HC directs HP Congress Govt to extend service benefits to contract employees

himachalscape September 8, 2026 3 minutes read

Shimla, Sept 8

Himachal Pradesh High Court has directed the State government to extend the benefits of seniority, increments, pay fixation, promotion and pensionary benefits to employees who were initially appointed on contract basis against sanctioned posts after undergoing the prescribed recruitment process. The court has also ordered the government to release arrears from the employeesâ€™ initial date of appointment.

Justice Jiya Lal Bhardwaj, in a judgment passed on September 1, 2026, allowed three writ petitionsâ€”CWP(OA) No. 1549 of 2019, CWP(OA) No. 1548 of 2019 and CWP(OA) No. 2026 of 2019â€”holding that the entire period of contractual service of the petitioners was required to be counted for service-related benefits after their regularisation.

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The cases concerned employees appointed as Language Teachers, Trained Graduate Teachers (Medical) and Drawing Masters. The court noted that the petitioners had been selected after undergoing the screening test, written examination/personal interview and other recruitment procedures prescribed for regular appointments. They were subsequently appointed against sanctioned posts, though their appointments were initially offered on contract basis.

The State had opposed the petitions, contending that the employees had accepted the contractual appointments with full knowledge of the terms and conditions and could not subsequently challenge the mode of appointment. The government also relied upon the fact that the petitioners had executed the requisite agreements before joining service.

The High Court, however, relied heavily on the legal position laid down by the Supreme Court in Direct Recruit Class II Engineering Officers’ Association versus State of Maharashtra and, more importantly, the subsequent judgment of a Division Bench of the Himachal Pradesh High Court in Devinder Kumar & Others versus State of Himachal Pradesh & Another.

The court observed that where appointments are made against sanctioned posts after following the prescribed recruitment procedure, including open-market competition through the designated recruiting agency, the period of service rendered on contract basis cannot simply be ignored after regularisation.

The judgment assumes significance as the State government had challenged the Division Bench judgment in Devinder Kumar’s case before the Supreme Court. The High Court specifically noted that the Special Leave Petition filed by the State was dismissed by the Supreme Court on July 29, 2026. Consequently, the legal position laid down in Devinder Kumar stood upheld.

“In case the appointment is as per the Recruitment and Promotion Rules after advertising the posts and undergoing the rigour of the said process,” the High Court held, the entire period of service is to be counted for seniority and other service benefits after regularisation.

The court consequently directed the respondents to count the contractual service of the petitioners for seniority, increments, pay fixation, promotion and pensionary benefits.

Importantly, the court also directed that the petitioners be paid arrears from their initial dates of appointment. The government has been given three months to release the dues. In case of failure to make payment within this period, the arrears will carry interest at 6 per cent per annum from the date of the judgment until actual payment.

The ruling could have wider implications for thousands of employees in Himachal Pradesh who entered government service through the prescribed recruitment process but initially served on contractual terms. It reinforces the principle that the State, as an employer, cannot deny consequential service benefits merely by treating a qualifying appointment as contractual when the recruitment itself complied with the rules applicable to regular appointments.

The judgment also marks another judicial setback to the State’s contractual employment regime, particularly where employees have been recruited against sanctioned posts after undergoing the same selection process prescribed for regular appointments.