Harinagar Sugar Mills Ltd. (Biscuit Division) & Anr. v. State of Maharashtra & Ors., 2025
The Right to shut down a business under Article 19(1)(g) upheld; closure under Industrial Disputes Act allowed despite administrative objections.
Judgement Details
Court
Supreme Court of India
Date of Decision
11 June 2025
Judges
Justice Sanjay Karol ⦁ Justice Prashant Kumar Mishra
Citation
Acts / Provisions
Section 13(1)(ia), Hindu Marriage Act, 1955
Section 25, Hindu Marriage Act, 1955
Facts of the Case
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The Harinagar Sugar Mills Ltd. (HSML) operated a biscuit division exclusively for Britannia Industries Ltd. (BIL) for over 30 years.
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In 2019, BIL terminated the Job Work Agreement, prompting HSML to file a closure application on August 28, 2019, under Form XXIV-C.
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The Deputy Secretary of the Maharashtra Government rejected the application as incomplete, causing delays despite HSML’s clarifications.
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Workers' unions approached the Industrial Tribunal and obtained a stay on closure.
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HSML’s challenge before the Bombay High Court was dismissed, leading to the Supreme Court appeal.
Issues
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Whether Article 19(1)(g) includes the right to close down a business, and under what circumstances.
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Whether HSML's closure application filed on August 28, 2019 was complete and valid under Section 25-O.
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Whether the Deputy Secretary had legal authority to demand revisions or interfere with closure decisions.
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Whether the Minister’s failure to apply independent mind invalidated the government’s response.
Held
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The Right to close down a business is constitutionally protected but not absolute.
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The HSML's closure was legally effective from October 2019 (post 60-day period).
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The Deputy Secretary’s communications were ultra vires (beyond authority).
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Workers’ objections and Tribunal stay could not override a valid closure process.
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Compensation already paid to employees during the litigation would not be recoverable.
Analysis
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The judgment reaffirms the constitutional freedom to disengage from business as intrinsic to Article 19(1)(g).
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The Court maintained a balanced approach, ensuring employee protection while allowing businesses to make rational economic decisions.
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The ruling criticized bureaucratic overreach where an unauthorized official interfered with a legal process.
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The decision aligns with Excel Wear and Orissa Textile, confirming the constitutional validity of Section 25-O as amended.
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By enforcing a strict timeline for deemed closure, the Court emphasized procedural compliance over subjective discretion.