Chandigarh : The Punjab and Haryana High Court has escalated its scrutiny of the Punjab government’s failure to release pending Dearness Allowance (DA) dues to government employees and pensioners, issuing a show-cause notice to Chief Secretary KAP Sinha and directing him to explain why contempt proceedings should not be initiated for non-compliance with its earlier orders.
The latest development came during Tuesday’s hearing before Justice Harsh Bunger, with the Chief Secretary appearing personally before the court. The court directed him to submit his response by November 13 and remain physically present at the next hearing on November 17 at noon. The proceedings follow an earlier order imposing a cost of ₹1 lakh on the Chief Secretary over delays in filing the required response and compliance details.
The court’s action stems from a Division Bench judgment dated August 3, 2026, which had directed the Punjab government and the Punjab State Power Corporation Limited (PSPCL) to release all admissible pending DA and Dearness Relief (DR) instalments to serving employees and pensioners. The payments were to be made at rates equivalent to those applicable to All India Services officers serving in Punjab, within a fortnight, with the deadline expiring on August 18.
The Division Bench had also directed the Chief Secretary to ensure implementation and submit a compliance affidavit by August 31. The order further stipulated that delayed payments would attract simple interest at six per cent annually. However, employees and pensioners subsequently approached the court, alleging that the government had failed to honour the deadline and release their outstanding dues.
The dispute intensified after the state government approached the Supreme Court challenging the August 3 judgment. However, the High Court was informed that the government’s appeal and a separate appeal by PSPCL had remained under procedural defects before the Supreme Court Registry. The court had earlier expressed concern over the delay in removing these defects and questioned the government’s failure to demonstrate compliance with its directions.
On October 28, the High Court imposed a cost of ₹1 lakh on the Chief Secretary and directed him to appear personally on November 3. The latest hearing has now resulted in a show-cause notice over the alleged non-compliance.
During Tuesday’s proceedings, the court also rejected the argument that the provision for six per cent interest on delayed payments gave the government the option of postponing the release of DA arrears. Justice Harsh Bunger observed that interest was intended to compensate employees and pensioners for the delay, not to provide the state with an alternative to complying with the original payment directions.
The court made it clear that the obligation to release the outstanding amounts within the prescribed period remained independent of the government’s liability to pay interest. Accepting the state’s interpretation, it observed, would effectively allow the government to withhold employees’ legitimate dues indefinitely by simply agreeing to pay interest.
The financial implications of the dispute are substantial. Taking note of the Chief Secretary’s status report dated October 30, the court recorded that the outstanding liability relating to the claims was approximately ₹32,418 crore. Matching DA payments to the rates applicable to Central Government employees would involve an additional recurring annual financial burden of around ₹4,712 crore, according to the figures placed before the court.
The court also noted that the state government itself had acknowledged in its status report that the August 3 directions remained binding, had not been stayed and that its liability to pay DA along with applicable interest continued to subsist. Despite this position, the payments had not been made in accordance with the court’s timetable.
The controversy has also brought renewed attention to an earlier and separate judicial development. On October 7, a Division Bench of the High Court had issued a criminal contempt notice to KAP Sinha over an alleged misleading statement concerning the status of the Punjab government’s appeal before the Supreme Court. That proceeding related to the court’s prima facie concern that the Chief Secretary had incorrectly represented that defects in the appeal had been removed. The October 7 notice and the latest show-cause proceedings over non-payment are distinct judicial matters arising from the broader DA dispute.
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For Punjab’s government employees and pensioners, the case is about more than a prolonged administrative and legal disagreement. It concerns the payment of accumulated financial entitlements that affect household budgets, retirement planning and financial security. The government’s challenge before the Supreme Court remains part of the legal dispute, but unless the Supreme Court grants relief or stays the High Court’s directions, the state remains bound by the operative order.
