mighty Union of India and an ordinary
soldier, who having fought for the country and retired
from Regular Army, seeking re-employment in the
Territorial Army, have an equal bargaining power. We

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are therefore of the considered view that the reliance
placed on the said document would also be of no
assistance to the case of the respondents.”

.

(emphasis laid)

Therefore, it is clear that Courts are empowered to
invalidate unconscionable elements of a contract where the

parties lack the ability to exercise any real or meaningful
choice in negotiating its terms. In the present case, the
appellants were left with no alternative but to accept the

of
conditions unilaterally prescribed by the respondent-State in
order to secure their livelihood and sustain a source of
income. It would be entirely unrealistic to assume that, in
rt
such circumstances, an employee seeking temporary
employment could meaningfully negotiate or assert a

position against the overwhelming might of the State
machinery.

12.2. At this juncture, the analogy of apples and oranges

serves as a useful reminder that certain relationships are
inherently incapable of being assessed on an equal plane. A

contract between the State and an employee stands on a
similar footing. The State, in such a relationship, assumes

the role of a metaphorical lion, endowed with overwhelming
authority, resources and bargaining strength, whereas the

employee, who is yet an aspirant, is reduced to the position
of a metaphorical lamb, possessing little real negotiating
power. To suggest parity between the two, i.e. the lion and
the lamb, would be to ignore the stark imbalance that
defines the relationship.

12.3. Therefore, where a lion contracts with a lamb, the
inequality is not incidental but structural, and it is precisely
this disproportion that calls for judicial sensitivity. In such
situations, the conscience of Constitutional Courts must
inevitably tilt in favour of protecting the lamb. We have no

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-28-

hesitation in holding that Constitutional Courts are duty-
bound to act to safeguard those who are vulnerable to
exploitation, so that employees are not compelled to meekly

.

submit to the demands of a vastly dominant contracting

party like the State, but are instead assured that
constitutional protections will intervene to prevent such
exploitation.

of

31. To buttress the appellants first submission, reliance

has been placed on T.M. Sampath v. Ministry of Water
rt
Resources, (2015) 5 SCC 333 .

The appellants therein before the apex court were
employees of National Water Development Agency
(“NWDA”) which was established as a society in July 1982
and was registered under the Societies Registration Act,

1860. The Society NWDA, fell under the aegis and control,
both administrative and financial, of the Ministry of Water

Resources, was fully funded by the Government of India,
headed by the Union Minister for Water Resources as the

President. NWDA had framed rules and regulations for its
smooth functioning.

The Governing Body of NWDA in its 3rd meeting held on 31-
3-1983 had approved introduction of Contributory Provident
Fund Scheme for the employees of NWDA on the lines of the
Contributory Provident Fund Rules (India), 1962. NWDA did
not make any distinct CPF rules. The same were duly
approved by the Governing Body of NWDA.

Pursuant to the recommendation of the Fourth Central Pay
Commission, an Office Memorandum dated 1-5-1987 was
issued by the Ministry of Personnel, Public Grievances and

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-29-

Pensions, Department of Pensions and Pensioners’ Welfare,
for switch-over of employees from Contributory Provident
Fund Scheme to Pension Scheme, according to which all

.

Contributory Provident Fund (CPF) Scheme beneficiaries,

who were in service of the Central Government on 1-1-1986,
were deemed to have come over to the Pension Scheme
unless they specifically opted out to continue under CPF

Scheme. This Pension Scheme was formulated by the
Government under the 1972 Pension Rules. The above

of
switch-over was applicable to all the Central Government
employees who were subscribing to the Contributory
Provident Fund under the Contributory Provident Fund
rt
Rules, 1962.

The Governing Body of NWDA rejected the proposal for

introduction of Pension-cum-GPF-DCRG Scheme in NWDA.
The said rejection by the Governing Body, was assailed. The
petitioners’ before the apex court raised a specific contention

that their fundamental rights under Articles 14 and 16 had
been violated by not treating them on a par with their similar
counterparts in the Central Government, when NWDA falls

within the meaning of “State” as defined in Article 12 of the

Constitution. The said contention was rejected by holding
that NWDA is an autonomous body which has framed its own
bye-laws for governing its employees and it has been time

and again reiterated by the apex court that courts must
adopt an attitude of total non-interference or minimal
interference in the matter of interpretation of rules framed
by autonomous institutions. Further it was held that NWDA
cannot be treated as an instrumentality of the State under
Article 12. Besides the aforesaid even if it is presumed that
NWDA is “State” under Article 12 of the Constitution, the
apex court was of the view that the appellants therein have
failed to prove that they are on a par with their counterparts,
with whom they claim parity. The relevant extract of the

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-30-

judgement reads as follows;

15. In light of the facts and circumstances of this case and
the submissions made by the learned counsel on both sides,

.

it can be concluded that NWDA had framed its regulation:

the CPF Rules, 1982 and they were duly approved by the
Governing Body of NWDA. As NWDA is an autonomous body

under the Ministry of Water Resources, it has framed its own
bye-laws governing the employees. It has been time and
again reiterated that the court must adopt an attitude of

of
total non-interference or minimal interference in the matter
of interpretation of rules framed by autonomous institutions.
In Kerala SRTC v. K.O. Varghese (2007) 8 SCC 231, this
rt
Court held: (SCC pp. 240-41, paras 18 & 21)

“18. … KSRTC is an autonomous corporation established
under the Road Transport Corporations Act, 1950. It can
regulate the services of its employees by making appropriate
regulations in that behalf.

* * *

21. The High Court … is not correct in thinking that there is
any compulsion on KSRTC on the mere adoption of Part III

of KSR to automatically give all enhancements in pension
and other benefits given by the State Government to its

employees.”

Thus, as the appellants are governed by the CPF Rules,
1982, the OM applicable to the Central Government
employees is not applicable to them.

16. On the issue of parity between the employees of NWDA
and Central Government employees, even if it is assumed
that the 1982 Rules did not exist or were not applicable on
the date of the OM i.e. 1-5-1987, the relevant date of parity,
the principle of parity cannot be applicable to the employees

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-31-

of NWDA. NWDA cannot be treated as an instrumentality of
the State under Article 12 of the Constitution merely on the
basis that its funds are granted by the Central Government.

.

In Zee Telefilms Ltd. v. Union of India (2005) 4 SCC 649, it

was held by this Court that the autonomous bodies having
some nexus with the Government by itself would not bring
them within the sweep of the expression “State” and each

case must be determined on its own merits. Thus, the plea
of the employees of NWDA to be treated on a par with their

of
counterparts in the Central Government under sub-rule
(6)(iv) of Rule 209 of the General Financial Rules, merely on
the basis of funding is not applicable.

rt

17. Even if it is presumed that NWDA is “State” under Article
12 of the Constitution, the appellants have failed to prove

that they are on a par with their counterparts, with whom
they claim parity. As held by this Court in UT, Chandigarh v.
Krishan Bhandari(1996) 11 SCC 348, the claim to equality

can be claimed when there is discrimination by the State
between two persons who are similarly situated. The said
discrimination cannot be invoked in cases where

discrimination sought to be shown is between acts of two

different authorities functioning as State under Article 12.
Thus, the employees of NWDA cannot be said to be “Central
Government employees” as stated in the OM for its

applicability.

18. Thus, by reason that the employees are governed by the
NWDA CPF Rules, 1982, the OM dated 1-5-1987 is not
applicable to the appellant employees. Further, as they have
not established that they are the Central Government
employees, on a par with their counterparts, their claim of
parity with the Central Government employees is also
defeated.

32. The ratio that courts must adopt an attitude of total

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-32-

non-interference or minimal interference in the matter of

interpretation of rules framed by autonomous institutions has

.

no applicability in the case at hand as the respondents in the

case at hand had initially been engaged in a society in March

2004. In terms of the notification dated 05.05.2012 whereby

the society was ordered to be closed, the CAT Plans and

of
Compensatory Afforestation of all Hydro Electric Projects in

Satluj River Basin were to be implemented through the
rt
concerned Conservator of Forests.

33. Moreover, after the society ceased to function on

30.06.2012 work being done by the respondents in the

erstwhile society was now required to be performed by the

existing staff posted in the Rampur Forest Circle and Division.

Admittedly there was an acute shortage of staff in the Rampur

Circle hence a fresh contract was entered into with the

respondents. The conservator of forest Rampur circle vide

letter dated 30.05.2012 had requested for the accommodation

of the computer operators engaged in the society in his office

as work of the society after its closure was to be looked after

by his office and payment to the computer operators was

sought to be made from “CAMPA” (page 183 of the paper

book).

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34. Besides funds to the State CAMPA are provided by

the statutory national body CAMPA. As per the contract

.

entered into between the parties the respondents were in the

deployment of CAMPA in the office of the Chief Conservator

HP. Once the Compensatory Afforestation Fund Act, 2016,

came into vogue on 30.09.2018 the governing body of the

of
State CAMPA could with the prior concurrence of the State

Government create posts in the State Authority. With respect
rt
to such posts created there exists no bar for regular

recruitment nor pay parity with equivalent post holders in the

government especially when officers appointed on deputation

have been given the benefit of pay parity with their equivalent

counterparts. Hence even on the question of pay parity the

judgement referred to by the appellants has no applicability.

35. The State CAMPA is performing governmental

functions. Primarily consists of government functionaries. It is

mainly funded by the national body. No fault can, therefore,

be found with the finding returned that the State CAMPA is an

extension of the government.

36. Other than the aforesaid, reliance has been placed

on 2023 SCC Online SC 1417 titled Ganesh Digamber

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Jambhrunkar and others versus State of Maharashtra

and others to deny the claim of regularisation being raised in

.

the case at hand. In the said case contractual appointment of

the petitioners before the apex court had been made in the

year 2011. Aggrieved by the regular recruitment initiated

which had reached its culmination the same was assailed by

of
the petitioners before the high court in 2016 who sought

regularisation. The plea of regularisation was rejected by the
rt
apex court as there existed no policy for regularisation. The

said judgement is clearly distinguishable as in the case at hand

there exists a policy for regularisation.

37. Next reliance is placed on Chanchal Goyal (Dr) v.

State of Rajasthan, (2003) 3 SCC 485 to contend that the

principle of legitimate expectation has no application in the

case at hand.

The only point involved in the said case before the Apex
Court was whether Chanchal Goyal’s (Dr) termination from
service was in order. Therein Chanchal Goyal’s (Dr)
appointment dated 27-11-1974 as Lady Doctor under the
Municipal Council, Ganganagar contained a stipulation
appointment that she was being posted purely on temporary
basis for the period of six months or till the candidate
selected by the Rajasthan Public Service Commission is
available, whichever is earlier. Her working period continued
to be extended. The appointment was made in exercise of

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-35-

powers conferred under the relevant provisions of the
Rajasthan Municipalities Act, 1959 read with the relevant
Rajasthan Municipal Service Rules. In the interregnum she

.

was selected by the Service Commission in October 1976

and August 1982 she did not join pursuant to such selection
and continued on the basis of the orders of extension issued
by the Local Self-Government Department of the

Government. On 1-10-1988 her services were terminated on
the ground that the candidate selected by the Service

of
Commission was available. The learned Single Judge held
that termination of the appellant’s services was illegal since
order was passed ignoring the fact that she had put in 14
rt
years of service. The authorities were directed to adjudge
her suitability within a period of one month and regularize

her services with all benefits available to a substantively
appointed member of the service. In appeal the Division
Bench held that Chanchal Goyal (Dr) continued merely as a
temporary employee on the basis of appointment made

under the relevant Rule and as she had not been selected by
the Service Commission in accordance with the Rules. She

had no right to hold the post. In terms of interim orders
passed she was allowed to continue in the service during the

pendency of the matter before the Rajasthan High Court.
The plea of legitimate expectation raised in the aforesaid

backdrop was rejected by the apex court in the below
mentioned terms.

It has not been shown as to how any act was done by the
authorities which created an impression that the conditions
attached in the original appointment order were waived.
Mere continuance does not imply such waiver. No legitimate
expectation can be founded on such unfounded impressions.
It was not even indicated as to who, if any, and with what
authority created such impression. No waiver which would
be against requisite compliances can be countenanced.

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Whether an expectation exists is, self-evidently, a question
of fact. Clear statutory words override any expectation,
however founded. (See R. v. Director of Public Prosecutions,

.

ex p Kebilene (1999) 3 WLR 972 : (1999) 4 All ER 801 :

(2000) 2 AC 326 (HL)).

38. The appointment in the case at hand was not made

on a temporary basis or till a candidate selected was available,

of
whichever is earlier. Rather in the case at hand the

respondents have continued to discharge their duties on
rt
contractual posts for a considerable length of time. On account

of repeated extensions the respondents have continued in

service and have refrained from seeking alternative

employment, notwithstanding the contractual nature of their

engagement. In the aforesaid facts and attending

circumstances it is but natural that a legitimate expectation

arises that the appellants would, at some stage, recognize

their long and continuous service. With respect to the

legitimate expectation of the respondents in the case at hand,

it would be relevant to refer to the binding judgement of the

apex court in Bhola Nath (supra) wherein the case of

similarly situated employees has been dealt with. The relevant

extract thereof reads as under:-

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Legitimate Expectation of the employees: –

13. Another facet requiring consideration in the case of
contractual employees, such as the present appellants, is

.

the doctrine of legitimate expectation. Where employees

have continued to discharge their duties on contractual
posts for a considerable length of time, as in the present

case, it is but natural that a legitimate expectation arises
that the State would, at some stage, recognize their long
and continuous service. It is in this belief, bolstered by

of
repeated extensions granted by the Executive, that such
employees continue in service and refrain from seeking
alternative employment, notwithstanding the contractual
rt
nature of their engagement. At this juncture, it is thus
apposite to advert to the principles governing the doctrine

of legitimate expectation as enunciated by this Court in
Army Welfare Education Society v. Sunil Kumar Sharma,
8 wherein it was held as follows: –

“63. A reading of the aforesaid decisions brings
forth the following features regarding the doctrine

of legitimate expectation:

63.1. First, legitimate expectation must be
based on a right as opposed to a mere hope,

wish or anticipation;

63.2. Secondly, legitimate expectation must
arise either from an express or implied
promise; or a consistent past practice or custom
followed by an authority in its dealings;

…

63.5. Fifthly, legitimate expectation operates in
the realm of public law, that is, a plea of

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-38-

legitimate action can be taken only when a
public authority breaches a promise or
deviates from a consistent past practice,

.

without any reasonable basis.

…

64. The aforesaid features, although not
exhaustive in nature, are sufficient to help us
in deciding the applicability of the doctrine of

of
legitimate expectation to the facts of the case
at hand. It is clear that legitimate expectation,
jurisprudentially, was a device created in
rt
order to maintain a check on arbitrariness in
State action. It does not extend to and cannot

govern the operation of contracts between private
parties, wherein the doctrine of promissory
estoppel holds the field.”

                          (emphasis laid)

                                  It     is,    therefore,        not      difficult    to

comprehend the expectation with which such

contractual employees continue in the service of
the State. The repeated conduct of the employer-
State in expressing confidence in their performance

and consistently granting monetary upgrades &
tenure extensions reasonably nurtures an
expectation that their long and continuous service
would receive further recognition.

39. Thus, we are of the considered view that the

learned Single Judge has not erred in any manner in allowing

the writ petition and we also do not find any plausible reason

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-39-

to take a different view. Therefore, the present appeal is

dismissed being devoid of merit and the judgment passed by

.

learned Single Judge is upheld.

The present appeal is disposed of in the aforesaid

terms, so also the pending application(s), if any.

                                      of
    (G.S. Sandhawalia)                   (Bipin Chander Negi)
       Chief Justicert                             Judge


    17th March, 2026

      (Gaurav Rawat)








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