1 ( 2025:HHC:37397) IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No.4632 of 2025 Decided on: 7th November, 2025. ------------------------------------------------------------------------------------------- Bindumati …..Petitioner Versus State of H.P and others .....Respondents ------------------------------------------------------------------------------------------- Coram Ms. Justice Jyotsna Rewal Dua Whether approved for reporting?1 For the Petitioner: Mr. Chandernarayan Singh, Advocate. For the Respondents: Mr. L.N. Sharma, Additional Advocate General and Ms. Menka Raj Chauhan, Deputy Advocate General. -------------------------------------------------------------------------------------------- Jyotsna Rewal Dua, Judge The gratuity amount of 4,21,068/- was sanctioned in ₹4,21,068/- was sanctioned in favour of the petitioner on 08.02.2024 by the Controlling Authority- cum-Labour Officer, Mandi Zone (under the Payment of Gratuity Act, 1974). Despite this, aforesaid amount has not been released in favour of the petitioner, Hence, the grievance. 2. Heard learned counsel for the parties and considered the case file. 3. The Case Following facts are not in dispute:- 1 Whether reporters of print and electronic media may be allowed to see the order? Yes. 2 ( 2025:HHC:37397) 3(i) The petitioner was engaged as daily wager (Class-IV) employee with the respondent, Labour Commissioner -cum-Director of Employment on 01.07.1992. Her services were regularized on 30.11.2015. The petitioner retired from government services as Peon on 31.03.2023. 3(ii) Upon petitioner's retirement, Labour Officer, Mandi Zone- respondent No.3 sanctioned an amount of 1,08,567/- as ₹4,21,068/- was sanctioned in gratuity in her favour. The amount was calculated by taking into consideration only the regular service rendered by the petitioner. Her daily wage services w.e.f. 01.07.1992 to 29.11.2015 was excluded from consideration. Petitioner, raised an issue about it before the Competent Authority. As a consequence whereof, the Controlling Authority under the Payment of Gratuity Act i.e. Labour Officer, Mandi adjudicated the issue and vide office order dated 08.02.2024 sanctioned differential gratuity amount of 4,21,068/- in favour of ₹4,21,068/- was sanctioned in the petitioner by taking into consideration the daily wage service rendered by the petitioner. Gratuity amount of 1,08,567/- stands ₹4,21,068/- was sanctioned in released to the petitioner. Admittedly, the order dated 08.02.2024 was not assailed before the Appellate Authority by the respondent Department. The said order has attained finality. 3(iii) As a follow up action, respondent No.3 on 28.02.2024, requested the District Treasury Officer, Mandi- respondent No.5 to 3 ( 2025:HHC:37397) disburse the gratuity sanctioned in favour of the petitioner under order dated 08.02.2024. Respondent No.5 took an objection in its office letter dated 21.06.2024 and requested the respondents/Labour Department to adhere to Finance department notification dated 31.12.2020. As per the said notification:- ‘Section 4(1) of Payment of Gratuity Act, 1972, clearly stipulates that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of ‘fifteen days’ wages based on the rate of wages last drawn on termination of employment of an employee after he has rendered continues service for not less than five years.’ ‘As per provisions in Section 2(e) and Section 4(2) of the Payment of Gratuity Act, 1972, that the terminology last pay drawn, as find mention in the orders of the Controlling Authority-Cum- Labour Officer, Department of Labour and Employment, will apply to the wages last drawn by a person/employee in the capacity of a daily wager before date of regularization of his daily waged service.’ The operative para of the above instructions reads as under:- “…….in the cases, where the Controlling Authority-cum- Labour Officer(s) or Joint Commissioner-cum-Appellate Authority, has passed orders) to determine the gratuity of Govt. Servant by taking into account both daily waged period and regular service of such Govt. Servant, based on emoluments last drawn by him at the time of retirement, under the Payment of Gratuity Act, 1972, such orders may be agitated in higher appellate Court immediately by way of filling appeals in time bound manner.” 4 ( 2025:HHC:37397) In view of the objections so raised by respondent No.5 duly sanctioned amount of gratuity has not been released to the petitioner. 4. Indisputably, the petitioner had been sanctioned gratuity in the sum of 1,08,567/- by respondent No.3 on 19.04.2023 for the ₹4,21,068/- was sanctioned in regular service rendered by her. Further, under office order dated 08.02.2024, a sum of 4,21,068/- was also sanctioned in petitioner's ₹4,21,068/- was sanctioned in favour as differential amount of gratuity for about 23 years 04 months of daily waged service discharged by her. Both the orders passed in this regard by respondent No.3 under the Payment of Gratuity Act, 1972 were accepted by the respondent Department. The remedy of appeal etc. was not availed against the aforesaid orders. That being the position, the respondent No.5’s taking objections by putting forth the Finance Department’s letter dated 31.12.2020 is beyond comprehension. Respondent No.5’s objections were irrelevant when the respondent department had accepted the orders passed by the Competent Authority more particulary the order dated 08.02.2024. Furthermore, in terms of the office letter dated 31.12.2020, the Finance Department had advised the Administrative Department to agitate the orders passed in particular given situation before the Higher Appellate Authority within the prescribed time limit. As noticed previously, in the instant case no appeal was filed by the respondent department against the orders 5 ( 2025:HHC:37397) passed by adjudicating authority. The order dated 08.02.2024 passed by the adjudicating authority having attained finality was required to be given effect to by respondent No.5. It is also relevant to take stock of the fact that respondents No. 1 to 3 (concerned department) have not even contested this writ petition. Rather a statement was made in this regard on their behalf on 20.08.2025 that they do not intend to file any reply. The petition has been opposed only by respondents No. 4 & 5 i.e. the Treasury Department. The obejction of Treasury Department is not maintainable in the background of given factual situation. Having observed above, it also needs to be noticed that in Net Ram Sahu versus State of Chhattisgarh2, the Hon'ble Apex Court had held that having regularized services of appellant (therein), State had no justifiable reason to deny benefit of gratuity to appellant which was his statutory right; Question as to from which date services were regularized was of no consequence for calculating total length of service for claiming gratuity once services were regularized. It was further held that Payment of Gratuity Act being welfare legislation meant for benefit of employees who serve their employer for long time, it was duty of State to pay gratuity to employee rather than deny benefit on some technical ground and 2 2018 (5) SCC 430. 6 ( 2025:HHC:37397) force employee to approach Court to get his genuine claim. Portion from the decision, relevant to context is as follows:- “16. In our considered opinion, once the State regularized the services of the appellant while he was in State services, the appellant became entitled to count his total period of service for claiming the gratuity amount subject to his proving continuous service of 5 years as specified under Section 2A of the Act which, in this case, the appellant has duly proved. 17. In the circumstances appearing in the case, it would be the travesty of justice, if the appellant is denied his legitimate claim of gratuity despite rendering “continuous service” for a period of 25 years which even, according to the State, were regularized. The question as to from which date such services were regularized was of no significance for calculating the total length of service for claiming gratuity amount once the services were regularized by the State. 18. It was indeed the State who took 22 years to regularize the service of the appellant and went on taking work from the appellant on payment of a meager salary of Rs.2776/- per month for 22 long years uninterruptedly and only in the last three years, the State started paying a salary of Rs.11,107/- per month to the appellant. Having regularized the services of the appellant, the State had no justifiable reason to deny the benefit of gratuity to the appellant which was his statutory right under the Act. It being a welfare legislation meant for the benefit of the employees, who serve their employer for a long time, it is the duty of the State to voluntarily pay the gratuity amount to the appellant rather than to force the employee to approach the Court to get his genuine claim. 19. In view of the foregoing discussion, we cannot agree with the reasoning and the conclusion arrived at by the High Court which is legally unsustainable. It is really unfortunate that the genuine claim of the appellant was being denied by the State at every stage of the proceedings up to this Court and dragged him in fruitless litigation for all these years. 20. Indeed, this reminds us of the apt observations made by the Chief Justice M.C. Chagla (as he then was) in the case of Firm Kaluram Sitaramv. Union of India. The learned Chief 7 ( 2025:HHC:37397) Justice in his distinctive style of writing while deciding the case between an individual citizen and the State made the following pertinent observations: “19. Now, we have often had occasion to say that when the State deals with a citizen it should not ordinarily reply on technicalities, and if the State is satisfied that the case of the citizen is a just one, even though legal defences may be open to it, it must act, as has been said by eminent Judges, as an honest person.” 21. These observations apply in full force against the State in this case because just case of the appellant was being opposed by the State on technical grounds. As a consequence, the appeal succeeds and is allowed. Impugned judgment/order passed by the High Court (Single Judge and Division Bench) are set aside and the orders of the Controlling Authority and Appellate Authority are restored with cost of Rs.25,000/- payable by the State to the appellant. Cost to be paid by the State along with the payment of gratuity amount.” Though the above decision has been referred to the Larger Bench in Dhansai Sahu versus State of Chhattisgarh and another,3 however, it is also settled principle of law that decision refered to Larger Bench continues to govern until decision of the Larger Bench (Reference: Rajnish Kumar Rai versus Union of India and another4 and Ashok Kumar and another versus UOI and another5). For the forging reasons, it has to be held that gratuity admittedly due in favour of petitioner as sanctioned by respondent No.3 on 08.02.2024 and which order has attained 3 Civil Appeal No. 564/2020, order dated 21.08.2024. 4 2023 (14) SCC 782 5 2012 (11) SCC 321) 8 ( 2025:HHC:37397) finality, cannot be withheld by respondent No.5 i.e. The Treasury Department. 5. In view of the above discussion, this writ petition is allowed. Respondent No.5 is directed to release the gratuity to the petitioner in terms of office order dated 08.02.2024 passed by respondent No.3. This exercise be completed within four weeks failing which payable gratuity shall carry interest @5% from the due date, which shall be payable by respondent No.5. Pending miscellaneous application(s), if any, shall also stand disposed of. Jyotsna Rewal Dua November 07, 2025 Judge yogesh