Employer's failure to issue statutory notice under Section 7(2) precludes limitation plea against gratuity claims.

The Respondent-employees resigned from the Petitioner-company after various years of service.

A dispute arose when the employees filed applications for gratuity before the Controlling Authority in 2022, several years after their resignations (e.g., Respondent Desai resigned in 2015).

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

The employer also argued that "Special Allowance" should be excluded from gratuity calculations under Section 2(s) of the Payment of Gratuity Act, 1972.

The Controlling Authority and Appellate Authority partially allowed the employees' claims, directing payment based on 15 days' wages per year plus 10% interest.

Both the employer (challenging the inclusion of allowances and interest) and employees (seeking calculation based on 26 days per year instead of 15) moved the High Court.

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

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

Whether "Special Allowance" constitutes "wages" (as dearness allowance) under Section 2(s) of the Payment of Gratuity Act, 1972.

Whether the employees are entitled to gratuity calculation at the rate of 26 days per year 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 employee applies.

It relied on the second proviso to Rule 10 of the Payment of Gratuity (Maharashtra) Rules, 1972, which stipulates that limitation does not apply if the employer fails to give notice under Section 7(2).

The definition of "wages" under Section 2(s) was applied to distinguish between dearness allowance (included) and other excluded allowances.

Section 7(3A) and its proviso were applied regarding the mandatory payment of interest on delayed gratuity unless specific written permission is obtained from the Authority.

Regarding limitation, the Court reasoned that since the Petitioner failed to determine the gratuity and issue the mandatory notice under Section 7(2), they could not invoke the plea of delay against the employees per the proviso to Rule 10.

On the issue of interest, the Court found that the employer did not obtain written permission from the Controlling Authority to withhold payment; thus, statutory interest was mandatory, though it should cease on the "admitted amount" from the date it was actually deposited with the Authority.

Concerning "Special Allowance," the Court noted that the true nature of the payment—whether it was a disguised dearness allowance—is a fact-intensive inquiry.

Since the Appellate Authority failed to evaluate original documents or the substance of the allowance versus its nomenclature, the Court found the existing findings insufficient.

Similarly, the claim for 26 days’ wages was based on photocopied policy documents whose authenticity was never verified by the lower authorities.

The claims were not barred by limitation due to the employer's failure to comply with Section 7(2).

Interest is payable on the delayed amount, but excludes the period after the admitted amount was deposited.

The status of "Special Allowance" and the 26-day calculation policy must be re-adjudicated based on original evidence.

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