The Punjab and Haryana high court on Monday directed the Punjab government to clear pending dearness allowance (DA) of employees and pensioners within a fortnight.
The high court bench of acting chief justice Ashwani Kumar Mishra and justice Rohit Kapoor also ordered that till all such dues are cleared, the government would not “resort to any unproductive expenditures”, such as large-scale advertising campaigns in print or social media, as these expenses cannot justify the denial of dues admissible to state employees. In default, the unpaid amounts would carry 6% interest per annum. The chief secretary has been asked to ensure scrupulous compliance and file an affidavit about it by August 31.
According to the state government, Punjab already bears the highest salary and pension liability among major Indian states and implementation of the judgment is expected to further increase this burden, reducing the fiscal space available for capital and developmental expenditure. The government’s estimates are that the arrear amount would be of ₹14,000 crore.
The court dismissed appeals from the state government and Punjab State Power Corporation Limited (PSPCL) challenging the June 30 deadline fixed by the single-judge bench. The single-judge order had come on April 8 on a clutch of petitions from employees and pensioners seeking the court’s intervention on the delay in disbursal of DA as per the 6th Punjab Pay Commission recommendations.
According to the court order, “The State of Punjab and PSPCL are directed to grant and release all up-to-date pending instalments of dearness allowance/dearness relief (DA/DR) to all its employees and pensioners, respectively, at the same rates as has been paid to the members of the All India Services (IAS/IPS/IFS) serving within the State of Punjab, in accordance with the Central Government pattern, within a fortnight.”
Govt stance
{{/usCountry}}Govt stance
{{/usCountry}}A government spokesperson said, employees in Punjab have historically received salaries substantially higher than their central government counterparts, with staffers in several cadres drawing 30% to 70% higher pay. Despite providing DA at 42%, compared to the central government’s 60%, Punjab government employees in many categories continue to receive higher aggregate monthly salaries.
The state government has maintained that the higher central government DA rate cannot be applied on top of Punjab’s already higher pay scales, as the two pay structures cannot be combined.
The government had argued that pay commission recommendations are not binding and the employees and pensioners have no legal right seeking enforcement on par with central government employees. It was also argued that the state has prepared a phased liquidation of arrears plan in a structured and time-bound manner.
“…all the welfare measures, including health, education, social schemes are being carried out from this public exchequer only. Thus, disparity can give rise to slowed growth of the state as compared to its peers,” it was submitted, adding that there is no rule that DA is to be granted on central pattern and if directed by the court, it would amount to directly exposing fiscal policy of the state to judicial review, which is against the law.
State bound by 2021 policy decision: HC
The court observed that Punjab has All India Services officers who are paid DA/DR at the central rates as notified by the Centre, and the state exchequer bears this payment. The direction in the single-judge order pegging the release to the rates applicable to IAS/IPS/IFS officers is nothing but a direction to apply, even-handedly, the very standard the state already applies.
“..we are of the considered opinion that the State/PSPCL would be bound by its policy decision of adopting the central government pattern for payment of DA/DR, and cannot be permitted to pay the same in a staggered manner over a period of five financial years, by adopting a discriminatory approach and pay the amount of arrears for the pensioners below the age of 75 years, over as many as 42 instalments, and that too without interest,” it said rejecting the liquidation plan proposed by the government.
Rejecting the state’s argument on the judgment entering into the fiscal policy arena, the court said that the judgment does not formulate fiscal policy, nor does it fix a rate of DA of the court’s choosing. “It does not direct adoption of the central pattern as a matter of judicial preference. To the contrary, it enforces the standard which the state itself chose in 2021 and has applied ever since….That is not an incursion into policy, rather it is a classic example of judicial review, where circumstances so warrant,” it noted.
While rejecting the state’s argument of financial burden, the court noted that Punjab has an annual salary and pension outgo of approximately ₹58,064 crore, and an arrear liability of ₹14,191 crore. “.. (it) establish[es] the magnitude of the obligation, not the impossibility of performing it, and the law on the point is definite. Financial constraint may be a relevant consideration in structuring a scheme prospectively, but it is no answer to the enforcement of benefits which have accrued under an adopted standard,” it asserted.