Case Summary: State of West Bengal & Anr. v. Confederation of State Government Employees, West Bengal & Ors. (2026) | Dearness Allowance

The Supreme Court judgment in State of West Bengal & Anr. v. Confederation of State Government Employees, West Bengal & Ors. marks a decisive moment in Indian service jurisprudence. The dispute revolved around the non-payment and differential payment of Dearness Allowance (DA) to employees of the Government of West Bengal for the period 2008–2019. The litigation addressed foundational issues concerning the legal character of DA, the impact of financial constraints on statutory obligations, and the relationship between inflation-linked wages and the right to live with dignity under Article 21 of the Constitution.

The Court examined these issues through a constitutional lens grounded in the principles of human dignity, welfare state responsibilities, and fiscal federalism, ultimately delivering an authoritative pronouncement on the nature and enforceability of Dearness Allowance.

Court: Supreme Court of India

Citation: SLP(C) Nos. 22628-22630 of 2022

Judges: Justice Sanjay Karol, Justice Prashant Kumar Mishra

Date of Judgment: February 5, 2026

Factual Background

To offset inflationary erosion of salaries, DA is periodically revised based on the All-India Consumer Price Index (AICPI). The West Bengal Government constituted the Fifth Pay Commission (2008) which recommended revision of pay and DA in line with Central Government patterns. These recommendations were implemented through the West Bengal Services (Revision of Pay and Allowance) Rules, 2009 (RoPA Rules).

However, despite issuing notifications enhancing DA from time to time, the State failed to pay the full arrears and did not follow the bi-annual revision pattern adopted by the Centre. Employees alleged that while Central employees received DA up to 125%, State employees were paid substantially lower rates (around 75%), creating discrimination and hardship.

Representations made in 2016 were ignored, leading employee unions to approach the West Bengal Administrative Tribunal, which dismissed their claim, holding DA to be a matter of State discretion. The High Court reversed this view in the first round, recognising DA as a legal right and remanded limited issues to the Tribunal. On remand, the Tribunal directed the State to evolve norms for DA payment based on AICPI and to clear arrears. The State again approached the High Court, which affirmed the Tribunal’s directions. These concurrent findings were challenged before the Supreme Court.

Issues

• Whether Dearness Allowance is a legally enforceable right or a discretionary benefit?
• Whether non-payment of DA violates Article 21 (right to live with dignity)?
• Whether financial inability of the State can defeat employees’ statutory entitlements?
• Whether employees posted outside West Bengal could be paid higher DA than those within the State?
• Scope of judicial review over fiscal policy relating to salary components.

Arguments

Employees’ Contentions

• DA is part of “existing emoluments” under RoPA Rules and hence statutory.
• Inflation diminishes real wages; DA neutralises this effect and is integral to the right to livelihood.
• Differential DA between Central and State employees, and even among State employees posted in Delhi/Chennai, is arbitrary under Article 14.
• Financial constraints cannot nullify vested rights.

State’s Contentions

• DA depends on fiscal capacity and is not a fundamental right.
• Central and State services form different classes; parity cannot be claimed.
• Courts should not interfere in economic policy decisions.
• Tribunal lacked jurisdiction as the RoPA Rules were framed under Article 309.

Findings and Reasoning

A. Nature of Dearness Allowance

The Court traced the concept of DA as a mechanism to neutralise inflation and preserve purchasing power. It held:

• Under Rule 12 of RoPA Rules and government memoranda, DA stood expressly recognised as a component of pay.
• Once accepted by statutory rules, DA ceases to be a bounty and becomes an enforceable entitlement.

B. Link with Article 21

A significant constitutional dimension was added. Relying on precedents such as Francis Coralie Mullin and Common Cause, the Court held:

• Right to life includes the right to live with dignity, adequate nutrition and shelter.
• Salaries eroded by inflation without DA would reduce employees to “mere survival”.
• Hence, DA is not a charity but a constitutional imperative to maintain dignified living standards.

C. Financial Constraints No Defence

The Court categorically rejected the plea of paucity of funds:

• Fiscal difficulty cannot override statutory and constitutional obligations.
• The State must prioritise employee entitlements before other expenditures.
• Administrative convenience cannot defeat accrued rights.

D. Parity and Discrimination

• Payment of Central-rate DA to State employees posted in Delhi/Chennai while denying it to those in West Bengal was held arbitrary.
• Place of posting is not a rational basis for differential treatment when recruitment and service conditions are identical.

E. Judicial Review

While acknowledging limited review over economic policy, the Court held that:

• Once a policy is codified in rules, courts can enforce compliance.
• The present issue was not policy wisdom but non-implementation of declared policy.

Directions Issued

The Supreme Court affirmed the High Court and Tribunal and directed:

1. The State to evolve norms for DA computation based on AICPI (1982=100).
2. DA to be released at least twice a year till implementation of the Sixth Pay Commission.
3. Arrears from 2008 onwards to be paid within one year, either in cash or by GPF credit.
4. No recovery from employees already paid higher DA outside the State.
5. Compliance within specified timelines.

Conclusion

The decision is a milestone in service jurisprudence. It reinforces that a welfare state cannot allow its employees’ living standards to decline through inflation while withholding DA already promised under statutory rules. By connecting DA with dignity and livelihood, the Court expanded the social content of Article 21 and imposed accountability in fiscal governance.

The judgment will have a far-reaching impact on pending DA disputes across States and underscores that economic governance must conform to constitutional morality.

Important Link

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