Chandigarh: The Punjab and Haryana High Court on Tuesday, 3 November issued a show-cause notice to Punjab Chief Secretary K.A.P. Sinha, asking him to explain why contempt proceedings should not be initiated against him over the failure of the Punjab government and the Punjab State Power Corporation Limited (PSPCL) to pay pending Dearness Allowance and Dearness Relief (DA/DR) arrears to employees and pensioners at Central Government rates. Justice Harsh Bunger held 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'. To be clear: this is a notice at the prima facie stage — the court has recorded no finding of contempt.
Source: LiveLaw
Sinha, who appeared in person, accepted the notice in court and sought ten days to reply. His reply must be filed by 13 November 2026, and the matter will be heard again on 17 November 2026 at 12 noon, when he must again appear in person, LiveLaw reported. The IANS news agency, reporting the same hearing, confirmed the contempt notice, Sinha's personal appearance, and that the court expressed strong displeasure over continued non-compliance despite repeated opportunities.
Source: IANS via The Freedom Press
The 6% interest argument — rejected
The State's defence rested on a clause in the Division Bench's 3 August order providing 6% interest on delayed payment: the State argued that if late payment itself carries interest, missing the deadline cannot be wilful disobedience. Justice Bunger rejected the argument, holding that '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', and that the obligation to pay on time was independent of, and in addition to, the interest liability. Accepting the State's reading, the court added, would let Punjab and PSPCL withhold the dues indefinitely merely by agreeing to bear 6% interest.
What the court had already ordered
A Single Judge first directed payment of the DA/DR arrears on 8 April 2026. On 3 August 2026, a Division Bench dismissed the State's and PSPCL's intra-court appeals — led by LPA No. 1437 of 2026 — and directed that all pending DA/DR instalments be released within a fortnight, by 18 August 2026, at the rates paid to All India Services officers serving in Punjab under the Central pattern, with simple interest at 6% per annum on any unpaid amount and a compliance affidavit from the Chief Secretary by 31 August 2026. Until the dues are cleared, the State was also barred from unproductive expenditure such as large-scale advertising campaigns. Days later, on 17 August, the State issued a memorandum stating that no such orders may be implemented without prior concurrence of the Finance Department or generalised directions — a memorandum the court has since asked the administration to explain.
This hearing follows the court's 27 October order in the same case, when it imposed Rs 1 lakh in costs on the Chief Secretary and ordered him to appear in person on 3 November after no compliance report had been filed. Read the earlier development: Rs 1 lakh costs and personal appearance order
The numbers the State itself placed on record
In its status report, the State put the total pending liability at about Rs 32,418 crore — yaani about Rs 324 billion — with a recurring cost of about Rs 4,712 crore a year if DA is paid at Central rates. The report acknowledged, in the State's own words recorded by the court, that the 3 August orders bind it, that there is no stay on their operation, and that its liability to pay DA to employees and pensioners along with 6% interest subsists. It was conceded in court that no compliance affidavit was filed by 31 August and that no compliance has been made. The Rs 1 lakh costs imposed on 27 October have been paid, the court was told, with a receipt filed.
A pending Supreme Court appeal is no shield, court says
Senior Advocate Vikas Singh, for the State and PSPCL, told the court their Special Leave Petition was filed on 1 September 2026 and re-filed on 1 October after the Supreme Court Registry raised objections; the objections have been cured but the petition has not yet been listed, and he sought more time. Senior Advocate Sanjay Kaushal, for the employees, opposed the request, arguing that the mere pendency of an SLP without a stay cannot justify non-compliance. The court agreed, holding that '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', and relied on the Supreme Court's 2026 ruling in Israr Ahmad Khan v. Amarnath Prasad — which deprecated defaulting parties producing a diary or filing number to win repeated adjournments in contempt matters and said High Courts should deal with such litigants 'with an iron hand', more so when they happen to be the State — and on Maninderjit Singh Bitta v. Union of India (2012), which holds that inaction by officers in the highest echelons of government itself amounts to disobedience.
What happens next: the Chief Secretary's reply is due by 13 November and the contempt petition returns to court on 17 November at noon, with Sinha present in person. Unless the Supreme Court stays the 3 August directions in the meantime, the State remains bound to release the arrears — and every month of delay adds 6% annual interest to a liability the government itself has quantified at about Rs 32,418 crore, in a case that directly affects serving Punjab government and PSPCL employees and pensioners waiting on DA instalments the courts have now ordered paid three times since April.