Punjab DA Arrears Case: Govt Fixes Retirees’ Gratuity, Core Arrears Order Still Pending
Punjab DA Arrears Case: Days after the state failed to file a court-mandated compliance affidavit on its DA arrears order, the Punjab government returned to the High Court with a notification correcting gratuity calculations for a narrow band of 2020-21 retirees — while the larger, costlier obligation to serving employees and pensioners remains unaddressed.
North Desk Correspondent
Chandigarh, July 7
The Punjab and Haryana High Court on Tuesday took on record a Punjab government notification revising Dearness Allowance calculations used for gratuity and leave-encashment payouts to a specific cohort of retirees, even as the state’s core DA arrears order and the compliance affidavit due on it remain unimplemented.
The matter (Gurvinder Singh petition) came up along with the connected petition (Hardeep Singh petition) before Justice Namit Kumar.
State counsel produced a notification dated July 6, 2026, issued by the Finance Department’s Pension Policy and Coordination Branch, revising the notional DA rate used to calculate gratuity and cash payments in lieu of leave for employees who retired between January 1, 2020 and June 30, 2021.
The notification raises the applicable DA rate for this cohort from the earlier 17% to 21%, 24% and 28% across three six-month bands within that period, describing the correction as a “sympathetic” one-time measure for retirees who had received lower payouts than warranted. Pension Sanctioning Authorities have been directed to clear the resulting benefits within three months of the instruction’s issuance.
Counsel for respondent No. 3 and respondent No. 4 sought time to obtain instructions on releasing the payments to petitioners and similarly situated persons. The matter was adjourned to July 14, 2026.
Punjab DA Arrears Case: Core order still stuck
Tuesday’s development, however, addresses only a narrow slice of the larger DA dispute. It does not touch the more consequential order of April 8, 2026, which directed the state to release 58% DA arrears to all serving employees and pensioners at par with IAS, IPS, IFS and judicial officers — an obligation estimated at roughly Rs 1,400 crore.
As recently as July 2, the court had noted that the April 8 order remained unimplemented, with no affidavit filed by the Principal Secretary, Department of Finance, despite a June 30 deadline the court itself had set. State counsel had sought more time on that occasion as well.
Tuesday’s order carries no reference to that pending affidavit. The state’s movement appears confined to a comparatively narrow, backward-looking correction — for a defined retiree cohort from 2020-21 — while the broader, ongoing and more expensive obligation to current employees and pensioners remains outstanding.
The matter returns on July 14, when both threads — the retiree gratuity correction and the still-missing compliance affidavit on the core arrears order — are expected to come up again.
North Desk has been regularly reporting on the DA case. Here’s a story when the Punjab government opposed DA to its staff and it told the high Court that the 2021 promise was just an endeavour.
Earlier, the government pleaded it had no money. But the High Court rejected it ordering it to make full payment by June 30. In a ruling that cuts through four years of official delay, the court had held that financial difficulty cannot be used to deny employees and pensioners a benefit they are legally entitled to — and that the state’s own conduct had already undermined its case.
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