The party workers were stopped near the AG office, just 100 m short of the Assembly and police swung into action when they tried to break the barricade.
AICC secretary Anees Ahmad alleged that peaceful Congress workers were brutally lathi-charged and about a dozen workers were injured and some of them received serious injuries and sustained fractures.
However, the police denied any lathi-charge and said they exercised utmost restraint and simply chased away the protesters.
The rally and gherao was a part of the protest organised by Congress to expose alleged misgovernance of the present BJP government in the state.
Earlier, Congress workers took out a march through lower bazar and held a rally near the Central Telegraph office.
HPCC chief Virbhadra Singh, AICC general secretary Barinder Singh Choudhary, leader of the opposition Vidya Stokes and party leader Kaul Singh Thakur addressed the rally.
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Congress leaders, led by Singh and Stokes, courted arrest and were "technically detained," but let off later.
Virbhadra, who reached here this morning, said the gherao was a symbolic protest against the "corrupt" BJP government, "which has brought all development in the state to a halt."
Condemning the use of force on peaceful Congress workers as "uncalled for", he said the protest was peaceful and there was no need for use of force. (MORE)