Article 19(1)(g) - The Legal Chamber

Supreme Court Upholds Right to Shut Business, Orders ₹15 Crore Compensation for Workers

14Jun

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Supreme Court

Supreme Court Upholds Right to Shut Business, Orders ₹15 Crore Compensation for Workers

This judgment primarily interprets Section 25-O of the Industrial Disputes Act, 1947, regarding deemed closure. The Court examined if an application for closure was complete and if the State's communication constituted a valid refusal within the statutory 60-day period for deemed permission. It also considered the "appropriate Government's" role and Article 19(1)(g) (freedom of trade) implications. Facts Of The Case: The case originated from an application by Harinagar Sugar Mills Ltd. (Biscuit Division) seeking permission to close its undertaking, as required under Section 25-O of the Industrial Disputes Act, 1947. The company sought closure due to various reasons, including financial viability issues. The central dispute revolved around whether the State of Maharashtra, as the appropri...

Who Pays for Poor Students?:Supreme Court Stops Kerala’s Extra Fee on NRI Medical Students

The Supreme Court held that the Kerala government's directive to create a corpus fund from NRI student fees lacked legislative backing, violating the principle that fees cannot be levied without statutory authority. It ruled that unaided institutions retain autonomy over fee structures, subject only to anti-profiteering regulations, and emphasized that welfare measures must be enacted through proper legislation. The Court allowed colleges to retain collected funds but mandated their use for subsidizing economically weaker students. Facts Of The Case: The case arose from a dispute over the Kerala government's directive requiring self-financing medical colleges to contribute a portion of fees collected from Non-Resident Indian (NRI) students towards a corpus fund. This fund aimed to subs...

“Can Employers Enforce a Minimum Service Period” Supreme Court Upholds Employees Must Pay for Premature Resignation

The Supreme Court upheld the validity of Vijaya Bank's employment bond clause requiring a minimum 3-year service period or payment of Rs. 2 lakhs for premature resignation. The Court ruled this condition does not violate Section 27 of the Indian Contract Act (restraint of trade) as it applies during employment, nor is it opposed to public policy under Section 23. The judgment clarified that while standard form contracts reflect unequal bargaining power, such terms remain enforceable unless proven unconscionable or unreasonable. The Court recognized the bank's legitimate interest in maintaining workforce stability through such reasonable restrictions. This decision reinforces the distinction between restraints during employment versus post-employment and sets parameters for evaluating liqui...