In Brief
Government employees of West Bengal sued for unpaid dearness allowance (DA) arrears from 2008–2019. The State argued DA payments were discretionary and limited by fiscal capacity. The Supreme Court held that DA is a statutory entitlement under West Bengal's 2009 pay revision rules, computed using a nationally-standardized inflation index (AICPI). The Court rejected the State's financial inability as a defence to statutory obligations, affirmed employees' established legal right to DA, and held DA calculations must follow AICPI methodology. A monitoring committee was appointed to oversee structured payment of arrears totalling thousands of crores over time.
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