Chandigarh, August 3: The Punjab and Haryana High Court dealt a significant blow to the Aam Aadmi Party government on Monday. The court directed the state government to release the pending dearness allowance (DA) for government employees and pensioners within 15 days. Additionally, the High Court has imposed a ban on large-scale advertising campaigns until the arrears are paid.
The issuance of the DA is expected to incur an estimated cost of ₹14,191 crores.
The division bench, comprising Acting Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor, stated that financial constraints cannot be cited as a reason to deny employees and pensioners their entitled benefits.
The bench remarked, “Until all such dues are cleared, the Punjab state will not engage in any unnecessary expenditures, such as large-scale advertising campaigns in print or social media, as such expenses cannot justify the denial of payment to state employees.”
The court mandated that the payment be made within two weeks, warning that if not complied with, an annual simple interest rate of six percent will be applied to the outstanding amount. A compliance report is to be submitted by the end of this month.
State lawyer Maninderjeet Singh Bedi argued that the single judge’s directive to release the pending DA was beyond jurisdiction.
The High Court had reserved its order on July 22 regarding petitions filed by the state government and Punjab State Power Corporation Limited, challenging the single judge’s order that mandated the release of DA to employees and pensioners by June 30.
The single judge had annulled the state’s liquidation plan dated February 18, 2025, which proposed the payment of pension dues in installments based on age, deeming it arbitrary and a violation of Article 14 of the Constitution.
The single judge instructed the state and PSPCL to issue all pending DA installments to their employees and pensioners at the same rate paid to members of the All India Services working in Punjab.
Employee groups have claimed that the government had formally accepted the payment of DA in line with the central government but has delayed payment citing financial difficulties. The state government had issued a structured plan for the payment of dues on February 18, 2025, considering the state’s economic situation and with the approval of the state cabinet.
In its affidavit to the High Court, the state revealed that the total expenditure on the payment of revised salaries, pensions, family pensions, and leave encashment dues amounts to approximately ₹14,191 crores.
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