Contractual Employee’s Rights: Supreme Court Restores Reinstatement with Partial Back Wages

The case of Swati Priyadarshini v. The State of Madhya Pradesh & Ors. revolves around the termination of a contractual employee under the Sarva Shiksha Abhiyan (SSA) and whether the non-renewal of her contract was lawful. The Supreme Court ruled in favor of the appellant, restoring her service with partial back wages and holding that the termination order was stigmatic, requiring a fair hearing.

The appellant, appointed as an Assistant Project Coordinator (APC) on a contract basis, was removed from service allegedly due to inefficiency. She claimed that the termination was retaliatory, as she had exposed misconduct in a hostel for children with special needs. The trial court ruled in her favor, but the High Court reversed the decision. The Supreme Court reinstated the earlier order, granting her reinstatement with partial back wages.

Arguments Presented

Appellant’s Arguments

The appellant contended that:

• The termination order was stigmatic as it cited inefficiency and misconduct without an inquiry.
• The decision to remove her was influenced by her complaint against irregularities in the hostel management.
• Her termination violated service rules, which mandated a one-month notice for contract termination.
• The High Court overlooked procedural lapses and the retaliatory nature of the action against her.

Respondents’ Arguments

The State of Madhya Pradesh argued that:

• The termination was a simple non-renewal of a contractual appointment, not a dismissal.
• The appellant had no vested right to continued employment.
• Her performance was unsatisfactory, justifying the decision not to extend her contract.
• The termination order did not impose any stigma and was within the administrative discretion of the employer.

Supreme Court’s Observations

The Supreme Court examined the terms of the contract, procedural requirements, and the factual background, concluding:

• The termination was not a mere contract non-renewal but carried allegations of inefficiency, making it stigmatic.
• The appellant should have been given a proper hearing before her contract was terminated.
• The retaliatory aspect of the termination, in light of her complaints against hostel mismanagement, could not be ignored.
• The respondents failed to follow service rules mandating notice before termination for inefficiency.

Final Judgment

The Supreme Court ruled that:

• The High Court’s decision was overturned, and the appellant’s reinstatement was ordered.
• She would receive 50% of back wages as compensation.
• The respondents could not initiate fresh proceedings against her based on the same charges.
• The order was to be implemented within three months.

This ruling underscores the importance of procedural fairness in contract employment terminations and ensures protection against arbitrary dismissals.

Petitioner Name: Swati Priyadarshini.
Respondent Name: The State of Madhya Pradesh & Ors..
Judgment By: Justice Hima Kohli, Justice Ahsanuddin Amanullah.
Place Of Incident: Madhya Pradesh.
Judgment Date: 21-08-2024.

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