The Punjab and Haryana High Court has issued notice to the Chief Secretary of Punjab, K.A.P. Sinha, asking him to show cause why contempt proceedings should not be initiated against him.
The notice concerns failure of the State and Punjab State Power Corporation Limited (PSPCL) to pay pending Dearness Allowance/Dearness Relief (DA/DR) to employees and pensioners at Central rates.
Justice Harsh Bunger rejected the State's argument that a clause in the Division Bench's judgment, providing for 6% interest if payment was not made in time, meant that delayed payment could not amount to wilful disobedience.
The Court held, “...the provision for payment of interest was intended to operate as a compensatory measure in favour of the employees and pensioners and not as an alternative mode of compliance available to the respondents. The obligation to release the amounts within the stipulated period was independent of, and in addition to, the liability to pay interest in the event of default.”
Accepting the State's argument, the Court added, would amount to permitting the State of Punjab as well as PSPCL to indefinitely withhold the amounts payable to the employees and pensioners, merely by agreeing to bear the liability of interest at the rate of 6% per annum.
The Court found that the conduct of the State and PSPCL “prima facie reflects wilful disobedience of the specific and binding directions issued by the Hon'ble Division Bench”.
On April 8, 2026, a Single Judge directed the payment of DA/DR arrears. On August 3, 2026, a Division Bench dismissed the State's intra-court appeals, led by LPA No. 1437 of 2026, and modified only the timelines.
It directed the State and PSPCL that it must release all pending instalments of DA/DR to their employees and pensioners at the rates paid to All India Services officers serving in Punjab, in line with the Central Government pattern, within a fortnight, that is, by August 18, 2026.
Any unpaid amount would carry simple interest at 6% per annum from the expiry of that period and the Chief Secretary must file a compliance affidavit by August 31, 2026.
Until the dues are cleared, the State must not spend on “unproductive expenditures, such as large-scale advertising campaigns in print or social media”.
Days after the Division Bench judgment, the State issued a memorandum dated August 17, 2026, stating: “No such orders may be implemented without prior concurrence of the FD or unless generalized directions are issued, whichever is earlier.”
The contempt petition was first listed on August 21, 2026, when the State sought time to file a status or compliance report. On October 27, 2026, nothing had been filed and the State sought further time. The Court called this “totally unjustified”. It directed the Chief Secretary to file a personal affidavit on compliance, and to explain the August 17 memorandum, subject to costs of Rs. 1 lakh payable to the High Court Lawyers Welfare Fund. It also directed him to appear in person.
In the previous hearing, the Chief Secretary appeared in person and filed an affidavit, along with a receipt showing that the costs had been paid. The Court noted that “what has been filed in Court is the status report and not the compliance report.”
The status report put the total pending liability at about Rs. 32,418 crore, with an additional recurring liability of about Rs. 4,712 crore a year if DA is paid at Central rates. It also stated:
“The State acknowledges that the orders dated 03.08.2026 bind it, that there is no stay of their operation, and that its liability to pay the Dearness Allowance to the employees as well as to the pensioners along with interest @ 6%, as directed by the Hon'ble Division Bench, subsists.”
It was conceded before the Court that no compliance affidavit had been filed by August 31, 2026, and that “nor any compliance has been made.”
Senior Advocate Vikas Singh, appearing for the State and PSPCL, submitted that their Special Leave Petition had been filed on September 1, 2026 and re-filed on October 1, 2026 after the Supreme Court Registry raised objections. He said all objections had since been cured but the SLP had not yet been listed, and he sought more time.
Senior Advocate Sanjay Kaushal, for the employees, opposed the request. He argued that the mere pendency of an SLP, without a stay, cannot justify non-compliance.
SLP Without Stay No Shield
The Court relied on the Supreme Court's 2026 decision in Israr Ahmad Khan v. Amarnath Prasad, where it deprecated the practice of defaulting parties producing a diary or filing number of an appeal to obtain repeated adjournments in contempt matters.
It said High Courts should deal with such litigants “with an iron hand”, “moreso when they happen to be 'State'”. The High Court held that these observations were “clearly attracted” to this case, since the State and PSPCL had failed to pursue their appeal despite being given sufficient time.
The Court also relied on Maninderjit Singh Bitta v. Union of India (2012). That decision holds that “inaction or even dormant behaviour by the officers in highest echelons in the hierarchy of the Government” amounts to disobedience, and that even a lackadaisical attitude, though not deliberate, is no defence in contempt.
The Court noted that despite the State's “categorical acknowledgement” that the order binds it, and in the absence of any interim protection from the Supreme Court, the State and PSPCL had not complied. It held:
“Merely pursuing the remedy of Special Leave Petition, without obtaining any order staying the operation of the judgment, cannot furnish a justification for continued non-compliance.”
The Court issued notice of motion to the Chief Secretary, who accepted notice in Court and sought ten days to reply. The reply is to be filed by November 13, 2026.
The matter will be heard on November 17, 2026 at 12 PM, and the Chief Secretary must again appear in person.