Absence of statutory notice under Section 7(2) negates limitation for filing gratuity applications.

The Petitioner (Employer) challenged orders passed by the Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972, which directed payment of gratuity and interest to several retired/resigned employees (Respondents).

The employees, mostly from the management cadre, resigned in 2015/2016 but filed for gratuity only in 2022.

The employer argued the claims were barred by limitation as no Form “I” was submitted within 30 days.

A dispute arose regarding whether "Special Allowance" should be included in "wages" for calculation and whether the company policy entitled employees with over 15 years of service to gratuity based on 26 days per year instead of 15 days.

Whether the employees' applications were barred by limitation due to the delay in filing Form “I” and the absence of a delay condonation application.

Whether "Special Allowance" falls within the definition of "wages" under Section 2(s) of the Payment of Gratuity Act, 1972.

Whether the employer is liable to pay interest under Section 7(3A) despite the employees' delay in approaching the Authority.

Whether the employees are entitled to gratuity calculated at 26 days per year based on alleged company policy.

The court applied Section 7 of the Payment of Gratuity Act, 1972, which mandates the employer to determine and give notice of gratuity "as soon as it becomes payable," regardless of whether an application is filed.

It relied on Rule 10 of the Payment of Gratuity (Maharashtra) Rules, 1972, specifically the second proviso, which stipulates that no limitation applies if the employer fails to provide the statutory notice under Section 7(2).

Regarding wages, Section 2(s) was applied, which includes "dearness allowance" but excludes "any other allowance."

Section 7(3A) was applied regarding the mandatory payment of simple interest for delayed payments unless written permission for delay is obtained from the Authority.

The Court reasoned that the primary burden to determine gratuity lies with the employer under Section 7(2); since the Petitioner failed to issue the required notice, they could not invoke the plea of limitation against the employees.

On the issue of interest, the Court found that since the employer did not obtain written permission from the Controlling Authority to delay payment, interest was mandatory under Section 7(3A), though it should not run on amounts already deposited with the Authority.

Regarding the "Special Allowance" and the "26-day rule," the Court found the lower authorities failed to determine the true nature of the allowance (i.e., whether it was disguised Dearness Allowance) or verify the authenticity of photocopied policy documents.

The Court held that nomenclature in a salary slip is not conclusive; the actual purpose and character of the payment must be factually scrutinized.

It held that the claims were not barred by limitation.

The Court directed the Appellate Authority to conduct a fresh factual enquiry into: (a) whether "Special Allowance" constitutes "wages" under Section 2(s); and (b) whether company policy justifies a 26-day calculation.

It clarified that interest is not payable on admitted amounts from the date of their deposit.

The Authority was further directed to consider specific salary adjustments/undertakings for individual employees like Mr. Gupte.

The remanded issues must be decided within eight weeks.