The Supreme Court of India has ruled in favor of West Bengal government employees in a long-standing dispute over the payment of Dearness Allowance (DA) arrears, stating that the state government cannot use a lack of funds as a reason to deny employees their rightful dues. The court emphasized that a government must act as a 'model employer'. The bench, comprising Justices Sanjay Karol and Prashant Kumar Mishra, delivered the verdict on Thursday, directing the state government to release 25% of the outstanding DA arrears to its employees immediately.

The dispute concerns DA arrears from 2008 to 2019, which has resulted in a 40% gap between the DA received by state government employees and those employed by the central government. The Supreme Court has stated that the employees of West Bengal are entitled to the release of these arrears. The court also stated that receiving dearness allowance is a legally enforceable right. Furthermore, the Supreme Court underscored that DA is a means to maintain a minimum standard of living and not an additional benefit.

To oversee the process, the court has established a committee headed by former Supreme Court Justice Indu Malhotra, along with Justices Tilak Singh Chauhan and Gautam Maghuria. This committee is responsible for determining the total arrear amount and creating a definitive payment schedule by March 6. The court has directed that the first installment of the remaining 75% must be cleared by March 31, with a compliance report due by April 15, the date of the next hearing. The verdict is expected to benefit approximately 12 lakh current and retired employees, including those who retired while the litigation was pending.

The Supreme Court underscored that DA, once incorporated into statutory service rules, becomes a legally enforceable right, and cannot be denied or deferred due to financial constraints. The court noted that the method of calculating DA with reference to the All-India Consumer Price Index (AICPI) was consciously adopted by the State in the West Bengal (Revision of Pay and Allowance) Rules, 2009. Having done so, the state could not deviate from that formula through a series of executive or clarificatory memoranda. The bench termed the state's deviation as manifestly arbitrary and capricious.

Following the Supreme Court's order, West Bengal Chief Minister Mamata Banerjee stated that the state government would consult its lawyers to determine the next course of action. She also announced the formation of a committee headed by the state's Chief Secretary to review the judgment.

The Supreme Court's ruling has sparked optimism among fixed-pay government employees in Tripura, who are engaged in a similar legal battle. Employee organizations believe that the judgment establishes that governments cannot evade their constitutional obligations toward employees.