Employer's failure to issue statutory notice under Section 7(2) negates limitation for filing gratuity applications.

The Respondent-employees (including Chief Regional Manager Gundu Daji Desai) resigned from M/s. Aplab Ltd. in 2015

The employees did not file Form “I” for gratuity within 30 days of leaving service, nor did the employer issue a notice determining the gratuity amount under Section 7(2) of the Payment of Gratuity Act

In 2022, the employees moved the Controlling Authority seeking gratuity

The employer deposited the admitted amounts but contested the inclusion of "Special Allowance" in "wages" and raised a plea of limitation

The Controlling Authority and Appellate Authority partially allowed the claims, directing payment based on 15 days' wages per year and including interest, but rejecting the employees' claim for 26 days' wages based on alleged company policy

Both parties challenged these orders via Writ Petitions

Whether the employees' claims were barred by limitation under Rule 10 of the Maharashtra Rules due to the delay in filing applications

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

Whether "Special Allowance" falls within the definition of "wages" under Section 2(s) of the Act

Whether the employees are entitled to gratuity at the rate of 26 days per year of service based on company policy

The court applied Section 7(2) of the Payment of Gratuity Act, which mandates employers to determine and notify gratuity amounts regardless of whether an application is filed

It relied on the Second Proviso to Rule 10 of the Payment of Gratuity (Maharashtra) Rules, 1972, which stipulates that no limitation applies if the employer fails to issue the statutory notice

The definition of "wages" under Section 2(s) was central, stating it includes dearness allowance but excludes various other allowances

Section 7(3A) and its proviso were applied, establishing that interest is mandatory for delayed payments unless the employer obtains written permission from the Authority for delay caused by the employee

The Court held that the employer cannot raise a limitation plea because it failed its own statutory duty under Section 7(2) to determine and notify the gratuity amount

Regarding interest, the Court found that since the employer never sought written permission for the delay as required by the proviso to Section 7(3A), simple interest was mandatory on any unpaid/delayed balance

However, interest should not run on the portion already deposited with the Authority from the date of such deposit

On the substantive issue of "Special Allowance," the Court found that the lower authorities failed to conduct a "nature of payment" test; they did not determine if the allowance was dearness allowance in disguise or a excluded incentive

Furthermore, the claim for 26 days' wages depended on photocopied documents whose authenticity and evidentiary value were never properly adjudicated

The Court held that: (i) the claims are not barred by limitation

(ii) interest is payable on the delayed amount, excluding the period after the admitted amount was deposited

(iii) the Appellate Authority must specifically determine if the "Special Allowance" constitutes "wages" under Section 2(s) and if the 26-day calculation policy is proved by authentic evidence

The Authority was directed to decide the remanded points within eight weeks