The Delhi High Court partly allowed a batch of nine writ petitions on 1 September 2026, directing WAPCOS Limited to regularise contractual employees who have completed ten years of service and to consider the five-year cohort under its own recruitment rules. Justice Sanjeev Narula upheld the company's office order of 10 November 2025 as a prospective manpower measure but set aside the termination notices of 30 January 2026 in Piyush Kumar Singh & Ors. v. Union of India & Ors., W.P.(C) 3843/2026 and connected matters.
Background
WAPCOS Limited, a Government of India undertaking, engaged a large body of employees on contractual terms through recognised routes — advertisements, the Data Bank, the Employment Exchange and walk-in interviews. Engagements were renewed year after year, many employees were moved into contractual pay scales, and they were deployed in continuing institutional roles for periods ranging from about four to sixteen years.
On 10 November 2025 WAPCOS issued an office order deciding to discontinue further extensions of contractual engagements in non-technical categories. On 30 January 2026 it issued notices invoking Clause 7 of the contracts to bring engagements to an end on one month's notice. The petitioners challenged both.
Their central contention rested on the company's own Recruitment and Promotion Rules. Guideline (j) of those Rules contemplates that suitable and efficient contractual employees who have rendered at least five years of contractual service may be given preference for regular appointment. The petitioners said this route was never applied to them despite many having served well beyond five years, and pointed to approximately 195 contractual employees whom WAPCOS had regularised in earlier phases. WAPCOS replied that every engagement remained contractual and conferred no right to extension or regular appointment, that Guideline (j) was purely discretionary, that the petitioners had not entered through an open competitive process against sanctioned posts, and that restructuring and financial constraints justified the discontinuation.
Key holdings
1. A contractual label does not establish illegal entry. Starting from Secretary, State of Karnataka v. Umadevi, (2006) 4 SCC 1, the Court held that the enquiry cannot begin from the assumption that a contractual appointment is illegal merely because it is contractual. Annexure V of the Rules itself created a recognised route for contractual recruitment. Exclusion on the ground of illegal entry must rest on petitioner-specific contemporaneous material showing private nomination, patronage, fraud, misrepresentation or another clandestine route — and direction (iv)(f) records that "[m]ere non-availability of the original recruitment file shall not, by itself, establish an illegal entry."
2. Guideline (j) cannot be left unaddressed. The Court held that five years does not confer regular status but marks the point at which eligibility for the preferential route arises; that the discretion reserved to management is not unfettered; and that having invoked the mechanism in the past, WAPCOS could not leave it unaddressed for employees it continued to retain through successive extensions.
3. Clause 7 could not be used as a blanket termination device. The notices of 30 January 2026 travelled beyond the policy of 10 November 2025, which decided only to discontinue future extensions. No petitioner-specific material justified premature termination. The Court also rejected the reliance on a restructuring proposal dated 24 June 2026, holding that a later proposal cannot retrospectively supply the basis for an earlier decision.
4. No parity with the earlier 195 regularisations. Article 14 of the Constitution of India does not require the employer to repeat an irregular exercise; those earlier regularisations were under separate corrective proceedings. They remained relevant only to show that movement from contractual to regular service formed part of the employer's own framework.
5. A three-category remedial scheme. Category A comprises those with ten years or more of service, or within six months of that mark: they are to be regularised after a limited verification confined to length and continuity of service, requisite qualification, adverse service or vigilance record, and whether entry was traceable to a mode recognised by Annexure V or another public-facing selection process. Category B comprises those with five years or more: they are to be placed before the Selection Committee contemplated by Guideline (j), which must make a petitioner-specific recommendation, with the competent authority deciding within two weeks of receiving it. Category C, below five years, is not entitled to consideration under Guideline (j).
6. Supernumerary posts and seniority. Where no appropriate vacancy exists, WAPCOS must create a personal supernumerary post coterminous with the employee's service, outside the regular vacancy pool, not altering the sanctioned cadre or reservation roster and lapsing on cessation. Consistent with the Supreme Court's order in Government of NCT of Delhi v. Pawan Sharma, an employee regularised under the judgment ranks below those already borne on the regular cadre.
7. Prospective benefits only. Regular pay and prospective service benefits are admissible from the date of judgment for Category A petitioners in service, with no arrears representing the difference between contractual and regular pay for any earlier period. Re-engagement of ceased employees operates prospectively without back wages.
8. Timetable. Direction (xxi) requires the Category A verification and regularisation exercise to be completed within six weeks of 1 September 2026 and the Category B consideration within three months, and provides that delay by WAPCOS shall not prejudice the continuation or re-engagement directed.
Implications for practitioners
The judgment is likely to be cited well beyond WAPCOS, because its operative principle is not about the employee's status but about the employer's own rulebook. Where a public sector undertaking maintains an internal route from contractual to regular service and has used it before, it cannot retain the provision, keep extending engagements, and then treat the provision as inert. Counsel acting for long-serving contractual staff in any central undertaking should begin by locating the equivalent of Guideline (j) in the employer's recruitment rules and by establishing that it has been operated at least once.
For employers, the exposure is procedural as much as substantive. Direction (viii) requires that before excluding a Category A employee, WAPCOS identify the petitioner-specific material relied upon, furnish its substance to the employee, allow a response and pass a brief reasoned order. A general assertion that a cohort consists of backdoor entrants will not survive that requirement. Human resources teams should therefore reconstruct entry documentation — advertisements, panels, interview or skill-test records, pay-scale orders — before the verification window closes.
The chronology point is equally portable. A restructuring proposal generated after an impugned decision cannot justify it. Where a manpower rationalisation is genuinely driving terminations, the contemporaneous record must show the assessment preceding the decision, with quantified financial material if financial non-viability is to be relied on as an independent ground.
Two limits should be noted. The Court did not grant back wages or arrears of the differential between contractual and regular pay, so the remedy is forward-looking. And employees engaged as daily-wage workers or under a distinct arrangement outside the Annexure V framework are expressly excluded from the benefit of Guideline (j) by direction (xx), leaving their claims to whatever legal regime governs that engagement.