The main legal point established in the judgment is that employees, including those working on daily wages, are entitled to gratuity under the Payment of Gratuity Act, 1972, and that the payment of gratuity with interest is a statutory compulsion.

1. The prayer in the writ petition is to quash the order made in Case No.P.G.A.No.2 of 2006 dated 10.8.2006 passed by the third respondent and direct the first respondent to pay the gratuity of Rs.31,154/- as computed by the second respondent together with interest.

2. The brief facts necessary for disposal of the writ petition are as follows:

(a) The petitioner was initially employed as a casual labourer in the first respondent Tamil Nadu Civil Supplies Corporation (fully owned by the Government of Tamil Nadu) in the year 1972 and he was absorbed in the year 1998 as a regular employee and he retired from service on 30.6.2002, thus the petitioner has put in 29 years of total service.

(b) The absorption/regular appointment was given by the first respondent Corporation pursuant to the order dated 2.1.1998 passed by the Government of Tamil Nadu, wherein the Government directed the first respondent to permit such of those casual labourers, who had completed ten years of service and make them permanent. According to the petitioner the said period is eligible to be counted for the purpose of calculating the gratuity.

(c) As stated supra the petitioner retired on 30.6.2002 and he was denied gratuity stating that he is having only two years of permanent service. Hence the petitioner filed an application before the second respondent (Controlling Authority) under Section 7(1) of the Payment of Gratuity Act, 1972.

3. The said application was entertained by the second respondent, which was resisted by the first respondent stating that there is delay in filing the application, that the petitioner was appointed permanently only in the year 1999 as a labourer and he had not completed five years of service to claim gratuity; and that, the petitioner had not signed the attendance register, among other grounds.

4. On appreciation of the facts, the second respondent by order dated 29.11.2005 gave a finding that the petitioner was already functioning as a casual labourer even prior to 1999 and he was made permanent in the year 1998 and continued in employment thereafter. As the petitioner was functioning for more than ten years prior to regular appointment/permanent appointment, he is entitled to get gratuity amount as he was having total service of 12 years. The second respondent calculated the gratuity payable as Rs.31,154/- on the ground that the petitioner's daily wage was Rs.150/- per day and he served for more than 12 years.

5. The first respondent having aggrieved, filed appeal in Case No.P.G.A.2/2006 before the third respondent and the said appeal was allowed by order dated 10.8.2006 against which this writ petition is filed by the workman.

6. The main contention raised by the petitioner in this writ petition is that he having served/worked for a total period of 29 years from 1972 to 30.6.2002, he is entitled to get the gratuity in terms of section 7(2) of the Payment of Gratuity Act, 1972 and he is coming within the definition of employee as defined under Section 2(e) of the Act.

7. The learned counsel for the petitioner submitted that the Controlling Authority, in appreciation of facts and law, allowed the petitioner's claim and ordered payment of gratuity calculating the daily wage as Rs.150/- and the period served as 12 years and by order dated 29.11.2005 awarded a sum of Rs.31,154/- and if the same is not paid within 30 days, 10% interest was ordered to be paid. The learned counsel further submitted that the said order is erroneously set aside by the third respondent in the appeal without appreciating the petitioner's daily rated pay service for several years and the same is factually incorrect, and hence the appellate order is liable to be set aside and the order of the second respondent is bound to be restored.

8. The learned counsel appearing for the first respondent on the basis of the counter affidavit filed submitted that the petitioner has not rendered five years of service in the Civil Supplies Corporation and his dir