In a major ruling affecting thousands of government employees, the Supreme Court has held that Dearness Allowance (DA) is a legally enforceable right and not a discretionary benefit. The judgment came in appeals filed by the State of West Bengal challenging earlier orders directing payment of DA arrears to state employees.
The bench, led by Justice Sanjay Karol, partly allowed the State’s appeals but ultimately upheld employees’ entitlement to arrears linked to inflation-based calculations.
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Background of the Case
The dispute traces back to the West Bengal government’s implementation of the Revision of Pay and Allowance Rules, 2009 (RoPA Rules). These rules revised salaries and allowances, including DA, with retrospective effect from January 2006.
Dearness Allowance is an additional amount paid to employees to protect them from the impact of rising prices. The court described DA as a mechanism to ensure employees maintain a minimum standard of living amid inflation.
The conflict arose when state employees alleged that DA was either delayed or paid at rates lower than those paid to central government employees between 2008 and 2019. They approached the Administrative Tribunal claiming that inflation had steadily reduced their real income.
The tribunal initially dismissed the claim, stating that DA was not a legal right but a policy decision of the government. However, the Calcutta High Court later overturned this view, recognising DA as part of pay and directing the State to pay arrears.
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Proceedings Before the Supreme Court
The State government challenged the High Court’s verdict, arguing that payment of DA depended on available financial resources and that employees were not entitled to DA at rates equivalent to central government employees.
Employees’ unions countered that once the government accepted pay commission recommendations and incorporated DA into statutory rules, it became a legally enforceable entitlement. They argued that DA compensates employees for inflation and cannot be denied arbitrarily.
Court’s Observations
The Supreme Court undertook a detailed examination of constitutional principles, statutory rules, and past judicial precedents.
The bench emphasised the role of the State as a welfare institution and noted that inflation significantly erodes purchasing power. It observed that DA helps preserve human dignity by ensuring employees can meet basic needs such as food, clothing, shelter, and healthcare.
The court also noted that the RoPA Rules explicitly incorporated inflation measurement through the All-India Consumer Price Index (AICPI). Therefore, DA calculation could not be detached from this index.
The bench stated, “To receive dearness allowance is a legally enforceable right that has accrued in favour of the respondents-employees.”
On the State’s financial difficulty argument, the court observed that lack of funds cannot defeat a legal entitlement already recognised under statutory rules and administrative memoranda.
However, the court clarified that employees cannot automatically claim DA at the exact rate paid to central government staff unless mandated by law.
Findings on Delay and Legal Rights
The State had argued that employees approached courts after a long delay. Rejecting this claim, the court noted that the cause of action continued due to persistent non-payment.
The bench remarked that employees had consistently pursued legal remedies, and therefore, their claims could not be dismissed on grounds of delay or laches.
Supreme Court’s Decision
The Supreme Court partly allowed the appeals while confirming employees’ entitlement to DA arrears.
The court held that:
- Payment of DA is a legally enforceable right for West Bengal government employees.
- DA must be calculated based on the AICPI as incorporated in the RoPA Rules.
- Employees are entitled to arrears for the period between 2008 and 2019.
To ensure implementation, the court directed the constitution of a monitoring committee headed by a retired Supreme Court judge. The committee has been tasked with determining the total payable amount, preparing a payment schedule, and verifying periodic disbursement.
The court also ordered that the first instalment of payments, subject to the committee’s determination, must be released by March 31, 2026.
Case Title: State of West Bengal & Anr. vs Confederation of State Government Employees, West Bengal & Ors.
Case No.: Civil Appeal arising out of SLP(C) Nos. 22628-22630 of 2022 & connected matters
Decision Date: 06-Feb-2026
