State of West Bengal & Anr. v. Confederation of State Government Employees, West Bengal & Ors

 Dearness Allowance, once statutorily recognised and accepted by the State, constitutes an enforceable service entitlement grounded in Article 309 and informed by Article 21; fiscal constraints cannot justify arbitrary deferment or denial contrary to the governing rules.

 

Background

The dispute concerns the non-payment and delayed payment of Dearness Allowance (DA) to employees of the Government of West Bengal for the period 2008–2019. After acceptance of the Fifth Pay Commission recommendations and promulgation of the West Bengal Services (Revision of Pay and Allowance) Rules, 2009 under Art. 309 Const. of India, DA was recognised as part of “existing emoluments”. Employees challenged the State’s failure to release DA in accordance with inflation-linked norms. The matter traversed two rounds before the High Court and one remand to the Administrative Tribunal, culminating in directions to evolve norms based on AICPI and release arrears. The State appealed.

 

Issues Framed

1. Whether DA payable under the RoPA Rules constitutes a legally enforceable right of State employees.
2. Whether DA can be denied, deferred, or paid arbitrarily on the ground of fiscal incapacity.
3. Whether payment of DA must be determined on an objective inflation-linked basis (AICPI).
4. Whether the High Court erred in treating DA as a facet of Art. 21 Const. of India.
 

Court’s Reasoning

(i) Statutory Character of Dearness Allowance

The Court held that once the State, exercising power under Art. 309 Const. of India, framed the RoPA Rules and expressly included DA within “existing emoluments”, DA ceased to be a matter of discretion or bounty. Acceptance and implementation of the Fifth Pay Commission recommendations converted DA into a statutory service condition. The Tribunal’s initial view that DA was merely discretionary was therefore erroneous.

(ii) Inflation Neutralisation and Objective 

DA was reaffirmed as an instrument to neutralise erosion of real wages due to inflation. The Court approved the Tribunal’s and High Court’s reliance on the All India Consumer Price Index (AICPI) as an objective and uniform measure. The State itself had historically followed the same index and methodology as the Central Government. In the absence of any alternative principled method placed on record by the State, deviation or ad hoc deferment was held to be arbitrary.

(iii) Fiscal Constraints and Limits of Executive Discretion

The Court emphatically rejected the plea that paucity of funds could defeat an accrued statutory right. While fiscal policy lies primarily within the executive domain, once a legal right crystallises under statutory rules, financial hardship cannot justify non-compliance. Permitting such a defence would render Art. 309 nugatory and allow the State to selectively suspend service benefits.

(iv) Article 21 and Dignity of Labour

The Court endorsed the High Court’s reasoning that DA, though statutory in origin, is closely connected to the right to live with dignity under Art. 21 Const. of India. By ensuring minimum purchasing power in an inflationary economy, DA safeguards the material conditions necessary for dignified existence. However, the Court clarified that DA is not an independent fundamental right; its enforceability flows primarily from statute, with Article 21 supplying constitutional context and interpretive support.

(v) Equality and Uniformity

Differential treatment in DA disbursement—whether by delay, regional posting, or inconsistent periodicity—was held to offend Art. 14 Const. of India when unsupported by rational criteria. Inflation being nationally determined, the State could not justify inconsistent application of the same index.

 

Decision 

The appeals filed by the State were dismissed. The directions of the High Court and Tribunal requiring the State to evolve norms based on AICPI, pay DA periodically, and clear arrears within stipulated timelines were upheld. Contempt petitions were directed to be dealt with in light of compliance. 

 

Ratio

Once Dearness Allowance is statutorily recognised under rules framed pursuant to Art. 309 Const. of India and accepted by the State, it becomes an enforceable service entitlement; executive discretion or fiscal incapacity cannot justify arbitrary deferment or denial, and DA must be determined on an objective inflation-linked basis consistent with constitutional guarantees of equality and dignity.

 

Case Details

• Citation: 2026 INSC 123
• Decided on: 05 February 2026
• Case Title: State of West Bengal & Anr. v. Confederation of State Government Employees, West Bengal & Ors.
• Court: Supreme Court of India
• Bench: Sanjay Karol, J.; Satish Chandra Sharma, J.

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