2007 (5) TMI 659 - HC - Indian Laws

Summary

Issues Involved:
1. Applicability of the Payment of Gratuity Act, 1972 to the Himachal Pradesh Irrigation and Public Health Department.
2. Entitlement of the workman to gratuity for the period served as a daily wage worker.
3. Applicability of the CCS (Pension) Rules, 1972 for the period of regularized service.
4. Calculation of gratuity for different periods of service.
5. Payment of interest on delayed gratuity.

Detailed Analysis:

1. Applicability of the Payment of Gratuity Act, 1972:
The State challenged the orders of the Appellate Authority and the Labour Officer-cum-Controlling Authority, arguing that the Payment of Gratuity Act, 1972 does not apply to the Himachal Pradesh Irrigation and Public Health Department. The Court held that the department qualifies as an establishment under Section 1(3) of the Payment of Gratuity Act, 1972. The judgment cited the Supreme Court's decision in State of Punjab v. The Labour Court, Jullundur, which interpreted "establishment" broadly to include entities involved in construction, maintenance, and operation of infrastructure like water supply systems.

2. Entitlement to Gratuity for Daily Wage Service:
The workman served as a daily wage worker from March 1982 to December 31, 1993, and was regularized from January 1, 1994, until his retirement on October 31, 2001. The Court ruled that the workman is entitled to gratuity for the period served on daily wages under the Payment of Gratuity Act, 1972. The Court referenced the Kerala High Court decision in Executive Engineer (Construction) Southern Railway, Quilon v. M.P. Sankara Pillai, which held that casual laborers are entitled to gratuity for their period of service before regularization.

3. Applicability of CCS (Pension) Rules, 1972:
For the period from January 1, 1994, to the date of superannuation, the workman is entitled to gratuity under the CCS (Pension) Rules, 1972. The Court found no conflict between the Payment of Gratuity Act and the CCS (Pension) Rules, allowing both to operate simultaneously for different periods of service. This interpretation aligns with the Supreme Court's ruling in Municipal Corporation of Delhi v. Dharam Prakash Sharma, which held that the Payment of Gratuity Act applies unless specifically excluded.

4. Calculation of Gratuity:
The Controlling Authority initially calculated gratuity for the entire service period from March 1982 to October 31, 2001. The Court corrected this, directing that gratuity for the period from March 1982 to December 31, 1993, be calculated under the Payment of Gratuity Act, 1972, and for the period from January 1, 1994, to October 31, 2001, under the CCS (Pension) Rules, 1972.

5. Payment of Interest:
The Court mandated the payment of interest on delayed gratuity, referencing the Supreme Court's decision in H. Gangahanume Gowda v. Karnataka Agro Industries Corporation Ltd., which held that payment of interest on delayed gratuity is a statutory compulsion. The Court directed that interest be paid at 9% per annum for the regularized period.

Conclusion:
The Court concluded that the workman is entitled to gratuity for different periods under respective legislations, with interest on delayed payments. The State was directed to comply within one month.