The Punjab government has moved the Supreme Court against a Punjab and Haryana High Court order directing it to clear all pending dearness allowance (DA) and dearness relief (DR) dues owed to state employees and pensioners within a fortnight, arguing that releasing arrears of around ₹14,191 crore in such a short timeframe is 'constitutionally impossible'.
Challenge to August 3 Judgment
In its special petition, filed through the additional chief secretary of the finance department, the state challenged the August 3 judgment that directed payment of the dues at rates applicable to All India Services officers posted in Punjab. The government argued that the high court had effectively ordered withdrawal of a significant amount from the state's Consolidated Fund without following the constitutionally prescribed procedure.
"Compliance is not merely difficult; it is constitutionally impossible in the time allowed. According to Article 266(3), no money may be appropriated from the consolidated fund of a state except in the manner provided by the Constitution, and that manner is Articles 202 to 206," the plea said.
The high court had also ordered the state to pay 6% simple interest in case of default and restrained it from incurring "unproductive" expenditure until the DA and DR dues were cleared. The state has challenged this restraint, stating that no such expenditure was specifically pleaded or established by evidence.
Dispute Over DA Benchmark
In its petition, the Punjab government argued that its service rules do not require it to pay DA to its employees at the rate announced by the Centre. The Punjab Civil Services (Revised Pay) Rules, 2021, do not prescribe any particular index, formula, rate, or periodicity for calculating DA, leaving the matter to the state government's discretion.
The state also questioned the high court's reliance on the DA paid to All India Services officers as a benchmark for determining the entitlement of state employees. The state contended that All India Services officers receive DA at central rates because their service conditions are governed by Union law, and Punjab has no authority to independently determine their service conditions.
The petition disputed the high court's comparison of its employees' salaries with those of central government employees, saying its existing DA rate of 42% already results in higher aggregate monthly emoluments in five of seven representative categories cited before the court, with the difference ranging from ₹1,832 to ₹17,852 a month.
Comparative Emoluments Data
According to the state's plea, for clerks, Punjab's basic pay is ₹38,600, and total emoluments at 42% DA are ₹54,812, against ₹36,960 for the corresponding central category at 60% DA. Punjab drivers receive total emoluments of ₹40,612 against ₹36,960 for their central counterparts, while stenographers get ₹56,374 against ₹47,360. Punjab ETT teachers receive ₹67,592 compared with ₹65,760 for the corresponding central category, and constables get ₹54,812 against ₹36,960.
The two categories presently short are superintendent, by ₹5,676, and police inspector, by ₹7,372. The state's calculations show these shortfalls would turn into surpluses of ₹4,800 and ₹2,240, respectively.
Cabinet-Approved Payment Plan
The government relied on a Cabinet-approved plan of February 2025 for liquidation of arrears, under which the ₹14,191-crore liability was to be cleared in phases over five financial years. The state said the high court's direction to pay the entire admitted arrears within 14 days ignored this financial plan and constitutional procedure governing withdrawals from the Consolidated Fund.
Punjab has asked the Supreme Court to set aside the August 3 judgment and restore its discretion to determine the DA rate applicable to state employees, as well as the manner and timeline for payment of the pending arrears. The state has also said it is willing to increase DA to the extent needed to ensure parity in the actual take-home salary of comparable state and central government employees.