Employer's failure to issue Section 7(2) notice renders limitation inapplicable to delayed gratuity claims; special allowance includibility in wages demands factual probe; interest accrues on unpaid portion absent delay permission.

JUDGMENT :

AMIT BORKAR, J.

1. As all the petitions arise out of a common judgment and order, they are being disposed of by this common judgment. For the purpose of convenience and clarity, the facts stated in the petition filed by the employer are treated as the primary facts of the dispute.

2. The present writ petition is directed against the judgment dated 09.11.2023 passed by the learned Controlling Authority under the Payment of Gratuity Act, 1972, who is also the learned Judge of the Fourth Labour Court at Thane, in Application (PGA) No.173 of 2022. The petition also challenges the judgment dated 19.10.2024 delivered by the learned Appellate Authority under the Payment of Gratuity Act, 1972, who is the learned Member of the Industrial Court at Mumbai, in Appeal (PGA) No.8 of 2024. The petitioner company is a limited company registered under the provisions of the Indian Companies Act, 1913. It carries on the business of manufacturing UPS systems and industrial AC and DC power units and engages employees in different categories for its production and administrative activities. At the time of his resignation, the respondent was working in the capacity of Chief Regional Manager and his last drawn basic salary was Rs.36,500 per month. The respondent tendered his resignation without giving the prescribed notice period of three months as required under the rules of the company. However, in his resignation letter he expressed willingness to compensate the notice period of two months, which amounted to Rs.71,783. The respondent also furnished an undertaking authorising the Accounts Officer to inform the Head Office and Accounts Department to adjust an amount of Rs.2,09,443 which was pending in his name on account of regularisation as advised by him to the Corporate Head Office.

3. The case of the petitioners is that the respondent did not submit Form “I” to the employer claiming gratuity, nor was there any communication from the respondent to the company after his resignation. The respondent also did not personally approach the company for payment of gratuity after leaving service in the year 2015. According to the petitioners, the respondent for the first time filed an application before the Controlling Authority under Section 7(7) of the Payment of Gratuity Act in the year 2022 seeking payment of gratuity, which was clearly beyond the time prescribed under the Act and the Rules framed thereunder.

4. The petitioners filed their written statement before the Controlling Authority and contended that at the time of resignation the respondent himself had authorised the company, by his letters dated 02.02.2015 and 04.03.2015, to adjust an amount of Rs.2,09,433 either in part or in full along with Rs.71,783 towards two months’ salary in accordance with the company rules against his full and final settlement. It was further pointed out that as per the company’s calculation of full and final settlement, the respondent was entitled to gratuity calculated at the rate of fifteen days’ wages for every completed year of continuous service, which amounted to Rs.3,79,038. The company stated that the said amount could not be paid due to financial difficulties. The petitioners also contended that the respondent had not submitted any application