Right to close business under Article 19(1)(g) protects closure freedom, while prior-approval closure law failed constitutional scrutiny.

The right to carry on business under Article 19(1)(g) was treated as including the lesser and negative right to close an undertaking, subject to lawful public-interest restriction. Section 25-O of the Industrial Disputes Act was held to impose an unreasonable restraint because it required prior approval for closure, allowed refusal on vague standards, lacked recorded reasons, appeal or review, and exposed the employer to penal consequences; Section 25-R was invalid to that extent. Article 31C did not save the provisions, as the amendment was not applied retrospectively to validate a law unconstitutional when enacted. The closure-control regime was therefore struck down as an excessive restraint on business freedom.

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Issues: (i) whether the right to close down a business is an integral part of the fundamental right to carry on business under Article 19(1)(g) of the Constitution of India; (ii) whether Section 25-O of the Industrial Disputes Act, 1947 and the connected penal provision in Section 25-R, insofar as they relate to closure under Section 25-O, impose an unreasonable restriction under Article 19(6); and (iii) whether Article 31C saves the impugned provisions from challenge under Article 19.

Issue (i): whether the right to close down a business is an integral part of the fundamental right to carry on business under Article 19(1)(g) of the Constitution of India

Analysis: The right to carry on business was held to include the lesser and negative aspect of the right to close down an undertaking. That right was not treated as a separate property right, but as part of the freedom guaranteed by Article 19(1)(g). At the same time, the right was not equated with an absolute right to do nothing at all, and it remained subject to lawful restriction in the public interest.

Conclusion: The right to close down a business is an integral part of the fundamental right to carry on business.

Issue (ii): whether Section 25-O of the Industrial Disputes Act, 1947 and the connected penal provision in Section 25-R, insofar as they relate to closure under Section 25-O, impose an unreasonable restriction under Article 19(6)

Analysis: Section 25-O required prior approval for closure, empowered refusal on vague standards of adequacy, sufficiency, and public interest, did not require recorded reasons, did not impose a time limit for refusal in all cases, gave no appeal, revision, or review, and exposed the employer to civil and penal consequences. The scheme was held to tilt the balance excessively against the employer and to permit arbitrary and whimsical refusals, making the restriction more than reasonable regulation. The connected penal provision in Section 25-R was invalid to the extent it enforced the unconstitutional closure regime.

Conclusion: Section 25-O was unconstitutional and Section 25-R was invalid insofar as it penalised breach of Section 25-O.

Issue (iii): whether Article 31C of the Constitution of India saves the impugned provisions from challenge under Article 19

Analysis: The amended Article 31C was not applied retrospectively to validate a pre-existing law enacted before the amendment. The Court held that the emergency-related argument under Article 358 could not be combined with Article 31C so as to preserve a law that was unconstitutional when enacted and only later came within the amended text of Article 31C. The impugned provisions were not shown to be laws giving effect to the relevant directive principles in a manner that would immunise them from challenge.

Conclusion: Article 31C did not save the impugned provisions.

Final Conclusion: The law governing prior approval for industrial closure was struck down as an excessive and unconstitutional restraint on the freedom to carry on business, and the orders made under it were rendered unenforceable.

Ratio Decidendi: A statutory prohibition on closure of an undertaking, backed by prior governmental approval and penal consequences, is invalid if it goes beyond reasonable regulation and substantially destroys the freedom guaranteed by Article 19(1)(g); later constitutional amendments do not retrospectively validate such a law unless their language clearly so provides.

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