Excel Wear v. Union of India

Facts

• Excel Wear challenged the constitutional validity of S.25O of the ID Act (requiring prior government permission for closure of establishments with 300+ workers)
• Argued it violated Art.19(1)(g): fundamental right to carry on trade/business includes right to close it
• Contended that forcing employers to continue loss-making operations amounts to forced labour on the employer

Issue

1. Whether the requirement of prior government permission before closure violates the employer's fundamental right under Art.19(1)(g).

Held

• Prior permission requirement is constitutionally VALID as a reasonable restriction under Art.19(6) in the interest of the general public
• Workers' livelihoods constitute "general public" interest justifying regulation of closure
• However, if an employer demonstrates that running the business at continued loss is genuinely impossible, denial of permission would be unreasonable
• Balance: legitimate regulation YES; perpetual forced operation NO

Ratio Decidendi

The right to carry on business (Art.19(1)(g)) includes the right to close it, but this right is subject to reasonable restrictions in public interest (Art.19(6)). Workers dependent on the establishment have a legitimate interest that justifies requiring government oversight before closure. However, restrictions must remain reasonable; forcing indefinite loss-making operation would cross into unreasonableness.