Chandigarh: The Punjab and Haryana High Court has issued a show-cause notice to Punjab Chief Secretary K.A.P. Sinha, a 1992-batch IAS officer of the Punjab cadre, over the state government’s failure to comply with its directions on clearing pending Dearness Allowance (DA) and Dearness Relief (DR) arrears owed to government employees and pensioners.
Justice Harsh Bunger directed Sinha to file a reply by November 13, explaining why contempt proceedings should not be initiated against him for alleged wilful disobedience of the court’s earlier orders. He has also been directed to remain personally present at the next hearing on November 17.
The court observed that the continued non-compliance by the state government and the Punjab State Power Corporation Limited (PSPCL), despite repeated opportunities, prima facie indicated wilful disobedience of its binding directions.
Why Did the High Court Issue a Contempt Notice?
The proceedings arose from a contempt petition alleging that the Punjab government and PSPCL had failed to implement the High Court’s August 3, 2026, directions concerning the release of pending DA and DR instalments.
The petition was filed by Nirmal Singh Dhanoa and other employees and pensioners, including a retired chief engineer of PSPCL.
On August 3, a Division Bench had directed the state government and PSPCL to release all pending DA and DR instalments to their respective employees and pensioners within a fortnight, at the rates applicable to All India Services officers serving in Punjab, following the Central Government pattern.
The Chief Secretary was also directed to ensure compliance and submit an affidavit before the High Court Registry by August 31.
However, the court was informed that the required compliance report had not been filed and that the payment directions remained unimplemented.
Earlier, High Court Imposed Rs 1 Lakh Cost on Punjab Government
The latest notice follows the High Court’s October 27 proceedings, when it imposed costs of Rs 1 lakh on the state government for failing to file its reply in the contempt petition.
The court had also directed Sinha to appear personally on November 3 and explain the steps taken to implement its earlier directions.
During the November 3 hearing, the Chief Secretary appeared before the court and submitted that the state government’s Special Leave Petition (SLP) challenging the August 3 order had been cleared of procedural defects and was expected to be listed before the Supreme Court shortly after Diwali.
However, counsel for the petitioners pointed out that the appeal had not yet been assigned a case number.
The High Court made it clear that merely approaching the Supreme Court did not suspend the operation of its directions. Unless the Supreme Court granted a stay or modified the order, the state government remained bound to comply.
High Court Questions Punjab’s Argument on 6% Interest
The court also rejected the state’s argument that the provision for six per cent annual interest on delayed DA payments could justify the continued withholding of arrears.
It observed that the interest provision was intended to compensate employees and pensioners for delays, not provide the government with an alternative to complying with the payment directions.
The court questioned whether the state could indefinitely defer payment simply by agreeing to pay interest on the outstanding amount.
It also observed that DA was an entitlement of employees and not a discretionary benefit or charity extended by the government.
The court indicated that if the state was unable to clear the entire outstanding amount at once, it could have proposed a structured instalment-based payment arrangement. However, no concrete proposal had been placed before it.
The state government sought additional time, citing the substantial financial burden involved in clearing the pending dues.
Punjab’s Outstanding DA and DR Liability at Rs 32,418 Crore
A status report submitted by the Chief Secretary before the High Court highlighted the scale of the state’s outstanding financial obligations towards employees and pensioners.
According to the report, the estimated liabilities include:
- DA/DR arrears: Approximately Rs 22,818 crore for the period from July 1, 2021, to September 30, 2026.
- Total pending liability: Approximately Rs 32,418 crore towards employees and pensioners.
- Additional annual expenditure: Around Rs 4,712 crore if DA is paid at the rates prescribed by the Central Government.
The state had also informed the court that it had increased DA for employees and pensioners from 42 per cent to 50 per cent with effect from September 1, 2026. However, the accumulated arrears remained unpaid.
The government has maintained that the financial burden is substantial and that it is pursuing a legal remedy before the Supreme Court.
What Happens Next?
The High Court has directed Chief Secretary K A P Sinha to:
- File a reply by November 13, 2026, explaining why contempt proceedings should not be initiated against him.
- Provide an advance copy of the reply to the petitioners’ counsel.
- Appear personally before the court on November 17, when the matter will be taken up again.
The November 3 order is a show-cause notice and does not amount to a final finding of contempt. The court will consider the Chief Secretary’s response and the steps taken by the state government before deciding the further course of proceedings.
