The Punjab government has moved the Supreme Court against a Punjab and Haryana High Court order directing it to clear pending dearness allowance (DA) and dearness relief (DR) dues to state employees and pensioners within 14 days.
The state has argued that paying arrears estimated at around Rs 14,191 crore within such a short period is not merely difficult but constitutionally impossible, according to Mint.
The special leave petition, filed by Punjab's additional chief secretary of finance, challenges the High Court's August 3 judgment. The High Court had directed the state to pay DA and DR at rates applicable to All India Services officers posted in Punjab.
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Punjab's primary objection is linked to the constitutional process for withdrawing money from the state's Consolidated Fund.
The government has cited Article 266(3), which requires withdrawals from the Consolidated Fund to follow the procedure laid down under Articles 202 to 206 of the Constitution. According to the state's petition, releasing ₹14,191 crore within 14 days without following this process cannot be legally done.
Punjab also pointed to a liquidation plan approved by its Cabinet in February 2025. Under the plan, the outstanding arrears were to be cleared in stages over five financial years rather than through a one-time payment.
The High Court had also ordered Punjab to pay 6 per cent simple interest if it failed to comply with the deadline. It further restrained the state from undertaking “unproductive” expenditure until the dues were cleared.
The state has also challenged the basis used by the High Court to determine the DA payable to Punjab government employees.
According to the petition, the Punjab Civil Services (Revised Pay) Rules, 2021, do not prescribe a specific index, formula, rate or frequency for calculating DA. Punjab therefore maintains that the state government has the discretion to decide the applicable DA rate.
It has also questioned the use of DA paid to All India Services officers as a benchmark. Punjab argued that IAS and other All India Services officers receive DA at Central rates because their service conditions are governed by Union laws.
The state further claimed that its existing DA rate of 42 per cent already results in higher monthly aggregate pay than comparable Central categories in five of the seven categories cited before the court.
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In the remaining two categories, Punjab said the gap would also turn into a surplus under the state's proposed calculations.
Punjab has asked the Supreme Court to set aside the High Court's order and restore the state's discretion to determine DA rates and the timeline for clearing arrears.
The government has also challenged the restriction on “unproductive” expenditure, arguing that such spending was neither specifically established nor supported by evidence before the High Court, Mint reported.
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