The Punjab and Haryana High Court has directed the Managing Director of the Punjab State Power Corporation Limited (PSPCL) to file a personal affidavit by July 9, clarifying whether the corporation independently takes decisions on the release of Dearness Allowance (DA) to its employees or has been merely following the Punjab Government's decisions. The bench of Acting Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor issued the directive during the hearing of a bunch of Letters Patent Appeals filed by PSPCL and other appellants arising out of litigation over DA and Dearness Relief (DR) payments to PSPCL employees and retirees.
Key Question Before the Court
The court observed that the central issue requiring determination was whether PSPCL—being an independent autonomous body created by the State of Punjab—was following the State government's directions in matters relating to sanction of DA to its employees, or whether such decisions were being independently taken by the corporation at its own level, potentially at variance with the State. The bench noted: "From the submissions advanced before the Court, we find that the PSPCL though is an independent autonomous body, created by the State of Punjab, but in the matter of payment of Dearness Allowance/Dearness Relief, it has consistently been following the policy and decisions of the State of Punjab."
Arguments Presented
Appearing for PSPCL, senior counsel contended that PSPCL is an independent autonomous body with its own rules and regulations governing its employees, and the issue of DA could not have been adjudicated without affording it an adequate opportunity of hearing. Counsel also submitted that PSPCL had merely adopted the Punjab Government's decision contained in an office order dated February 18, 2025, through a finance circular dated April 3, 2025. Opposing the plea, counsel for the respondent-employees submitted that they had challenged the denial of DA at the rates sanctioned to Central Government employees, particularly after the Punjab Government resolved to adopt the Central Government methodology for grant of DA.
Implications of the Ruling
The development is significant as the allowance being distributed to PSPCL employees was distinct from the rate at which it was disbursed to State employees. The bench stated: "This question would be vital as if the PSPCL was taking separate independent decision with regard to payment of Dearness Allowance to its employees, then the decision of the State would not be ipso facto applicable on the State. However, if PSPCL was merely following the decision of the State of Punjab in the matter relating to sanction of Dearness Allowance/Dearness Relief, then the principal issue for adjudication before the Single Judge was the decision of the State of Punjab in not releasing Dearness Allowance to its employees at the rate at which it was being extended to the employees of the Central Government."
Legal Representation
The bench was assisted by senior advocates Chetan Mittal, Rahul Sharma, Chanchal K. Singla, and Sanjay Kaushal; Additional Advocates-Generals Anu Chatrath and Maninder Singh Garcha; and advocates Sunny Singla, Aditya Narayan Arya Garg, A.S. Chadha, Kavita Joshi, Detha Dewan, Ratik Chatrath Kapur, Mehak Kanwar, Riti Aggarwal, Gagneshwar Walia, Fateh Singh Dhillon, and Rashpinder Singh Sohi.
