abhijit majumder (practicing company secretary) 21 November 2025

Interest claim on delay in payment of gratuity

To the respected fellow experts

Sir

The Company (a 100% State Govt Company) is for payment of salary have to wait for salary grants received from Govt (which partially covered (40%)the salary payment to their employees).

Due to this prime reason the Company made delay in releasing a part of the gratuity amout(40%) to the employee.

The emplpyee lodge a claim before Controlling authority for release of gratuity anongwith interest.

Meanwhile the company released the balance amount of Rs. 8.00 lakhs of total amount of Rs.20Lakhs( of which Rs.12.00 lakh paid within due time).

For interest part my query is:

Can the Company apply for Condonation of delay in releasing balance gratuity and waiving interest for the reason that financial constraint prevent the Company to release the Balance Rs.8.00 lakhs in due time.

Your views is highly solicited.

Regards

Abhijit

Reply Follow

5 Replies

kavksatyanarayana (subregistrar/supdt.(retired)) 21 November 2025

Whether the grants are received on time or not from the government, the company shall release the gratuity of the employee, failing which leads to paying interest for the delay.

T. Kalaiselvan, Advocate (Advocate) 22 November 2025

The company is liable to pay interest for the delay in settlement of gratuity amount, they cannot seek to condone the interest portion.

Dr. J C Vashista (Advocate ) 22 November 2025

Condonation of delay in payment, if applied, cannot survive and the employer has to pay interest upon outstanding amount.

abhijit majumder (practicing company secretary) 24 November 2025

Thanks to all the professionals for shareing their views.

There is no fixed time frame on receiving grant from Government nd solalso the amount.

i.e. sometime it received within 2 to 3 month and sometime it received after 6months.

And if the corporation applied for Rs. 2 crore grant may give Rs.1.5 crore.

Can the company applied for payment of interest amount in instalment.

Thanks

Regards

Abhijit

T. Kalaiselvan, Advocate (Advocate) 26 November 2025

You have rights to sue the company demanding your dues including interest over delayed settlement, hence you may look for the options to enforce your legal rights.