Contract label cannot erase an advertised pay scale: Patna HC quashes fixed-pay orders for ATMA staff
Justice Ritesh Kumar held that Bihar could not swap the Rs 6500-10500 scale advertised in 2006 for fixed remuneration merely by calling the appointments contractual, but limited relief to the petitioners whose appointment letters carried no fixed-pay clause and to a Muzaffarpur accountant whose salary was cut from Rs 54,344 to Rs 16,105 a month.
The Patna High Court has partly undone a fourteen-year-old pay dispute inside Bihar’s Agricultural Technology Management Agency (ATMA), holding that the State cannot replace the pay scale it advertised and wrote into appointment letters with a fixed monthly sum simply because the appointments were contractual and scheme-based. Justice Ritesh Kumar, sitting as a single judge, quashed the joint Centre-State decision of 21 March 2012 that had rejected the Deputy Project Directors’ claim to a running scale, and a 2018 order that cut a Muzaffarpur ATMA accountant’s salary by more than two-thirds. But the relief is rationed. Of the eight Deputy Project Directors who filed the lead petition in 2012, only two get the scale redetermined; four lose outright because their own appointment letters said “fixed pay”; and two must first produce appointment letters that were never placed on record.
A World Bank project, a 2006 advertisement, and a scale that kept changing
ATMA began in 1997 under the National Agricultural Technology Project with World Bank aid, in 28 districts across the country, four of them in Bihar: Patna, Madhubani, Munger and Muzaffarpur. That project ended on 30 June 2005, and the Union Agriculture Ministry’s Tenth Plan scheme for extension reforms took over the funding. Bihar decided to set up ATMA in 15 districts.
On 29 March 2006, by Memo No. 1042, the State Agriculture Department created and sanctioned posts for each district ATMA, including one Deputy Project Director, in the pay scale of Rs 6500-200-10500 with dearness and housing allowances. An advertisement in the Hindi daily Hindustan on 1 June 2006 invited applications for Project Director and Deputy Project Director. It repeated the Rs 6500-200-10500 scale. It also said the appointments would be on contract basis on a fixed pay, for the financial year 2006-07, extendable on review if the scheme continued.
The eight petitioners were selected as Deputy Project Directors in different districts and appointed by the respective District Magistrates-cum-Chairmen of ATMA. The judgment records a distinction that turned out to decide the case. The appointment letters of petitioners 1, 2, 4 and 6 said the appointment was in the scale of Rs 6500-200-10500 on contract basis and on a fixed pay. The letters of petitioners 3 and 5 contained no fixed-pay clause. For petitioners 7 and 8, no appointment letter was on record at all. All of them joined, drew the pay scale, continued past 2006-07, and received post facto sanction.
The trouble started with letter No. 879 of 16 February 2010, addressed to the Accountant General. It listed pay scales with fixed pay for ATMA posts. For Deputy Project Director it showed Rs 9300-34800 with grade pay of Rs 4200, the Sixth Pay Commission replacement for Rs 6500-10500, but Appendix I showed Rs 18,000 as the fixed salary. Clause 15 said persons working against sanctioned ATMA posts would get no allowance except travel allowance, while government servants on deputation to the same posts would draw salary and allowances like other State employees. Two standards, the petitioners said, for the same work.
They went to the High Court in CWJC No. 10107 of 2010. Once notice was served, the State issued Memo No. 5060 of 25 August 2010, which among other things capped a Deputy Project Director’s tenure at five years, something neither the advertisement nor ATMA’s bye-laws had provided, and Memo No. 1016 of 11 February 2011 directing correction of the petitioners’ pay orders. Both were stayed on 29 March 2011. On 17 November 2011 the writ was disposed of with the observation that the question looked purely administrative, to be sorted out between the Union and the State across the table by a joint reasoned order within two months.
That joint order came on 21 March 2012, as Memo No. PPM-105/2009 (Part) 1626, signed by the Joint Secretary (Extension) in the Union Agriculture Ministry and the Secretary of Bihar’s Agriculture Department. It recorded that ATMAs in Bihar were bound by their own bye-laws to follow State directions, that the State’s order was consistent with the scheme guidelines, and that the claim to a running scale as a matter of right was dismissed; higher emoluments within the ceiling could be considered only by the competent authority in the State. Nine days later, letter No. 1794 of 30 March 2012 from the State Nodal Officer fixed the Deputy Project Directors’ remuneration at Rs 21,000 and directed recovery of any excess already paid under the scale. The present petition, CWJC No. 9687 of 2012, challenged both. An interim order of 15 May 2012 restrained coercive recovery but did not stay the policy.
What the Deputy Project Directors argued
Mr Sharda Nand Mishra and Ms Isha Mishra, for the petitioners, pressed three points. First, the petitioners had been appointed, after an advertisement and selection, in a scale that carried grade pay, dearness allowance, house rent and medical allowance, and the respondents kept changing their stand. Second, the Union’s own revised ATMA scheme of 16 April 2010 for the Eleventh Plan assigned the post a scale of Rs 15600-39100 plus Rs 5400, and the Centre bore 90 per cent of the cost, so a fixed Rs 18,000 or Rs 21,000 was irrational. Third, the petitioners had worked continuously from 2006-07 until 14 September 2018, when, without notice, a letter fixed their pay at Rs 45,090 and lumped them with Deputy Project Directors recruited in 2012-13 on Rs 23,100 under a later advertisement. That 2018 letter was challenged by an interlocutory application, IA No. 01 of 2026, filed only this year.
Counsel explained the delay through another case. In CWJC No. 2454 of 2018, a challenge to the 2014 cadre rules, the State’s counter affidavit said the petitioners would continue till the age of 60, though without seniority, roster or parity with regular appointees, and a Division Bench disposed of the writ on that statement. If the State had promised to keep them till superannuation on the same post and status, counsel argued, their status was that of people appointed in a pay scale, and the State could not take their work for over a decade and then pay them a consolidated sum lower than their existing salary.
The petitioners relied on three Supreme Court decisions: Rakesh Kumar Charmakar v. State of Madhya Pradesh, 2025 INSC 136, on temporary employees appointed against vacant sanctioned posts being entitled to the regular scale under a State circular; Shripal v. Nagar Nigam, Ghaziabad, 2025 SCC OnLine SC 221, on equal pay for equal work and the limits of Umadevi; and Bhola Nath v. State of Jharkhand, 2026 SCC OnLine SC 129, on legitimate expectation and the State as a model employer for long-serving contractual staff selected through a proper process.
The State: a scheme post, a fixed salary, and a cadre that came later
Mr Deepak Sahay Jamuar, for the State, answered that the 1 June 2006 advertisement itself said the posts would be filled on contract on a fixed salary with only travel allowance under project rules, and the appointment letters said the same. ATMA is one of 20 to 25 schemes of the Agriculture Department; contractual engagements under it are co-terminus with the scheme and end when it ends. The State Cabinet decides the nature of service and pay, and the department had fixed Rs 18,000 for contractual Deputy Project Directors. After five years of drawing a fixed salary, the demand for a pay scale was misconceived. Deputationists from government service were entitled to their scales; contractual appointees could not be equated with them. Annexure III(b) of the scheme guidelines left the mode of filling posts to the State, which chose contract on fixed remuneration until the vacancies were filled another way.
A supplementary counter affidavit added that ATMA is a centrally sponsored scheme in which the Centre sets policy and the State handles manpower and pay; the Union had clarified that the scheme contemplates contractual engagement on fixed remuneration, so the petitioners were not holders of regular civil posts. Since 30 March 2012 they had been drawing a fixed honorarium, revised from time to time, and the 14 September 2018 communication merely prescribed uniform remuneration for all Deputy Project Directors. The Bihar Agriculture Service Rules, 2014 brought the post into a cadre for the first time; a requisition went to the Bihar Public Service Commission as Advertisement No. 86 of 2014, and one of the petitioners was selected and appointed on a regular basis through it. The rest, the State said, continue on contract and are paid under the scheme, and have been permitted to serve till superannuation under the order of 6 October 2021 and the disposal of CWJC No. 2454 of 2018 on 11 January 2022. Two fresh writs filed by some of them in 2025, after an unsuccessful attempt at Advertisement No. 18 of 2024, are still pending.
The accountant who lost Rs 38,000 a month
The connected petition, CWJC No. 832 of 2019, came from Jagat Narayan Mishra, selected as Accountant at ATMA Muzaffarpur after an advertisement of 15 June 2008 that showed the post in the scale of Rs 4000-6000 and demanded eight years of accountancy experience. His appointment letter, Memo No. 588 of 19 September 2009, was followed by an agreement with ATMA on 25 September 2009 whose clause 6 promised remuneration of Rs 4000-6000 a month. The February 2010 letter then notified the Accountant’s scale as Rs 5200-20200 with grade pay of Rs 2400 and basic pay of Rs 8000, and the August 2010 notification placed the sanctioned post in Rs 9300-34800 with grade pay of Rs 4200. He was paid in that scale, Rs 54,344 a month, until September 2018.
He and other accountants had earlier filed CWJC No. 18095 of 2011 against the 25 August 2010 order, which they said gave them a fixed Rs 10,000 in place of a scale. That writ and a contempt petition were disposed of on 2 November 2017 with liberty to make a fresh representation to the Principal Secretary. The result was a reasoned order of 1 October 2018, Memo No. 3574, which rejected the pay-scale claim, applied the fixed-pay regime, and kept recovery of excess in abeyance because of the stay in the Deputy Project Directors’ case. A consequential office order of 6 October 2018, Memo No. 353, from the Project Director brought his pay down to Rs 16,105 from October 2018.
Mr Aman Kumar, for the accountant, said the Principal Secretary had mechanically applied the 21 March 2012 decision, which concerned Deputy Project Directors, to a different post with different government orders behind it. The post was centrally funded, first at 90:10 and from an 8 April 2016 sanction at 60:40. Beyond restoring the scale, he sought the difference in salary from October 2018 until retirement at 65 in July 2025, and full salary for 31 July 2020 to 29 June 2022, when the Project Director, who was not his appointing authority, retired him by Memo No. 523 and then reinstated him by Memo No. 254 after accepting the mistake. He asked for interest at 9 per cent and cited Jageshwar Sahoo v. District Judge, 2025 INSC 449, and State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, against recovery of excess pay.
Mr Raghwanand and Mr Rajnish Shandilya, for the State, set out the scheme’s history year by year. The Accountant post was sanctioned at Rs 4000-6000 in 2006 and the scale was repeated as the scheme spread to all 38 districts by 2008. In 2010 the post was shown for the first time at Rs 5200-20200 with grade pay of Rs 2400 and a fixed pay of Rs 8000. From 2011-12 the annual sanction letters carried only a fixed figure, rising from Rs 10,000 to Rs 16,105 for 2017-18. No circular prescribed a scale for a contractual appointee; the pay of all contractual employees in Bihar was governed by the General Administration Department’s resolution No. 2401 of 18 July 2007.
Why the contractual label did not settle the question
Justice Kumar framed the common issue as whether employees appointed through an advertisement and selection under ATMA could be denied the pay scale specified in that advertisement and in their appointment letters, later reduced to fixed remuneration, merely because the appointments were contractual and scheme-based. The respondents had consistently said the engagements were co-terminus with the scheme. But the original advertisements, the appointment letters, the later government communications and the circumstances in which the pay was altered had to be looked at together.
On the Deputy Project Directors, the judge accepted that the 2006 advertisement said contract basis and fixed pay, and that four appointment letters said so too. Even so, the contractual nature of an appointment could not by itself be conclusive of remuneration where the advertisement and appointment letters expressly specified a scale and the employees kept working against the posts for which they were selected. The State may frame policy for scheme appointments, but consistently with the applicable guidelines, the terms of appointment, and the constitutional bar on arbitrary State action. Describing the petitioners as contractual employees did not sufficiently justify denying the remuneration that was part of the terms on which they were selected.
The judge found support in two of the petitioners’ authorities. Rakesh Kumar Charmakar had held that temporary appointment against vacant sanctioned posts did not disentitle employees to the pay scale where the conditions of appointment and the government policy were met; though it arose from a specific policy, it reinforced the principle that the nature of an appointment cannot be read apart from the terms of selection, the status of the post and the service conditions. Bhola Nath restated the State’s obligation as a model employer towards long-serving employees selected through a prescribed process against sanctioned posts, and held that “contractual nomenclature cannot, by itself, insulate State action from scrutiny” under Article 14. Shripal, the third case cited, does not feature in the court’s reasoning.
Applying those principles, the court held that the respondents were bound to consider the original terms of appointment and the ATMA guidelines before replacing the specified scale with fixed remuneration. The joint decision of 21 March 2012 could not be sustained insofar as it rejected the claim without reconciling the original terms with the later change. The judge added two qualifications at once: entitlement to the scale and its revisions would be worked out under the advertisement, the appointment letters and the relevant government orders, and none of this conferred the status of a regular cadre employee or any other benefit not otherwise admissible.
The accountant’s case was put slightly differently. The question was not whether a contractual employee could claim everything a regular government servant gets, but whether remuneration previously admissible to him could be cut in the manner adopted, without considering the terms of his appointment and the government orders specific to the Accountant post. He had specifically pleaded that the 2018 order departed from the earlier communications and lifted a decision about Deputy Project Directors onto his post without examining its own conditions. A reduction of that kind required a reasoned assessment; engagement under a centrally sponsored scheme did not by itself justify disregarding the terms that governed his pay. Both October 2018 orders therefore required interference insofar as they concerned him.
On the two years he spent out of service, the judge held that once the petitioner had been reinstated, the respondents had to examine why he was kept out and decide his entitlement to salary for that period under his service conditions. The claim could not be rejected simply because he did not work during those months, without first asking whether his exclusion was lawful and whether the absence was his fault.
Order
In CWJC No. 9687 of 2012, the joint decision in Memo No. PPM-105/2009 (Part) 1626 of 21 March 2012 and the consequential Memo No. ATMA-11/2010-1794 of 30 March 2012 were quashed, insofar as they deny the applicable pay scale and direct recovery on that basis, but only as regards petitioners 3 and 5. The authorities must determine and grant the scale admissible to those two under their original appointment letters, the revised ATMA scheme and the relevant government orders, taking into account the nature of their posts and their length of service. Petitioners 1, 2, 4 and 6 get no pay scale, because their appointment letters themselves recorded contract appointment on fixed remuneration. For petitioners 7 and 8, whose letters are not on record, the Agriculture Production Commissioner must decide their claims after giving them an opportunity to produce those letters, applying the same distinction.
In CWJC No. 832 of 2019, the order of 1 October 2018 (Memo No. 3574) and the office order of 6 October 2018 (Memo No. 353) were quashed insofar as they reduced the petitioner’s remuneration without adequately considering his terms of appointment, the government communications, his appointment letter and the agreement. The respondents must redetermine the pay scale admissible to him under the appointment letter of 19 September 2009 and the agreement of 25 September 2009, which prescribe Rs 4000-6000, calculate the arrears after crediting what has already been paid, and determine his salary claim for 31 July 2020 to 29 June 2022 in light of the circumstances of his exclusion and reinstatement.
The entire exercise in both petitions is to be completed within three months of receipt of the judgment. The relief is confined to determining and paying the remuneration legally admissible under the terms of appointment and government orders; it is not a direction for regularisation or for any other service benefit. Both writs were allowed in those terms, and pending interlocutory applications were disposed of. The judgment was reserved on 27 July 2026 and pronounced on 27 October 2026.