Punjab & Haryana High Court Denies Seniority Benefit for Adhoc Service in Cooperative Bank; Holds Initial Appointment De Hors Rules Cannot Be Counted
Case Name: Haryana State Cooperative Land Development Bank Ltd., Chandigarh v. Jaswant Singh and Another
Date of Judgment: 09 February 2026
Citation: RSA-4186-2005
Bench: Hon’ble Mr. Justice Deepinder Singh Nalwa
Held: The Punjab and Haryana High Court held that adhoc/work-charged service cannot be counted for the purpose of seniority, pay fixation and promotion where the initial appointment was not made by the competent authority and was de hors the applicable rules. The Court held that reinstatement with full back-wages pursuant to an industrial award does not validate an illegal initial appointment nor confer continuity for seniority benefits.
Summary: The Regular Second Appeal was filed by the Haryana State Cooperative Land Development Bank Ltd. challenging concurrent findings of the trial Court and the Lower Appellate Court, whereby the respondents/plaintiffs were granted the benefit of their adhoc/work-charged service for the purpose of seniority, pay fixation and promotion.
The respondents were appointed as Clerks on adhoc basis in 1974 and 1975 respectively by the Manager of the Bank. Their services were terminated on 20.07.1977. Upon an industrial dispute, the Industrial Tribunal, U.T. Chandigarh, vide award dated 12.02.1990, held the termination illegal and directed reinstatement with full back-wages. After reinstatement, the respondents sought counting of their prior adhoc service towards seniority and allied benefits. Their representation was rejected, leading to a civil suit.
The trial Court decreed the suit holding that reinstatement with full back-wages implied continuity of service and that there was no rule barring counting of adhoc service. The Lower Appellate Court affirmed the decree.
Before the High Court, the appellant-Bank contended that the respondents’ initial appointment was illegal, as the competent authority to appoint Clerks was the Managing Director and not the Manager, and that posts were never advertised. It was further argued that the Tribunal award did not grant continuity of service.
The High Court held that counting of adhoc service for seniority is permissible only where the initial appointment is made in accordance with the applicable rules and in conformity with Articles 14 and 16 of the Constitution. In the present case, the respondents were appointed by an incompetent authority and without advertisement of posts. Their appointment was thus not in accordance with rules.
Relying upon the Supreme Court judgment in Direct Recruit Class-II Engineering Officer’s Association v. State of Maharashtra, 1990 (2) SCC 715, the Court reiterated that if the initial appointment is de hors the rules, the adhoc service cannot be counted for seniority. The Court held that reinstatement with back-wages does not cure the illegality of the initial appointment nor entitle the employees to seniority benefits based on such service.
Decision: The Regular Second Appeal was allowed. The judgment and decree dated 27.07.2005 passed by the Lower Appellate Court and the judgment and decree dated 14.02.2005 passed by the trial Court were set aside.