Case Note & Summary
The dispute involved multiple writ petitions filed by an employer company and several employees concerning gratuity payments under the Payment of Gratuity Act, 1972. The employer, a limited company manufacturing UPS systems, challenged judgments from the Controlling Authority and Appellate Authority that directed payment of gratuity to employees who had resigned in 2015 but filed applications in 2022. The employees, including a Chief Regional Manager with a last drawn basic salary of Rs.36,500, resigned without giving the required notice period and authorized the company to adjust certain amounts from their settlements. The employer contended that the employees did not submit Form 'I' for gratuity claims within thirty days as per rules and filed applications after a six-year delay without seeking condonation of delay under Rule 10A of the Payment of Gratuity (Maharashtra) Rules, 1972. They also argued that gratuity should be calculated only on basic wages and dearness allowance, excluding special allowance. The employees argued for gratuity calculation based on twenty-six days' wages instead of fifteen. The Controlling Authority partly allowed the employees' applications, directing payment of Rs.9,13,950 with interest, and the Appellate Authority dismissed appeals from both sides. The High Court considered whether the authorities erred in adjudicating despite delay and in gratuity calculation. The court noted that the employer had deposited the admitted gratuity amount before the Controlling Authority, reserving rights to challenge delay, but this conduct was seen as waiving the delay objection. On calculation, the court found the employees' claims were limited to basic wages and dearness allowance, and the employer's evidence showed special allowance was not a statutory component. The court dismissed the writ petitions, upholding the authorities' decisions, as the delay was not fatal and gratuity was correctly computed based on the statutory definition of wages.
Headnote
A) Employment Law - Gratuity Payment - Limitation and Condonation of Delay - Payment of Gratuity Act, 1972, Payment of Gratuity (Maharashtra) Rules, 1972 Rule 10A - Employee filed application for gratuity in 2022 after resigning in 2015 without filing condonation of delay application - Court held that the authorities did not err in proceeding with the application as the employer had deposited the admitted amount and the delay was not fatal to the claim - The employer's conduct in depositing the amount was considered as waiver of the delay objection (Paras 3-6, 8).
B) Employment Law - Gratuity Calculation - Definition of Wages - Payment of Gratuity Act, 1972 Section 2(s) - Dispute over whether special allowance should be included in gratuity calculation - Court found that the employee's claim was confined to basic wages and dearness allowance, and the employer's witness testified that special allowance was not a statutory term but a descriptive company term - Held that gratuity was correctly calculated based on basic wages and dearness allowance without including special allowance (Paras 5-6, 8).
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Issue of Consideration: Whether the Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972 erred in adjudicating the gratuity application despite delay and in calculating gratuity amount
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Final Decision
The High Court dismissed the writ petitions, upholding the judgments of the Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972
2026 LawText (BOM) (03) 13
Writ Petition No. 2875 of 2025 WITH WRIT PETITION NO. 2888 OF 2025 WITH WRIT PETITION NO. 2879 OF 2025 WITH WRIT PETITION NO. 2878 OF 2025 WITH WRIT PETITION NO. 2889 OF 2025 WITH WRIT PETITION NO. 2881 OF 2025 WITH WRIT PETITION NO. 2887 OF 2025 WITH WRIT PETITION NO. 2884 OF 2025 WITH WRIT PETITION NO. 2885 OF 2025 WITH WRIT PETITION NO. 4113 OF 2025 WITH WRIT PETITION NO. 4947 OF 2025 WITH WRIT PETITION NO. 4114 OF 2025 WITH WRIT PETITION NO. 4925 OF 2025 WITH WRIT PETITION NO. 4944 OF 2025 WITH WRIT PETITION NO. 5062 OF 2025 WITH WRIT PETITION NO. 4116 OF 2025 WITH WRIT PETITION NO. 4941 OF 2025 WITH WRIT PETITION NO. 4926 OF 2025 WITH WRIT PETITION NO. 5072 OF 2025 WITH WRIT PETITION NO. 5052 OF 2025
Mr. Yogendra M. Pendse a/w Ms. Priyanka Patkar, Mr. Kiran S. Bapat, Sr. Advocate a/w Mr. Jayesh Desai i/by Desai & Desai Associates
M/s. Aplab Ltd., Gundu Daji Desai, Jayprakash Jagnnath Raut, Anil Vaman Nemade, Manish V. Chavan, Sandeep Waman Athavale, Pratik Rajaram Gupta, Rosariya Thomas, Shrikrushna Pandurang Zope, Yogesh Suresh Dewasthali, Dharmatma Suryabali Pandey, Nitendra Upadhyay
M/s. Aplab Ltd., Shrikrushna Pandurang Zope, Sandeep Vaman Athavale, Gundu Daji Desai, Yogesh Suresh Dewasthali, Rosariya Thomas, Jayprakash Jaganath Raut, Pratik Rajaram Gupta, Manish V. Chavan, Anil Vaman Nemade, Dharmatma Suryabali Pandey, Nitendra Upadhyay
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Nature of Litigation: Writ petitions challenging judgments of Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972 regarding gratuity payments to employees
Remedy Sought
Employer and employees sought quashing of orders directing payment of gratuity and calculation disputes
Filing Reason
Challenges to judgments dated 09.11.2023 and 19.10.2024 by Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972
Previous Decisions
Controlling Authority partly allowed application for gratuity payment on 09.11.2023; Appellate Authority dismissed appeals on 19.10.2024
Issues
Whether the Controlling Authority and Appellate Authority erred in adjudicating the gratuity application despite delay and without condonation of delay application
Whether gratuity calculation should include special allowance or be based only on basic wages and dearness allowance
Submissions/Arguments
Employer contended application filed after six-year delay without condonation of delay under Rule 10A
Employer argued gratuity payable only on basic wages and dearness allowance, excluding special allowance
Employees argued for gratuity calculation based on twenty-six days' wages instead of fifteen
Ratio Decidendi
Delay in filing gratuity application is not fatal if the employer deposits the admitted amount, waiving delay objections; gratuity is calculated based on basic wages and dearness allowance as per Section 2(s) of the Payment of Gratuity Act, 1972, and special allowance is not included in statutory wages
Judgment Excerpts
The petitioner company is a limited company registered under the provisions of the Indian Companies Act, 1913
The respondent tendered his resignation without giving the prescribed notice period of three months
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
The petitioners deposited the admitted amount before the authority while expressly reserving their right to challenge the issue relating to condonation of delay
Gratuity under the Act is payable only on the basis of basic wages and dearness allowance
Procedural History
Employee resigned in 2015; filed application before Controlling Authority in 2022; Controlling Authority partly allowed application on 09.11.2023; appeals filed to Appellate Authority; Appellate Authority dismissed appeals on 19.10.2024; writ petitions filed in High Court in 2025; judgment reserved on 06.03.2026 and pronounced on 07.03.2026
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