Source: Supreme Court 

Why in News? 

The Supreme Court, in the matter of Harinagar Sugar Mills Ltd. (Biscuit Division) & Anr. v. State of Maharashtra & Ors. (2025) delivered by a two-Judge Bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra, held that the constitutional right under Article 19(1)(g) to practice any profession or to carry on any trade or business also encompasses the right to close down a business.

What was the Background of Harinagar Sugar Mills Ltd. (Biscuit Division) & Anr. v. State of Maharashtra & Ors. (2025) Case? 

• Appeals were filed before the Supreme Court by Harinagar Sugar Mills Ltd. (Biscuit Division) challenging orders of the Bombay High Court related to the closure of its business. 
• Harinagar Sugar Mills Ltd. (HSML) has been running a biscuit manufacturing unit for over 30 years exclusively for Britannia Industries Limited (BIL) under Job Work Agreements (JWAs). 
• In 2019, Britannia Industries Limited terminated the JWA, leading HSML to initiate closure proceedings under the Industrial Disputes Act, 1947. 
• HSML submitted its closure application on 28th August 2019, using Form XXIV-C as required under the Maharashtra Industrial Disputes Rules. 
• The Deputy Secretary of the Maharashtra Government rejected the application citing incompleteness and demanded a revised submission. 
• Despite providing additional details, delay ensued, and no formal closure approval was granted. 
• In the meantime, workers' unions approached the Industrial Tribunal seeking a stay on the closure, which the Tribunal granted. 
• HSML's challenge to the Tribunal’s interim order and rejection of the application was dismissed by the Bombay High Court, prompting appeals to the Supreme Court. 

HSML's Arguments: 

• Their closure application was valid and complete as of 28th August, 2019. 
• The statutory 60-day period for deemed closure had lapsed in October 2019, and thus, closure should have taken effect. 
• Only the Minister-in-Charge had the legal authority to accept or reject the application — the Deputy Secretary had no such jurisdiction to demand modifications or obstruct closure. 
• HSML emphasized that after decades of exclusive work for BIL, the termination left them with no viable business alternative, making closure unavoidable. 

Respondents' (Government and Workers') Arguments: 

• The closure application was incomplete, and thus, the 60-day deemed approval rule did not apply. 
• The Government urged restraint on closure, emphasizing protection of workers' rights and employment. 
• Workers and their unions opposed the closure, citing statutory protections under labour laws. 

What were the Court’s Observations? 

• The Court acknowledged the need to balance: 
  • The constitutional right under Article 19(1)(g) to carry on or shut down a business. 
  • With reasonable restrictions aimed at protecting employees and ensuring statutory compliance. 
• Held that the closure application dated 28th August 2019, was: 
  • Complete and valid. 
  • Triggered the 60-day statutory period under Section 25-O of the Industrial Disputes Act, 1947. 
  • Resulted in a deemed closure effective from October 2019. 
• The Deputy Secretary was not the “appropriate Government” under Section 25-O. 
  • He lacked legal authority to demand revisions or reject the closure application. 
  • The communications issued by the Deputy Secretary were thus held to be invalid. 
• The Minister-in-Charge failed to: 
  • Independently apply his mind. 
  • Unlawfully delegated decision-making to the Deputy Secretary, which amounted to a legal defect. 
• The Court recognized HSML's compelling circumstances: 
  • After the termination of its long-standing agreement with Britannia Industries Ltd., HSML had no alternative business avenues. 
• The Supreme Court allowed the appeals, and: 
  • Set aside the Bombay High Court’s orders. 
  • Declared the closure valid from 28th August, 2019. 
  • Confirmed that the deemed closure took effect in October 2019. 
• The Deputy Secretary’s interference in demanding revisions and delaying closure was held to be unauthorized and ultra vires. 
• Employee compensation: 
  • The Court held that any compensation paid during the litigation was not recoverable from the workers. 
  • Appreciating HSML’s approach, the Court directed an additional ₹5 crores to be paid in compensation to workers. 
  • The amount is to be disbursed within eight weeks. 

What are the Relevant Legal Provisions Referred to? 

Article 19 of the COI: 

• Article 19 of the Constitution of India, 1950 (COI) guarantees the right to freedom of speech and expression and is typically invoked against the state. 
  • As per Article 19(1), all citizens shall have the right: 
    • (a) to freedom of speech and expression; 
    • (b) to assemble peaceably and without arms; 
    • (c) to form associations or unions; 
    • (d) to move freely throughout the territory of India; 
    • (e) to reside and settle in any part of the territory of India; and 
    • (f) omitted 
    • (g) to practice any profession, or to carry on any occupation, trade or business.

Article 19(1)(g) of the COI: 

• Article 19(1)(g) of the Constitution of India grants all citizens the right to practice any profession or to carry on any occupation, trade, or business. 
• This right is subject to Article 19(6), which allows the State to impose reasonable restrictions in the interest of the general public. 
• The right under Article 19(1)(g) is: 
  • Broad and general, allowing individuals to choose their business or profession. 
  • Not absolute — does not extend to illegal activities or professions prohibited by law. 
• Limitations and Clarifications: 
  • Citizens cannot claim a right to hold a specific post or job of their choice. 
  • There is no obligation on the State or any statutory body to: 
    • Make a business profitable, or 
    • Provide customers or business opportunities. 
• If a person's occupation of a place is unlawful, they cannot invoke Article 19(1)(g) to justify conducting business there. 
• Fundamental rights cannot be used to: 
  • Justify illegal acts, or 
  • Prevent authorities from performing their lawful statutory duties. 
• The Supreme Court, recognizing India's controlled and planned economy, has: 
  • Upheld legislation aimed at social control of private enterprise. 
  • Allowed restrictions on private activities to align with Directive Principles of State Policy. 
• Article 19(6) allows: 
  • The State to impose reasonable restrictions on business rights. 
  • The enactment of laws concerning professional or technical qualifications necessary to practice certain professions.