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

The Petitioner (Employer) challenged orders passed by the Controlling Authority (09.11.2023) and the Appellate Authority (19.10.2024) under the Payment of Gratuity Act, 1972.

The Respondents (Employees), many in managerial cadres, resigned at various times (e.g., 2015), but only filed for gratuity in 2022.

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

A dispute arose over whether "Special Allowance" should be included in "wages" for gratuity calculation and whether gratuity should be calculated based on 15 days or 26 days of wages per year of service.

The Employer deposited admitted amounts during the proceedings but contested the liability for interest due to the Employees' delay in filing.

Whether the gratuity applications were barred by limitation given the delay of several years and the absence of Form "I".

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 versus the statutory 15 days.

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

It relied on the Second Proviso to Rule 10 of the Maharashtra Rules, which waives limitation if the employer fails to provide the Section 7(2) notice.

Regarding wages, the court applied Section 2(s), which includes dearness allowance but excludes various other allowances.

Lastly, it applied Section 7(3A), which mandates interest on delayed payments unless the employer obtains written permission from the Controlling Authority for the delay.

The Court held that the Employer cannot plead limitation because it failed its statutory duty under Section 7(2) to determine and notify the gratuity amount upon the Employees' resignation.

On the issue of "wages," the Court found the lower authorities failed to factually determine if the "Special Allowance" was a disguised Dearness Allowance or an excluded incentive; the mere label in a salary slip is not conclusive.

Regarding interest, the Court reasoned that since the Employer never sought the mandatory written permission under the proviso to Section 7(3A), it remained liable for interest on the unpaid balance.

However, once the Employer deposited the admitted amount with the Authority, the liability for interest on that specific portion ceased from the date of deposit.

The Court found the evidence regarding the "26-day rule" (based on photocopied documents) had not been properly authenticated or adjudicated by the lower courts.

The Court held that the claims were not barred by limitation due to the Employer’s non-compliance with Section 7(2).

The Appellate Authority must determine if "Special Allowance" is dearness allowance under Section 2(s) and if the "26-day" policy is validly proven.

Interest is payable on the unpaid balance, but not on the deposited amounts from the date of deposit.

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