SC: Adopting Dearness Allowance as revised by Central Govt. not binding on State Govt.

The Hon’ble Supreme Court, on 13th February 2019, in the matter of Tamil Nadu Electricity Board rep. by its chairman v. Tneb-Thozilalar Aykkiya Sangam by its general secretary pronounced that there is no rule or obligation on the State Government to always adopt the Dearness Allowance as revised by the Central Government. It should be looked from the financial position of the State Government to adopt its own rates/revised rates of Dearness Allowance.

The Hon’ble Supreme Court observed that:

Each State Government following their own rate of Dearness Allowance payable to their employees may be adopting the revised Dearness Allowance of the Central Government. There is no rule or obligation on the State Government to always adopt the Dearness Allowance as revised by the Central Government. It is absolutely not necessary for the State Government to adopt the Dearness Allowance rates fixed by the Central Government. It should be looked from the financial position of the State Government to adopt its own rates/revised rates of Dearness Allowance. (Para 22)

Keeping in view the extremely difficult financial position of the State Government, the Electricity Board can revise the Dearness Allowance rate and such revision cannot be said to be arbitrary or without any reason (This inference has been drawn on the basis of Para 22 and Para 24)

It is within the power of the state electricity board to set a cut-off date for payment of revised Dearness Allowance keeping in view its financial constraints. (Para 28)

Copy of judgement:Judgement_13-Feb-2019

-Tushar Kaushik

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