Harinagar Sugar Mills Ltd. (Biscuit Division) vs State Of Maharashtra 2025 INSC 801 - S.25-O Industrial Disputes Act - Right To Shut Down A Business

Constitution of India - Article 19- Article 19(1)(g) includes the right to shut down a business but is, of course, subject to reasonable restrictions. (Para 7) Freedom of trade, profession, occupation and business -All citizens of the country have freedom to choose a location of their choice and run it as they deem it fit, subject to the reasonable restrictions that may be made by the legislature. When it comes to industry which is covered under Article 19, the field of the statute is occupied by the Industrial Disputes Act, 1947 (Para 7) - Industrial Disputes Act, 1947- Section 25-O: i. the right to close the business is subject to the interest of the general public; ii. any application seeking permission for closure must disclose adequate and genuine reasons which the authority has to have regard for; iii. in certain cases, however, even if the reasons are genuine and adequate, it does not mean that permission to close ought to be granted; iv. if it is found that the reasons are generally adequate, and despite that the appropriate Government decides for refusal of permission of foreclosure, then the interest of the general public involved in that particular case must be “compelling” and “overriding”; v. financial difficulty on its own cannot constitute the reason for shutting down the business. An employer must demonstrate exceptional circumstances or an impossibility of running the business -Referred to Orissa Textile and Steel v. State of Orissa (2002) 2 SCC 578. (Para 12-13)

Practice and Procedure - Reliance cannot be placed on internal noting to establish compliance with procedure- …a mere noting in the official files of the Government while dealing with any matter pertaining to any person is essentially an internal matter of the Government and carries with it no legal sanctity - Referred to Pimpri Chinchwad New Township Development Authority v. Vishnudev Coop. Housing Society (2018) 8 SCC 215. (Para 16)

Administrative Law -Administrative authorities are also required to give reasons for a decision made- Referred to Star Enterprises v. City and Industrial Development Corpn. of Maharashtra Ltd (1990) 3 SCC 280. (Para 16)

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