The Punjab and Haryana High Court on Monday directed the Punjab government to clear all pending dearness allowance (DA) dues of its employees and pensioners within two weeks, while restraining it from incurring "unproductive expenditures" such as large-scale advertising campaigns until the dues are fully paid.

A division bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor dismissed appeals filed by the Punjab government and the Punjab State Power Corporation Ltd. (PSPCL) challenging a single-judge order directing the release of DA arrears.

The Court directed the Chief Secretary of Punjab to ensure strict compliance with its directions and submit an affidavit detailing compliance before the Registry by August 31, 2026.

In a significant observation, the bench stated that the State should refrain from spending public funds on non-essential activities, including extensive print and social media advertising, until all admissible dues of employees and pensioners are cleared.

The Court further warned that if the DA arrears are not paid within the stipulated two-week period, the outstanding amount will attract simple interest at the rate of 6% per annum, payable by the State.

During the hearing, counsel for the employees' organisations, Sunny Singla, argued that instead of complying with the single-judge's April 8 order directing payment of DA arrears by June 30, 2026, the State chose to file appeals.

The Punjab government had defended the delay by citing its strained financial condition. However, the High Court rejected this contention. The petitioners informed the Court that DA instalments due from July 1, 2023, remain unpaid to serving employees as well as pensioners.

The ruling comes months ahead of the Punjab Assembly elections, which are scheduled to be held in early 2027.