The main legal principle established in the judgment is the entitlement of a workman to gratuity under the Payment of Gratuity Act, 1972 for the daily wage period and under the CCS (Pension) Rules, 1972 for the period after regularization, along with the statutory compulsion for payment of gratuity with interest.

Rajiv Sharma, J.

1. By way of this petition the State has challenged the orders passed by the Appellate Authority dated October 24, 2003 and the Labour Officer-cum-Controlling Authority, dated September 23, 2002. The brief facts necessary for the adjudication of this petition are that the respondent-workman has served the Himachal Pradesh Irrigation and Public Health Division, Sarkaghat, as daily wage worker w.e.f. March, 1982 to December 31, 1993 and thereafter his services were regularized as water guard-helper from January 1, 1994. He retired from service after attaining the age of superannuation on October 31, 2001. He submitted an application under Sub-rule (10) of Rule 7 of the Payment of Gratuity Act, 1972 on November 27,2001 to the Executive Engineer, 1 & PH Division, Sarkaghat. He was paid a sum of Rs. 17,269/- as terminal gratuity. The respondent herein will be addressed as. 'workman' for convenience.

2. The workman filed claim before the Labour Officer-cum-Controlling Authority (under the Payment of Gratuity Act, 1972), Mandi under sub-rule (1) of Rule 10 of the Himachal Pradesh Payment of Gratuity Rules, 1972. The gist of the claim before the Labour Officer was that the employer has not included the period of daily wages service from March, 1982, to December 31, 1993.

3. The Executive Engineer, Irrigation and public Health division Sarkaghat sent a letter to the Labour Officer-cum-Controlling Authority on August 16, 2002 mentioning therein, that the petitioner was only entitled to sum of Rs. 17,269/-.

4. The Labour Officer has adjudicated upon the application preferred by the workman and consequently directed the Executive Engineer, Irrigation and Public Health Division, Sarkaghat to pay the workman an amount of Rs. 36,604/- within thirty days of the receipt of the notice on September 23, 2002, failing which the employer was liable for 9% simple interest for further delay of the payment from the date of the order.

5. The petitioner-State filed an appeal before the Appellate Authority. The Appellate Authority vide order dated October 24, 2003 rejected the plea of the employer i.e. the Executive Engineer, Irrigation and Public Health Division, Sarkaghat, Mandi and held that Irrigation & Public Health Department is covered under the Payment of Gratuity Act, 1972. The Appellate Authority has categorically held that the workman was entitled for gratuity for daily wage period of service under the provisions of Gratuity Act, 1972 with compound interest @ 10% per annum. The Appellate Authority had also consequently modified the order dated September 23, 2002 and directed that amount of gratuity Rs. 28,771/- and compound interest amounting to Rs. 6042/- was due to the workman w.e.f. December 1, 2001. In nut-shell, the workman was held entitled to the payment of Rs. 34,813/-.

6. Mr. M.S. Chandel, learned advocate General has 'strenuously urged that the provision of Payment of Gratuity Act, 1972 cannot be invoked by the respondent-workman because the Irrigation & Public Health Department does not fall within the scope of Section 1(3) of the Act

Section 1(3) provides that the Act will, apply to:

(a) every factory, mine, oilfield, plantation, port and railway company:

(b) every shop or establishment within the-meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on day of the preceding twelve months:

(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.

7. The Controlling Authority under the Payment of Gratuity Act, 1972 has held that the H.P. Irrigation and Public Health Department is an establishment within the purview of Payment of Gratuity Act. 1972. The Controlling Authority while coming to this conclusion has relied upon the judgment of Hon'ble