In Brief
The Tamil Nadu Electricity Board (TNEB) appealed against High Court orders directing it to pay Dearness Allowance at enhanced rates from 01.01.2002. Under a 1998 settlement, the Board agreed to match the State Government's DA rates. While the Central Government raised DA to 49% in January 2002, the State Government—facing financial crisis—paid only 45% until October 2002. The Board followed the State Government rate. The Supreme Court held that the Board lawfully followed the settlement terms and State Government rates. DA revision depends on an employer's financial position. The Board, funded by the State, could not pay more than the State Government. The Court set aside the High Court's judgment, allowing the appeal.
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