In the case of Papnasam Labour Union vs Madura Coats Ltd (1994), The supreme court while considering Industrial dispute act, laid down principles and guidelines to be kept in mind for considering the constitutionality of a statutory provision upon a challenge on the alleged vice of unreasonableness of the restriction imposed by it:
(a) The restriction sought to be imposed on the Fundamental Rights guaranteed by Article 19 of the Constitution must not be arbitrary or of an excessive nature so as to go beyond the requirement of felt need of the society and object sought to be achieved.
(b) There must be a direct and proximate nexus or a reasonable connection between the restriction imposed and the object sought to be achieved.
(c) No abstract or fixed principle can be laid down which may have universal application in all cases. Such consideration on the question of quality of reasonableness, therefore, is expected to vary from case to case.
(d) In interpreting constitutional provisions, courts should be alive to the felt need of the society and complex issues facing the people which the Legislature intends to solve through effective legislation.
(e) In appreciating such problems and felt need of the society the judicial approach must necessarily be dynamic, pragmatic and elastic.
(f) It is imperative that for consideration of reasonableness of restriction imposed by a statute, the Court should examine whether the social control as envisaged in Article 19 is being effectuated by the restriction imposed on the Fundamental Rights.
(g) Although Article 19 guarantees all the seven freedoms to the citizen, such guarantee does not confer any absolute or unconditional right but is subject to reasonable restriction which the Legislature may impose in public interest. It is therefore necessary to examine whether such restriction is meant to protect social welfare satisfying the need of prevailing social values.
(h) The reasonableness has got to be tested both from the procedural and substantive aspects. It should not be bound by processual perniciousness or jurisprudence of remedies.
(j) Restriction imposed on the Fundamental Rights guaranteed under Article 19 of the Constitution must not be arbitrary, unbridled, uncanalised and excessive and also not unreasonably discriminatory. Ex hypothesis therefore, a restriction to be reasonable must also be consistent with Article 14 of the Constitution.
(k) In judging the reasonableness of the restriction imposed by clause (6) of Article 19, the Court has to bear in mind Directive Principles of State Policy.
(l) Ordinarily, any restriction so imposed which has the effect of promoting or effectuating a directive principle can be presumed to be a reasonable restriction in public interest.
In Meenakshi Mills case[1], the contention that Section 25-N has imposed unreasonable restriction on the fundamental right to hold property and to carry on business activities has been rejected by indicating that the object underlying the enactment of Section 25-N by introducing prior scrutiny of the reasons for retrenchment is to prevent avoidable hardship to the employees resulting from retrenchment by protecting existing employment and to check the growth of unemployment which would otherwise be the consequences of retrenchment in industrial establishment employing a large number of workmen.
It has also been indicated in the said decision that the restriction imposed in Section 25-N on the, right of retrenchment of the employer is intended to maintain higher tempo of production and productivity by preserving industrial peace and harmony, and in that sense, Section 25-N seeks to give effect to the mandate contained in the Directive Principles of the Constitution as contained in Articles 38, 39(a), 41 and 43.
It has been indicated in Meenakshi Mills case that ordinarily any restriction so imposed which has the effect of promoting or effectuating a directive principle can be presumed to be reasonable restriction in public interest and a restriction imposed on the employer’s right to terminate the service of an employee is not alien to the constitutional scheme which indicates that the employer’s right is not absolute.
We may indicate here that even in Excel Wear v. Union of India (1978) it has been held that:
“the right to close a business is an integral part of the fundamental right to carry on a business. But as no right is absolute in its scope so is the nature of this right. It can certainly be restricted, regulated or controlled by law in the interest of general public.”
Reference
Papnasam Labour Union vs Madura Coats Ltd on 8 December, 1994
[1] Workmen v. Meenakshi Mills Ltd. (1992)