Employer's failure to issue statutory notice under Section 7(2) precludes limitation plea and mandates interest.

The Respondent-employees, formerly in management cadres (e.g., Chief Regional Manager), resigned from the Petitioner-company.

The employer admitted a liability of ₹3,79,038 based on 15 days' wages per year but did not pay due to financial difficulties.

The employees filed applications for gratuity before the Controlling Authority in 2022, approximately six years after resigning in 2015.

The employer contested the claims on grounds of limitation, the exclusion of "special allowance" from the definition of wages, and the lack of a formal Form "I" application.

The Controlling Authority and Appellate Authority partially allowed the employees' claims, directing payment based on 15 days' wages and including interest.

Both the employer and employees challenged these orders via multiple Writ Petitions.

Whether the employees' applications were barred by limitation under the Payment of Gratuity (Maharashtra) Rules, 1972, given the delay in filing.

Whether the employer is liable to pay interest under Section 7(3A) despite the lack of a formal demand by the employee and existing financial hardship.

Whether "special allowance" constitutes "wages" under Section 2(s) of the Act and whether gratuity should be calculated at 26 days per year based on company policy.

The Court applied Section 7(2) of the Payment of Gratuity Act, which mandates the employer to determine and notify gratuity "as soon as it becomes payable" regardless of an employee’s application.

It relied on the Second Proviso to Rule 10 of the Maharashtra Rules, which stipulates that no limitation applies if the employer fails to issue the statutory notice under Section 7(2).

Regarding wages, the Court interpreted Section 2(s), which includes dearness allowance but excludes various other allowances from "wages".

Finally, Section 7(3A) was applied, establishing that interest is mandatory for delayed payment unless the employer obtains written permission from the Controlling Authority for the delay.

The Court rejected the employer's limitation plea, reasoning that since the employer failed its proactive duty under Section 7(2) to determine and notify the gratuity amount, the limitation period under Rule 10 remained inapplicable.

Regarding interest, the Court held that since the employer did not seek written permission from the Authority for the delay as required by the proviso to Section 7(3A), liability for interest was absolute.

However, the Court adjusted the interest liability, noting that interest should not accrue on the "admitted amount" once it was deposited with the Authority.

On the substantive issue of "special allowance," the Court found the lower authorities failed to conduct a "substance over form" analysis.

It noted that the true nature of the allowance (whether it was disguised dearness allowance) and the validity of photocopied documents regarding a 26-day calculation policy required a factual inquiry into original records.

The Court held that: (i) the claims were not barred by limitation due to the employer's failure to give statutory notice.

(ii) interest is payable on the balance amount, but not on the deposited portion after the date of deposit.

and (iii) the Appellate Authority must determine within eight weeks whether the "special allowance" is dearness allowance under Section 2(s) and if company policy entitles these officers to 26 days' wages per year.

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