Court has propounded several tests for determining reasonableness for purpose of Article 19(1)(g). These have ranged from testing restrictions for arbitrariness [Dwarka, AIR 1954 SC 224; Shree Meenakshi Mills, AIR 1974 SC 366], excessiveness [Chintaman Rao, AIR 1951 SC 118] and discerning their objective of compliance with Directive Principles of State Policy [Saghir Ahmad, (1955) 1 SCR 707; Jalan Trading Co., AIR 1973 SC 233; Indian Handicrafts Emporium, (2003) 7 SCC 589]. Two-Judge Bench in M.R.F. Ltd., (1998) 8 SCC 227 consolidated body of precedent on Article 19(1)(g).
Court has also consistently held, restrictions on freedom to carry on trade and business can take form of a complete prohibition [Narendra Kumar, AIR 1960 SC 430]. Two-Judge Bench in B.P. Sharma, (2003) 7 SCC 309 has espoused a higher threshold for imposition of a prohibitive restriction.
Two-Judge Bench of this Court in Om Kumar, (2001) 2 SCC 386 introduced a test of proportionality for determining reasonableness of restrictions on freedoms guaranteed under Article 19(1). Constitution Bench in Modern Dental, (2016) 7 SCC 353 validated test of proportionality. K S Puttaswamy, (2019) 1 SCC 1 fleshed out contours of a proportionality analysis.
“A measure restricting a right must have a legitimate goal. It must be a suitable means of furthering this goal. It must not have a disproportionate impact on a right-holder. There must not be any less restrictive but equally effective alternative.”
As was noted, use of proportionality analysis reflects shift from a ‘culture of authority’ to a ‘culture of justification’ [Albie Sachs, The Strange Alchemy of Life and Law, (Oxford University Press, 2009)]. Therefore, Court must unhesitatingly use proportionality analysis while assessing violation of rights under Articles 14, 19(1)(g) and 21.
– Hon’ble Justice Dr. D.Y. Chandrachud, Akshay N. Patel v. Reserve Bank of India, [Civil Appeal No. 6522 of 2021].