The Supreme Court on Thursday directed the West Bengal government to clear at least 25% of the pending Dearness Allowance (DA) dues to the state employees by March 31 of 2026. The apex court also ordered that the employees are entitled to DA calculated strictly in accordance with the West Bengal Services (Revision of Pay and Allowances) Rules, 2009, for the period between 2008 and 2019.
A bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra held that DA must be calculated using the All-India Consumer Price Index (AICPI), as prescribed in the statutory rules. The Court clarified that once the rules linked DA to the AICPI, the State government could not alter the method of calculation through subsequent office memoranda.
“DA, by its very nature, is non static, fluid and subject to change. How that change is to be carried out is through the AICPI. The first memorandum as also subsequent memoranda fall prey to the fatal flaw that they do not make reference to the AICPI which is absolutely essential to the determination the DA which, in turn is indispensable to the computation of the total amount of existing emoluments. As a necessary follow up thereto, it would be observed that the incorporation of AICPI cannot be termed as a one-time measure, and once DA was defined using it, to take a different path would be impermissible in law”, the Court held.
This comes on the day when the Trinamool Congress-ruled government is set to present the state budget in Bidhan Sabha.
The Court partially upheld the Calcutta High Court’s earlier decision directing the West Bengal government to pay DA based on the AICPI average (1982=100), as mandated under the ROPA 2009 rules. It affirmed that DA became a legally enforceable right for permanent state employees once incorporated into the ROPA framework.
However, the Court also partly allowed the State’s appeal by holding that employees were not entitled to receive DA twice a year merely because the Central Government followed that pattern.
The dispute arose from alleged delays and non-payment of DA under ROPA 2009. Employees’ unions had approached the West Bengal Administrative Tribunal in 2016, claiming that the State failed to release DA despite linking it to the AICPI average of 536 (1982=100). They also alleged discrimination, stating that employees posted outside the State, including at Banga Bhawan in New Delhi and the Youth Hostel in Chennai, were receiving DA at Central Government rates.
The Court observed that subsequent memoranda issued by the State revising DA contained a “fatal flaw” as they did not refer to the AICPI. It held that deviation from the AICPI-based framework without a rational basis amounted to manifest arbitrariness under Article 14 of the Constitution.
“In the present facts, since the legislative exercise did incorporate AICPI into the framework, deviation therefore from without any basis falls in the lacking of reasoned principle prone to manifest arbitrariness passed from legislative competence. For the appellant state to have deviated from the recognized position to something else without laying groundwork therefore compromises the exercise, rendering it capricious”, the Court held.
The Court further stated that once ROPA 2009 recognised the AICPI as the basis for DA computation, employees acquired a legitimate expectation that the formula would be followed.
It also clarified that financial constraints cannot be used as a ground to deny payment once a legal right to DA has accrued.
“We have elaborately discussed that once there is a right which is conferred upon a person, then fiscal policy cannot be come in the way of the disbursement of such rights”, the Court held.
Arrears and implementation timeline
The Supreme Court ruled that employees are entitled to arrears of DA for the period from 2008 to 2019. It rejected the State’s argument of delay and laches, noting that employees had continuously pursued their claims and that DA claims are recurring in nature.
The Court also directed that any amounts already paid under interim orders or pursuant to the judgment would not be recovered, even if the law changes later. Retired employees are also entitled to benefits under the judgment.
To ensure implementation, the Court constituted a committee comprising Justice Indu Malhotra (former Supreme Court judge), former Jharkhand High Court Chief Justice Tarlok Singh Chauhan, former judge Gautam Bhiduri, and the Comptroller and Auditor General of India or a nominated senior officer.
The committee will determine the total amount payable and set a payment schedule in consultation with the State government. The exercise must be completed before March 6, 2026, and the first instalment is to be paid by March 31, 2026.
The State has been directed to provide full logistical support and bear all related expenses. The committee will submit a final status report after the first instalment is paid, detailing calculations, payment schedules, and compliance status.
The bench ordered a formation of four-member committee to decide on remaining 75% of DA.
