In a relief to nearly 20 lakh government employees, the Supreme Court on Thursday directed the West Bengal government to pay dearness allowance to them for the 2008-to-2019 period, saying it is a legally-enforceable right.
A bench of Justices Sanjay Karol and Prashant Kumar Mishra directed the state government to pay 25 per cent of the outstanding DA to its employees by March 6.
The court said once DA is defined by linking it to the All-India Consumer Price Index (AICPI) as in the statutory rules, the state could not modify the manner of calculating it through later office memoranda.
"To receive dearness allowance is a legally-enforceable right that has accrued in favour of the respondents-employees of the state of West Bengal.... The employees of the appellant-state shall be entitled to release of arrears in accordance with this judgment for the time 2008-2019," the bench said, while holding that the employees are not entitled to DA twice a year.
The apex court said dearness allowance emerges as a practical instrument of protection in the hands of a welfare state, which safeguards its employees from the adverse effects of rising prices.
DA is not an additional benefit but a means to maintain a minimum standard of living, it said.
Considering the financial implications involved, the bench also formed a committee comprising former apex court judge Indu Malhotra, former high court judges Tarlok Singh Chauhan and Goutam Bhaduri and the Comptroller and Auditor General of India or the seniormost officer in his establishment, nominated by him.
The court directed the committee to determine, in consultation with the state authorities, the total amount to be paid and the schedule of payments, and periodically verify the release of the amounts.
The payment of the first instalment, subject to the determination of the committee, should be paid by March 31, it said.
"It stands clarified that those employees of the state who have retired in the pendency of this litigation shall also be entitled to benefits in accordance herewith," the bench said.
It directed the state government to file a status report after the payment of the first instalment and posted the matter for compliance on April 15.
"It is hereby concluded that DA, by its very nature, is non-static, fluid and subject to change. How that change is to be carried out is through the All India Consumer Price Index. The first memorandum as also the subsequent memoranda fall prey to the fatal flaw that they do not make reference to the AICPI, which is absolutely essential to the determination of DA, which in turn is indispensable to the computation of the total amount of 'existing emoluments'.
"As a necessary follow-up thereto, it must be observed that the incorporation of the AICPI cannot be termed as a one-time measure and once DA was defined using it, to take a different path would be impermissible," the bench said.
It said the concept of DA is a distinctly-Indian response to the problem of inflation and its impact on wages, developed to safeguard employees against the steady erosion of their real income caused by rising prices.
The court refused to decide the question whether DA is a facet of Article 21 of the Constitution and should be considered a fundamental right.
The total outstanding DA dues, according to lawyers, is around Rs 41,000 crore.
The controversy began when a section of the West Bengal government employees approached the Calcutta High Court, demanding DA at the same rate as their central government counterparts, along with pending arrears.
In May 2022, the high court ruled in favour of the employees and instructed the state to align its DA with central rates.
However, the West Bengal government challenged the high court's verdict by filing an appeal in the Supreme Court in November 2022.
Since then, the state has implemented only marginal increases in DA, which have not kept pace with the central government's rates.
As of April 2025, while central government employees receive 55 per cent DA, their West Bengal counterparts get only 18 per cent, notwithstanding a recent 4-per cent hike.
A bench of Justices Sanjay Karol and Prashant Kumar Mishra directed the state government to pay 25 per cent of the outstanding DA to its employees by March 6.
The court said once DA is defined by linking it to the All-India Consumer Price Index (AICPI) as in the statutory rules, the state could not modify the manner of calculating it through later office memoranda.
"To receive dearness allowance is a legally-enforceable right that has accrued in favour of the respondents-employees of the state of West Bengal.... The employees of the appellant-state shall be entitled to release of arrears in accordance with this judgment for the time 2008-2019," the bench said, while holding that the employees are not entitled to DA twice a year.
The apex court said dearness allowance emerges as a practical instrument of protection in the hands of a welfare state, which safeguards its employees from the adverse effects of rising prices.
DA is not an additional benefit but a means to maintain a minimum standard of living, it said.
Considering the financial implications involved, the bench also formed a committee comprising former apex court judge Indu Malhotra, former high court judges Tarlok Singh Chauhan and Goutam Bhaduri and the Comptroller and Auditor General of India or the seniormost officer in his establishment, nominated by him.
The court directed the committee to determine, in consultation with the state authorities, the total amount to be paid and the schedule of payments, and periodically verify the release of the amounts.
The payment of the first instalment, subject to the determination of the committee, should be paid by March 31, it said.
"It stands clarified that those employees of the state who have retired in the pendency of this litigation shall also be entitled to benefits in accordance herewith," the bench said.
It directed the state government to file a status report after the payment of the first instalment and posted the matter for compliance on April 15.
"It is hereby concluded that DA, by its very nature, is non-static, fluid and subject to change. How that change is to be carried out is through the All India Consumer Price Index. The first memorandum as also the subsequent memoranda fall prey to the fatal flaw that they do not make reference to the AICPI, which is absolutely essential to the determination of DA, which in turn is indispensable to the computation of the total amount of 'existing emoluments'.
"As a necessary follow-up thereto, it must be observed that the incorporation of the AICPI cannot be termed as a one-time measure and once DA was defined using it, to take a different path would be impermissible," the bench said.
It said the concept of DA is a distinctly-Indian response to the problem of inflation and its impact on wages, developed to safeguard employees against the steady erosion of their real income caused by rising prices.
The court refused to decide the question whether DA is a facet of Article 21 of the Constitution and should be considered a fundamental right.
The total outstanding DA dues, according to lawyers, is around Rs 41,000 crore.
The controversy began when a section of the West Bengal government employees approached the Calcutta High Court, demanding DA at the same rate as their central government counterparts, along with pending arrears.
In May 2022, the high court ruled in favour of the employees and instructed the state to align its DA with central rates.
However, the West Bengal government challenged the high court's verdict by filing an appeal in the Supreme Court in November 2022.
Since then, the state has implemented only marginal increases in DA, which have not kept pace with the central government's rates.
As of April 2025, while central government employees receive 55 per cent DA, their West Bengal counterparts get only 18 per cent, notwithstanding a recent 4-per cent hike.
