I agree with the observations of Madhuji for the prime reason that it's the responsibility of the employer to compute the gratuity due and intimate the employee (in form No.L) who left inviting him (or heir) to receive the gratuity thus computed. It's the fault on the part of employer and have to disburse gratuity with accrued interest till full settlement. It's worth considering few settled court cases in the matter for proper understanding of the provisions:
Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., (2003) 3 SCC 40, it was decided that the interest on delayed payment of gratuity is mandatory and not discretionary.
Gujarat High Court: Biren Vaishnav, J., reiterated that, interest on delayed payment of gratuity is mandatory and not discretionary. The petitioner had prayed for a declaration that the respondent’s action in not paying the entire amount of Rs 10 lakhs towards gratuity to the petitioner was arbitrary. Hence, a direction was sought that respondents be directed to pay the remaining amount of gratuity to the petitioner along with 18% interest from the date of his retirement. Analysis and Decision High Court expressed that, in the Supreme Court decision of H. Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., (2003) 3 SCC 40, it was decided that the interest on delayed payment of gratuity is mandatory and not discretionary. When it is not the case of the respondent that the delay in the payment of gratuity was due to the fault of the employee and that it had obtained permission in writing from the controlling authority for the delayed payment on that ground, the respondent had been directed to pay interest @ 10% on the amount of gratuity to which the appellant is entitled from the date it became payable till the date of payment of the gratuity amount. Hence, Bench stated that the present case was covered by the Supreme Court’s decision as stated above. Therefore, Court directed the respondents to pay the petitioner the amount of gratuity of Rs 10 lakhs within a period of 10 weeks, and since the petitioner was superannuated in 2013 and the gratuity amount had been wrongfully withheld, the petitioner shall be entitled to interest at the rate of 9% from the date of his superannuation till the date of actual payment. [Ashvinkumar Ramniklal Jani v. State of Gujarat, 2022 SCC OnLine Guj 575, decided on 19-4-2022]...
https://www.scconline.com/blog/post/2022/05/10/if-there-is-a-delay-in-payment-of-gratuity-whether-interest-on-delayed-gratuity-will-be-mandatory-or-discretionary-gujarat-high-court-retirement-employee-superannuation/
--------------------
What if the employer doesn't pay gratuity?
In cases related to the non-payment of gratuity under this Act, the employer could face imprisonment for a term not less than six months but up to two years, unless the court, with documented reasons, believes that a lesser term of imprisonment or a fine would serve the interests of justice.
[PDF] reportable - Supreme Court of India
main.sci.gov.in › supremecourt › 23803_2019_1_1501_38521_Judg...
Also read this section which will have overriding effect over other acts :
" Section: 14 Act to override other enactments, etc.
The provisions of this Act or any rule made there under shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act."
Indian Red-Cross Society vs Vidyaben H. Vyas on 27 August, 2003 -Gujarat High Court- Equivalent citations: (2003)3GLR2684, (2004)ILLJ802GUJ
11. However, the difficulty in this case is that the limitation prescribed under the Payment of Gratuity Act, once again an enactment made by Parliament is only 60 days for the purpose of preferring an appeal. Under the proviso to Section 7, sub-section (7), the appellate authority is empowered to 'extend the period' of limitation by another sixty days. In other words, the appellate authority is empowered to condone the delay to upper limit of another sixty days beyond the prescribed period of limitation. No doubt, the Payment of Gratuity Act does not expressly exclude the operation of the Limitation Act, but the fact remains that the Payment of Gratuity Act is of the year 1972 where the Limitation Act is of the year 1963. the settled principle of interpretation of statutes is that if there are two mandates by the Sovereign Legislature, the later of the two shall prevail. Therefore, the fact that there was no express exclusion of Section 5 of the limitation under the Payment of Gratuity Act makes no difference while construing the scope of the power of the appellate authority constituted under the Payment of Gratuity Act, to condone the delay in preferring the appeals. the legal position enunciated by the supreme Court in Shantilal M. Bhayani V. Shanti Bai (supra), in my view, must be understood in the context of the Limitation Act, 1963, and the special period of limitation, prescribed in any other special or local law prior to the date of the enactment of the Limitation Act. It is worthwhile mentioning that the Tamil Nadu Buildings (Lease and Rent Control) Act, which is the subject matter of the issue before the Supreme Court in the above case was of the year 1960."
,,,,
https://indiankanoon.org/doc/1190655/
17. The Division Bench of Calcutta High Court, Andhra Pradesh High Court and Madras High Court has come to the conclusion that limitation is not applicable to the appellate authority being an executive authority vested that quasi-judicial powers and therefore Section 5 to 25 of the Limitation Act do not apply to the persona designata or administrative authorities. There is further provisions made in Section 7 sub-section (7) that no appeal by an employer shall be admitted unless at the time of preferring an appeal, the appellant either produce certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub-section (4) or deposited with the appellate authority such amount. Undisputedly, the said proviso of Section 7 sub-section (7) has not been complied with by the petitioner at the time of filing the appeal before the appellate authority. Therefore, considering this entire aspect of the matter and contentions which has been raised by learned advocate Mr. K.M. Thakkar on behalf of the petitioner-Society cannot be accepted and, looking to the statutory provisions made under the Act, which has not been fulfilled by the petitioner-Society and, in view of the observations made by the Apex Court in case of State of Punjab (supra) establishment is not having limited meaning it has wide meaning as interpreted by the Apex Court. It include a non-commercial establishments also. Therefore, after considering these observations made by the Apex Court as well as the Division Bench of the Calcutta High Court and the decision of the Division Bench of this Court which apparently is not applicable to the facts of the present case which is not related to the subject matter of gratuity and, therefore, according to my opinion, the controlling authority had not committed any error. There is no procedural irregularity committed by either of the authorities including the appellate authority. On the contrary both the authorities have acted within the jurisdiction and with the provisions of the Payment of Gratuity Act, 1972. There is no procedural irregularity committed by either of the authorities. The reasons given by the both the authorities are based on oral as well as documentary evidence produced before them. The finding given by both the authorities is not baseless and perverse. There is no error of law committed by both the controlling authorities.
18. In view of these facts and considering that this Court having very limited jurisdiction while exercising powers under Article 227 of the Constitution of India, the Apex Court has considered this aspect in the case of ROSHAN DEEN V. PREETILAL, 2002 (1) SCC PAGE 100 wherein the Apex Court has observed that while exercising powers under Article 226/227 of the Constitution of India, the purpose of powers conferred on High Court, held, is to advance justice, not to thwart it, even where justice is the by-product of an erroneous interpretation of law, High Court ought not to wipe out such justice in the name of correcting the error of law. The relevant paragraph 12 is quoted as under:
From India, Bangalore
1072Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., (2003) 3 SCC 40, it was decided that the interest on delayed payment of gratuity is mandatory and not discretionary.
Gujarat High Court: Biren Vaishnav, J., reiterated that, interest on delayed payment of gratuity is mandatory and not discretionary. The petitioner had prayed for a declaration that the respondent’s action in not paying the entire amount of Rs 10 lakhs towards gratuity to the petitioner was arbitrary. Hence, a direction was sought that respondents be directed to pay the remaining amount of gratuity to the petitioner along with 18% interest from the date of his retirement. Analysis and Decision High Court expressed that, in the Supreme Court decision of H. Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., (2003) 3 SCC 40, it was decided that the interest on delayed payment of gratuity is mandatory and not discretionary. When it is not the case of the respondent that the delay in the payment of gratuity was due to the fault of the employee and that it had obtained permission in writing from the controlling authority for the delayed payment on that ground, the respondent had been directed to pay interest @ 10% on the amount of gratuity to which the appellant is entitled from the date it became payable till the date of payment of the gratuity amount. Hence, Bench stated that the present case was covered by the Supreme Court’s decision as stated above. Therefore, Court directed the respondents to pay the petitioner the amount of gratuity of Rs 10 lakhs within a period of 10 weeks, and since the petitioner was superannuated in 2013 and the gratuity amount had been wrongfully withheld, the petitioner shall be entitled to interest at the rate of 9% from the date of his superannuation till the date of actual payment. [Ashvinkumar Ramniklal Jani v. State of Gujarat, 2022 SCC OnLine Guj 575, decided on 19-4-2022]...
https://www.scconline.com/blog/post/2022/05/10/if-there-is-a-delay-in-payment-of-gratuity-whether-interest-on-delayed-gratuity-will-be-mandatory-or-discretionary-gujarat-high-court-retirement-employee-superannuation/
--------------------
What if the employer doesn't pay gratuity?
In cases related to the non-payment of gratuity under this Act, the employer could face imprisonment for a term not less than six months but up to two years, unless the court, with documented reasons, believes that a lesser term of imprisonment or a fine would serve the interests of justice.
[PDF] reportable - Supreme Court of India
main.sci.gov.in › supremecourt › 23803_2019_1_1501_38521_Judg...
Also read this section which will have overriding effect over other acts :
" Section: 14 Act to override other enactments, etc.
The provisions of this Act or any rule made there under shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act."
Indian Red-Cross Society vs Vidyaben H. Vyas on 27 August, 2003 -Gujarat High Court- Equivalent citations: (2003)3GLR2684, (2004)ILLJ802GUJ
11. However, the difficulty in this case is that the limitation prescribed under the Payment of Gratuity Act, once again an enactment made by Parliament is only 60 days for the purpose of preferring an appeal. Under the proviso to Section 7, sub-section (7), the appellate authority is empowered to 'extend the period' of limitation by another sixty days. In other words, the appellate authority is empowered to condone the delay to upper limit of another sixty days beyond the prescribed period of limitation. No doubt, the Payment of Gratuity Act does not expressly exclude the operation of the Limitation Act, but the fact remains that the Payment of Gratuity Act is of the year 1972 where the Limitation Act is of the year 1963. the settled principle of interpretation of statutes is that if there are two mandates by the Sovereign Legislature, the later of the two shall prevail. Therefore, the fact that there was no express exclusion of Section 5 of the limitation under the Payment of Gratuity Act makes no difference while construing the scope of the power of the appellate authority constituted under the Payment of Gratuity Act, to condone the delay in preferring the appeals. the legal position enunciated by the supreme Court in Shantilal M. Bhayani V. Shanti Bai (supra), in my view, must be understood in the context of the Limitation Act, 1963, and the special period of limitation, prescribed in any other special or local law prior to the date of the enactment of the Limitation Act. It is worthwhile mentioning that the Tamil Nadu Buildings (Lease and Rent Control) Act, which is the subject matter of the issue before the Supreme Court in the above case was of the year 1960."
,,,,
https://indiankanoon.org/doc/1190655/
17. The Division Bench of Calcutta High Court, Andhra Pradesh High Court and Madras High Court has come to the conclusion that limitation is not applicable to the appellate authority being an executive authority vested that quasi-judicial powers and therefore Section 5 to 25 of the Limitation Act do not apply to the persona designata or administrative authorities. There is further provisions made in Section 7 sub-section (7) that no appeal by an employer shall be admitted unless at the time of preferring an appeal, the appellant either produce certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub-section (4) or deposited with the appellate authority such amount. Undisputedly, the said proviso of Section 7 sub-section (7) has not been complied with by the petitioner at the time of filing the appeal before the appellate authority. Therefore, considering this entire aspect of the matter and contentions which has been raised by learned advocate Mr. K.M. Thakkar on behalf of the petitioner-Society cannot be accepted and, looking to the statutory provisions made under the Act, which has not been fulfilled by the petitioner-Society and, in view of the observations made by the Apex Court in case of State of Punjab (supra) establishment is not having limited meaning it has wide meaning as interpreted by the Apex Court. It include a non-commercial establishments also. Therefore, after considering these observations made by the Apex Court as well as the Division Bench of the Calcutta High Court and the decision of the Division Bench of this Court which apparently is not applicable to the facts of the present case which is not related to the subject matter of gratuity and, therefore, according to my opinion, the controlling authority had not committed any error. There is no procedural irregularity committed by either of the authorities including the appellate authority. On the contrary both the authorities have acted within the jurisdiction and with the provisions of the Payment of Gratuity Act, 1972. There is no procedural irregularity committed by either of the authorities. The reasons given by the both the authorities are based on oral as well as documentary evidence produced before them. The finding given by both the authorities is not baseless and perverse. There is no error of law committed by both the controlling authorities.
18. In view of these facts and considering that this Court having very limited jurisdiction while exercising powers under Article 227 of the Constitution of India, the Apex Court has considered this aspect in the case of ROSHAN DEEN V. PREETILAL, 2002 (1) SCC PAGE 100 wherein the Apex Court has observed that while exercising powers under Article 226/227 of the Constitution of India, the purpose of powers conferred on High Court, held, is to advance justice, not to thwart it, even where justice is the by-product of an erroneous interpretation of law, High Court ought not to wipe out such justice in the name of correcting the error of law. The relevant paragraph 12 is quoted as under:
From India, Bangalore
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