Disclaimer: This has been reported after the availability of the order of the Court and not on media reports so as to give an accurate report to our readers.
Supreme Court: In a case concerning continuation of contractual Junior Engineers (Civil) appointed under a World Bank-funded project, a Division Bench of Sanjay Karol and Sanjeev Sachdeva, JJ., dismissed the Special Leave Petition challenging the Himachal Pradesh High Court’s refusal to modify the interim protection granted to the employees. The High Court had permitted the employees, whose services had been extended from time to time, to continue in service on the same terms and conditions, while noting that they had worked diligently for about seven years and “cannot be left in limbo”. The Supreme Court, having considered the contentions made across the Bar, found no reason to grant Special Leave to Appeal against the impugned order dated 3 July 2026 passed in CMP No. 12572 of 2026 and accordingly dismissed the SLP on merits.
Background:
The present issue arose out of an application filed seeking modification of the interim order dated 12 November 2025 passed by the High Court in LPA No. 775 of 2025. The successful writ-petitioners had been appointed on 16 November 2019 as Junior Engineers (Civil) purely on temporary basis for a World Bank-funded project, initially for a period of 11 months. Their contracts were thereafter extended from time to time.
The writ-petitioners had sought regularization on the basis of the policy dated 28 December 2021 framed by the Horticulture Department. The Single Judge had allowed the writ petition and granted the relief of regularization, which was subsequently assailed before the Division Bench.
While admitting the appeal for regular hearing, the High Court, by order dated 12 November 2025, balanced the equities between the State and the employees and directed that the State should not dispense with the services of the writ-petitioners, who were permitted to continue to serve on the same terms and conditions.
The employees represented to the State on 13 November 2025. Subsequently, upon filing of Execution Petition Nos. 1 to 4 of 2026, the Court, vide order dated 7 January 2026, observed that contempt proceedings would be liable to be issued. The State thereafter approached the Supreme Court against the interim order dated 12 November 2025.
The Supreme Court dismissed the SLP on the ground that it was directed against an interim arrangement, granting liberty to the State to seek modification before the High Court, to be decided within two months of filing. An application was accordingly filed seeking recall or modification of the interim directions, on the ground that the project had closed down and no funds were available with the Himachal Pradesh Horticulture Development Society (HPHDS).
The Division Bench, however, found no plausible reason to modify the protection granted to the employees. The Court took note of the Supreme Court’s observations in Bhola Nath v. State of Jharkhand1, decided on 30 January 2026, particularly with regard to the issue of legitimate expectation of employees, while referring to the Constitution Bench decision in State of Karnataka v. Umadevi, (2006) 4 SCC 1.
The High Court also relied upon its decision in State of H.P. v. Bhupinder Singh Mehta2, wherein regularization of similarly situated contractual computer operators was upheld. In that case, the High Court had noticed that the concerned society was performing governmental functions and was mainly funded by the national body.
Addressing the State’s reliance on the original appointment, which showed purely temporary appointments under the World Bank-funded HPHDP for the project period alone, the Division Bench noted that the Single Judge had directed regularization precisely because the appointments, though routed through the Society, were made under the aegis of the Department of Horticulture itself.
Importantly, the Division Bench observed that it had already balanced the interests of both the writ-petitioners and the State. Had the interim protection not been granted, the State would have been constrained to incur further financial outlay towards the benefits of regularization, subject to the final decision in the LPA. At the same time, the employees, who had been working diligently for over a period of seven years, could not be left in limbo.
The High Court also observed that the State had various avenues where the employees could be adjusted, if the State so wished. The High Court, therefore, found no justification for disturbing the existing interim arrangement.
The Division Bench held that there was no plausible reason to modify paragraph 9 of the order dated 12 November 2025, particularly in view of the peculiar facts and circumstances of the case.
The High Court emphasised that the employees had worked diligently for about seven years and “cannot be left in limbo”, while the interim order had already struck a balance between the competing interests of the State and the employees.
Accordingly, the application seeking modification of the order dated 12 November 2025 passed in LPA No. 775 of 2025 was dismissed.
Analysis and decision
The Court, having heard the parties and considered the contentions made across the Bar, did not find any reason to grant Special Leave to Appeal against the impugned judgment/order dated 3 July 2026 passed by the High Court of Himachal Pradesh at Shimla in CMP No.12572 of 2026.
Accordingly, the Special Leave Petition was dismissed on merits.
[State of H.P. v. Nitin Thakur, Special Leave to Appeal (C) No(s).28038 of 2026, decided on 21-8-2026]
Advocates who appeared in this case:
For the petitioners: Anup Rattan, Advocate General, Ketan Paul, AOR, Puneet Rajta, Gunita Tandon, Prachet Sharma, Shalab Thakur, Swati Draik, Advocates
For the respondent: Sunil Mohan Goel, Sr. Adv., Pragati Neekhra, AOR, Chandernarayana Singh, Aryan Vaibhav Shrivastava, Advocates
1. SLP (Civil) No. 30762 of 2024
2. LPA No. 841 of 2025
