Extension of service contract beyond the agreed period cannot be claimed a matter of vested right

Whether there is any vested right in continuing with the employment despite the fact that contract of employment has come to an end by efflux of time

Delhi High Court answered in negative to a question whether there is any vested right in continuing with the employment despite the fact that contract of employment has come to an end by efflux of time.

The present matter pertains to contractual employment with State as the hiring party. While deciding the issue the Court distinguished and departed from the landmark precedent Secretary, State of Karnataka and Ors. v. Umadevi & Anr. by the Apex Court that the services of persons employed for a project have to be co-terminus with the project in question, on the ground that once an acceptance to the terms of the contract has been given, later on it cannot be claimed that the services are liable to be continued outside the scope of contract so executed. Once the terms of the contract stands duly performed and the contract has come to an end, State is under no obligation to extend the same.

In view of the above finding, the following key points emerge:

•    State is not bound to extend a contract of employment on its expiry.
•    Holding of any enquiry by the State to decide whether contract is to be extended or not leading to subsequent refusal of extension, does not amounts to violation of fundamental right as enshrined in the constitution, unless it is for the purpose of imposing any punishment.
•    Refusal to extend the contract term is not a disciplinary or penalizing action.
•    Contractual employment is workable so long it is mutually beneficial to the contracting parties.

        Union of India & Anr. vs. Satish Joshi
        [14.08.2013, Delhi HC]