Introduction:
In The State of Assam & Ors. v. Mukut Ranjan Sarma & Ors. (Citation: 2025 LiveLaw (SC) 1204), the Supreme Court of India examined a prolonged dispute arising out of the termination of 40 Lower Division Assistants (LDAs) who were appointed in the year 2001 under a special rehabilitation policy of the Assam Government. This policy was framed with the objective of providing livelihood support to families affected by terrorism and militancy, particularly those who had assisted the State in combating insurgency or in bringing militants back into the mainstream.
The controversy began when, years after their appointment, the services of these individuals were terminated on the ground that the appointments were not personally approved or signed by the Chief Secretary, who was the designated appointing authority under the policy. The affected employees approached the Gauhati High Court, where both the Single Judge and later the Division Bench ruled in their favour, holding that the appointments were valid and that the absence of the Chief Secretary’s signature alone could not invalidate them.
Aggrieved by these orders directing reinstatement, the State of Assam approached the Supreme Court. During the pendency of the appeal, considering the extraordinary delay of more than two decades and the practical difficulties of reinstatement, the State proposed a one-time monetary settlement in lieu of reinstatement. A Bench comprising Justice J.K. Maheshwari and Justice Vijay Bishnoi ultimately modified the High Court’s directions and accepted the State’s proposal, directing payment of ₹5 lakhs each to all 40 respondents within two months, thereby bringing a quietus to the long-standing litigation.
Arguments on Behalf of the State of Assam:
The State of Assam, represented by learned counsel, assailed the judgments of the Gauhati High Court primarily on the ground of lack of authority and procedural irregularity in the appointments. It was contended that the special rehabilitation policy clearly vested the power of appointment with the Chief Secretary, and that this power could not be exercised or delegated without explicit authorization. According to the State, since the appointment orders were not personally approved or signed by the Chief Secretary, they were void ab initio and conferred no legal right upon the appointees.
The State further argued that public employment must strictly conform to constitutional requirements, particularly Articles 14 and 16 of the Constitution of India. Any deviation from the prescribed procedure, it was submitted, would render the appointment illegal, irrespective of the benevolent object behind the policy. The High Court, according to the appellants, erred in overlooking this foundational defect and in granting relief merely on equitable considerations.
Another important submission made on behalf of the State related to the passage of time and administrative impracticability. The appointments dated back to 2001, and more than two decades had elapsed since then. During this period, the sanctioned posts had either been filled through regular recruitment or ceased to exist due to restructuring. Reinstatement at such a belated stage, the State argued, would disrupt administrative functioning and create further inequities.
In this backdrop, the State placed before the Supreme Court a proposal for a one-time financial compensation as a pragmatic solution. Initially, the State offered ₹2.5 lakhs per person, asserting that while it did not admit the legality of the appointments, it was willing to extend monetary relief in view of humanitarian considerations and to avoid prolonged litigation. Upon further directions of the Court, the State enhanced the offer to ₹5 lakhs per individual, which was affirmed through an affidavit filed by the Joint Secretary. The State urged the Court to accept this settlement in substitution of reinstatement, emphasizing that such a course would balance equity with administrative realities.
Arguments on Behalf of the Respondents (Writ Petitioners):
The respondents, who were the original writ petitioners before the Gauhati High Court, strongly defended the validity of their appointments. It was argued that their selection and appointment were made pursuant to a conscious policy decision of the State Government, framed to rehabilitate families affected by terrorism and militancy, a context that demanded a purposive and humane interpretation rather than a rigid technical approach.
Learned senior counsel appearing for the respondents submitted that the appointments were made after due process and with the knowledge and approval of the competent authorities within the government machinery. The mere absence of the Chief Secretary’s signature on the appointment orders, it was contended, was at best a curable procedural irregularity and not a substantive illegality that could vitiate the appointments altogether. Reliance was placed on the findings of the Gauhati High Court, which had categorically held that administrative acts cannot be invalidated solely on the ground of form when the substance of the decision was lawful.
The respondents also emphasized that they had served for a considerable period before their services were terminated, and that the termination had caused severe financial and social hardship. They argued that having been appointed under a special policy recognizing their families’ contribution to peace and security, they had a legitimate expectation of continued employment. The abrupt cancellation of their appointments after years of service was asserted to be arbitrary and violative of Article 14.
While maintaining that reinstatement was the most appropriate relief, the respondents, through counsel, acknowledged the long passage of time and the uncertainties involved. In this context, they left it to the wisdom of the Court to mould the relief appropriately, provided that the compensation, if any, was fair, reasonable, and commensurate with the loss suffered over the years.
Court’s Judgment:
After considering the rival submissions and examining the record, the Supreme Court adopted a balanced and pragmatic approach. The Bench noted that the appointments in question were made as far back as 2001 and that more than two decades had elapsed since then. During this period, the litigation had remained pending, and the respondents had been out of service for a substantial length of time.
The Court took note of the findings of the Gauhati High Court, which had upheld the validity of the appointments and quashed the termination orders. However, the Supreme Court observed that the relief of reinstatement with arrears of salary, though legally justified in ordinary circumstances, may not always be the most equitable solution in cases involving extraordinary delay and changed circumstances.
Importantly, the Bench recorded the State Government’s willingness to offer a one-time monetary settlement in lieu of reinstatement. The Court noted that the State had initially proposed ₹2.5 lakhs per person but, upon the Court’s intervention, enhanced the amount to ₹5 lakhs per respondent, as confirmed in an affidavit filed by the Joint Secretary. The Court considered this enhanced offer to be a reasonable and fair compensation, particularly in light of the practical difficulties associated with reinstatement after such a long lapse of time.
In a significant modification of the High Court’s directions, the Supreme Court held that the ends of justice would be met by accepting the State’s proposal. Accordingly, the Bench passed the following operative direction:
“Thus, modifying the direction of reinstatement and payment of arrears of salary, we direct that the appellants shall pay Rs.5,00,000/- (Rupees Five Lakhs only) per respondent (40 in number as per Memo of Parties of present appeal) within a period of two (2) months from today and submit a compliance report to the Registry of this Court.”
By doing so, the Court effectively substituted the relief of reinstatement with a lump-sum monetary compensation, thereby bringing finality to the dispute. The judgment reflects the Court’s recognition that equity, fairness, and practicality must guide the grant of relief, especially in service matters entangled in long-drawn litigation.