Section 4 of the Gratuity Act 1972 deals with Payment of Gratuity. It reads as follows:
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease.
Provided that the completion of continuous service of 5 years shall not be necessary where the termination of the employment of any employee is due to death or disablement.
Thus Gratutity Act is silent about payment of grautity for deseased till retirement. Hence we can construe it that it is applicable only till his death.
However many companies give full gratuity as a Employee Welfare measure.
Thanks & Regards
30th August 2007 From India, Madras