Cadre restructuring and Recruitment in public sector institutions: Supreme Court

Introduction:

The Supreme Court of India, in Sports Authority of India & Anr. v. Dr. Kulbir Singh Rana (2025 INSC 319), addressed critical issues concerning employment regularization, cadre restructuring, and the legal implications of recruitment rules under the Sports Authority of India (SAI). This judgment highlights the role of administrative law in safeguarding employee rights against arbitrary actions by government bodies.

Factual Background:

The dispute arose when SAI implemented the Sports Authority of India (Executive Cadre) Staff Recruitment Rules, 2022 (2022 Rules) to restructure the existing cadre. The respondents, who were working as physiotherapists on a contractual basis, were not retained under the new rules. Instead, SAI advertised fresh vacancies for similar positions, requiring existing employees to apply anew.

Aggrieved by their exclusion from automatic absorption, the respondents challenged SAI’s decision before the Central Administrative Tribunal (CAT), which ruled in their favor. The Tribunal directed SAI to recognize the respondents as part of the “initial constitution” under the 2022 Rules and quashed their termination orders. SAI challenged this decision before the Delhi High Court, which upheld the CAT’s order. Subsequently, SAI filed an appeal before the Supreme Court.

Key Legal Issues:

1. Whether the respondents were entitled to be recognized as “initial constituents” under the 2022 Rules?
2. Whether SAI’s decision to terminate their services and advertise new positions was legally justified?
3. Whether SAI’s attempt to recall its earlier concession before the High Court was legally tenable?

Arguments Presented

Arguments by the Appellant (Sports Authority of India)

• The recruitment process was redesigned to ensure merit-based selection, and the respondents were required to compete for their positions.
• The term “initial constitution” in the 2022 Rules applied only to employees who had been formally absorbed under the previous rules and not to contractual employees.
• The CAT’s order interfered with the administrative discretion of SAI and set an incorrect precedent for employment absorption.

Arguments by the Respondent (Dr. Kulbir Singh Rana & Others)

• The respondents had been working under SAI for a considerable period and were recruited through a formal process.
• The CAT rightly held that their appointments were “irregular but not illegal,” meaning they should be regularized under the 2022 Rules.
• SAI had already conceded before the Delhi High Court that it would comply with the Tribunal’s order, and it could not now seek to overturn that commitment.

Supreme Court’s Reasoning and Decision

1. Interpretation of “Initial Constitution”

The Court analyzed the recruitment provisions under the 1992 and 2022 Rules and held that:

• The definition of “initial constitution” in the 2022 Rules was broad enough to include employees who had been serving under prior regulations.
• The respondents’ appointments were not illegal but merely irregular, and therefore, they could not be denied the benefits of regularization.

2. Arbitrary Action by SAI

The Supreme Court found that SAI’s decision to terminate the respondents and invite fresh applications was arbitrary and contrary to established principles of administrative fairness. The Court emphasized:

• Government bodies cannot circumvent employment protections by frequently altering recruitment rules to exclude existing employees.
• The respondents had legitimate expectations of continued employment, given their past service and the provisions of the recruitment rules.

3. Legality of SAI’s Attempt to Recall Its Commitment Before the High Court

• The Court held that once SAI’s counsel had made a concession before the Delhi High Court, the organization could not subsequently challenge that order.
• Judicial estoppel prevented SAI from retracting its commitment unless fraud or deception was involved, which was not the case here.
• The recall applications filed by SAI were thus correctly dismissed by the High Court.

Final Verdict

The Supreme Court dismissed SAI’s appeal and upheld the CAT and Delhi High Court’s rulings. It directed SAI to recognize the respondents as “initial constituents” and treat them as regular employees under the 2022 Rules.

Implications and Significance

1. Strengthening Employee Rights: The judgment reinforces protections for employees against arbitrary termination during cadre restructuring.
2. Ensuring Administrative Fairness: Government bodies must adhere to principles of fairness and cannot bypass employee protections through repeated policy changes.
3. Judicial Estoppel in Administrative Law: The ruling establishes that a government agency cannot retract commitments made in court without valid justification.

Conclusion

The Supreme Court’s judgment in Sports Authority of India & Anr. v. Dr. Kulbir Singh Rana is a landmark decision in employment law. By upholding the principle of “initial constitution,” the Court ensures that employees who have served under prior regulations are not unfairly displaced. This ruling sets an important precedent for cases involving cadre restructuring and recruitment in public sector institutions.

Case Law References

1. Sports Authority of India & Anr. v. Dr. Kulbir Singh Rana, 2025 INSC 319.
2. S.S. Moghe & Others v. Union of India, SCC OnLine SC 1287.
3. Delhi Transport Corporation v. D.T.C. Mazdoor Congress, (1991) 1 SCC 600.
4. K. Ajayan v. Union of India, 2023 SCC OnLine SC 712.
5. B.S. Yadav v. State of Haryana, (1980) 4 SCC 524.