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Termination of contractual job can be challenged in court, says Supreme Court
December, 21st 2011

In view of changing nature of employment in the commercial world, the Supreme Court has said that courts can interfere even in the case of contractual job if the decision taken by the management is arbitrary.

A bench of justices Cyriac Joseph and T S Thakur, however, said that scope of such judicial review is not all pervasive.

"It is no longer open to the authority passing the order to argue that its action being in the realm of contract is not open to judicial review. A writ Court is entitled to judicially review the action and determine whether there was any illegality, perversity, unreasonableness, unfairness or irrationality that would vitiate the action, no matter the action is in the realm of contract," it said.

The court passed the order on a petition filed by Grid Corporation of Orissa Ltd challenging the Orissa High Court's order asking it to reinstate one of its employee whose contractual job was terminated.

"It is true that judicial review of matters that fall in the realm of contracts is also available before the superior courts, but the scope of any such review is not all pervasive. It does not extend to the Court substituting its own view for that taken by the decision-making authority," the bench said.

The bench said that there has been "notable shift" in the legal position over the decade and now the termination of contractual jobs can be challenged in the court which can review the decision taken by authority.

"A conspectus of the pronouncements of this court and the development of law over the past few decades show that there has been a notable shift from the stated legal position settled in earlier decisions, that termination of a contractual employment in accordance with the terms of the contract was permissible and the employee could claim no protection against such termination even when one of the contracting parties happened to be the State," the bench said.

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