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I have read and understand 6 months probationary period rule, that employee exceeds 6 months of probationary period shall be regularized otherwise informed by the employer to not continue. Now the question is employee is informed ahead that he/she will be regularized, however wished to decline because he/she doesn't agree with the new contract/rules. Now, does the employee has the right to do so?

Nate Eldredge
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Yes, the employee can choose not to accept the contract offered at the end of the probationary period and thereby allow the probationary period to end without accepting a long-term position.

This is usually called "quitting".