Jan 29, 2022 10:57 UTC
Jan 29, 2022 at 11:00 UTC
Case Study: M. C. Mehta v Union of India (Oleum gas leak case)
“Where an enterprise is engaged in a hazardous or dangerous activity and harm results to anyone on account of an accident in the operation of such hazardous or inherently dangerous activity, the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis-à-vis the tortious principle of strict liability under the rule in Rylands v Fletcher.”
Citation: (1987) 1 SCC 395
Date of Judgement: 20 December 1986
Bench: Then Chief Justice P.N.Bhagwati, Justice Ranganath Misra, Justice G.L.Oza, Justice M.M.Dutt and Justice K.N.Singh
The notorious incident of 1984 of MIC gas leak in a pesticide plant of UCIL (Union Carbide India Ltd.), located in Bhopal, shook the country as the accident took thousands of lives and thousands suffered irreparable physical damage. “The Bhopal gas tragedy remains unparalleled in the history of industrial disasters anywhere in the world.” The incident was still so fresh when on December 4 and 6 1985, oleum gas leaked from one of the units of Shriram Foods and Fertilizer Industries, Delhi, which affected several people and even caused death. This led to the filing of a PIL which raised the questions regarding the methods of determining the liability of the corporations employing hazardous technology and producing toxic or dangerous substances and how the hazard to the workmen of such industries and the community can be minimized.
After the Bhopal gas tragedy, the government became conscious of the need to examine the industries that are involved in the manufacturing of hazardous substances and thus, pose a threat to the surroundings. It became a point of concern whether the industries employing hazardous technology and producing dangerous commodities were equipped with proper and adequate safety and pollution control devices and whether they posed any danger to the workmen and the community living around them.
Originally the petition was heard by a bench of three judges and the judgement was passed on 17th February 1986, which only dealt with the question whether the caustic chlorine plant of Shriram should be allowed to be reopened as the operation of this plant does involve a certain amount of hazard or risk to the community. Then the case was referred to a constitution bench which decided various legal questions that arose in the matter and the judgement was passed on December 20, 1986.
Initially the writ petition was filed in order to prohibit various units of Shriram from operating on the ground that they were hazardous to the community and that they should be relocated but the escape of oleum gas led to the filing of various applications by Delhi Legal aid and Advice Board and Delhi Bar Association for the award of compensation to the persons who suffered. During the hearing for the compensation, it was found that the case involves substantial questions of law so the case was referred to the constitution bench.
Facts of the case
- Delhi Cloth Mills Ltd., a public limited company, having its registered office in Delhi, ran an enterprise called Shriram Foods and Fertilizer Industries which engaged in manufacture of caustic soda, hydrochloric acid, stable bleaching powder, superphosphate, vanaspati, soap, sulphuric acid, alum anhydrous sodium sulphate, high test hypochlorite and active earth.
- After the Bhopal gas tragedy, the Labour ministry of Government of India commissioned “Technica”, a UK firm, to examine the caustic chlorine plant of Shriram and submit a report regarding the potential problems related to the plant.
- The Delhi Administration appointed an expert committee, The Manmohan Singh Committee, to inspect various operations of caustic chlorine plant of Shriram. The Committee made some recommendations with a view to minimize the hazard to public and the plant was not allowed to be restarted unless the recommendations have been complied with.
- On December 4 1985 a major leakage of oleum gas and a minor one on December 6 1985 took place in a unit of Shriram so the District Magistrate, Delhi ordered Shriram to cease the manufacturing and processing of hazardous chemicals and gases.
- Few other committees such as ‘Agarwal Committee’ and ‘Nilay Choudhary Committee’ and ‘Seturaman Committee’ were also appointed to see if the recommendations have been complied with by Shriram or not.
- Meanwhile various orders were made by the authorities directing Shriram to stop the industrial manufacturing and processing and orders were issued to Shriram to relocate the plants.
- The Court found that all the recommendations made by various committees have been complied with by the management of Shriram and thus decided to permit Shriram to restart its power plant along with the plants that manufacture caustic chlorine and its by-products by vacating the orders made by authorities temporarily. But the permission to restart was subjected to several conditions imposed by the Court which were to be strictly followed or the permission to operate would be withdrawn.
- Rest of the issues that involved substantial questions of law were formulated by the Court and referred to the constitution bench.
Referring to the rule of liability in Rylands v Fletcher, the Court stated that law cannot remain static and it needs to keep changing according to the needs of ever evolving society. The Court cannot allow judicial thinking to be constricted by law as it prevails in England and we need to build up our own jurisprudence. It was held by the Court that an enterprise which is engaged in a hazardous or inherently dangerous activity and poses a threat to health and safety of the workmen and people residing in the surrounding areas, owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone, that the highest safety standards have been complied with and in case of accidents, regardless of whether there was negligence or not on the part of the enterprise, the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident as a social cost of carrying on the hazardous activity and making profit out of it.
“The measure of compensation in these kinds of cases must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect. The larger and more prosperous the enterprise, the greater must be the amount of the compensation payable by it for the harm caused on account of an accident in the carrying on of hazardous and inherently dangerous activity by the enterprise.”
Regarding Article 32, the Court held that the court is free to devise any procedure appropriate for the enforcement of fundamental rights, it has the implicit power to issue whatever direction, order or writ is necessary and has the power to grant remedial relief which includes the power to award compensation.
It was held that in case of violation of fundamental rights or other legal rights of a person or a class of persons who by reason of poverty or disability or socially or economically disadvantaged position, cannot approach a court of law for justice, it would be open to any public-spirited individual or social action group to bring an action for vindication of the fundamental or other legal right of such individual or class of individuals not only by filing a regular writ petition but also by addressing a letter to the court.
In the case of public interest litigations, letters addressed even to an individual judge are entertainable and for such letters there is no preferred form of address.
Legal Issues involved
- A preliminary objection was raised contending that the Court should not proceed to decide these constitutional issues since there was no claim for compensation in the writ petition originally made. The petitioner could have applied for amendment of the writ petition so as to include a claim for compensation but no such application for amendment was made.
“The Court while dealing with an application for enforcement of a fundamental right must look at the substance and not the form.”
It was held by the Court that the applications for compensation made by the Delhi Legal Aid & Advice Board and the Delhi Bar Association cannot be thrown out as these are for the enforcement of fundamental right to life enshrined in Article 21 of the Constitution and in the situations such as violation of a fundamental or other legal right of a person or class of persons, who by reason of poverty or disability or socially or economically disadvantaged position cannot approach a Court of law for justice, it would be open to any public spirited individual or social action group to bring an action for vindication of the fundamental or other legal right of such individual or class of individuals and this can be done not only by filing a regular writ petition but also by addressing a letter to the Court. Thus, the Court upheld the validity of the applications made for compensation at the later stage.
2. What is the scope and ambit of the jurisdiction of the Court under Article 32 since the applications for compensation made by the Delhi Legal Aid and Advice Board and the Delhi Bar Association are applications sought to be maintained under Article 32?
The Court referred to the Bandhua Mukti Morcha v. Union of India and stated that Article 32 does not merely confer power on this Court to issue a direction, order or writ for enforcement of the fundamental rights but it also lays a constitutional obligation on this Court to protect the fundamental rights and for that purpose this Court has all incidental and ancillary powers particularly in the case of poor and disadvantaged.
Court also held in S.P.Gupta case, PUDR v Union of India and in Bandhua Mukti Morcha Case that procedure should not stand in way of access to justice to the weaker sections and the Court will not insist on a regular writ petition where the poor and disadvantaged are concerned and even a letter addressed by a public spirited individual or a social action group acting pro bono publico would suffice to invoke the jurisdiction of the Court.
“We wholly endorse this statement of law in regard to the broadening of locus standi and what has come to be known as epistolary jurisdiction.”
Moreover, it was held that the letters addressed to an individual judge should not be rejected merely because they were not addressed to the court or the chief justice. This is because the letters would ordinarily be from poor and disadvantaged people who might not be aware of the procedure. Even the affidavits with the letters were held not to be necessary. Court said that Article 32(1) and 32(2) enable courts to devise any procedure appropriate for the enforcement of a fundamental right and can issue whatever direction, order or writ is necessary, including all incidental or ancillary powers.
“The power of the court is not only injunctive in ambit, that is, preventing the infringement of a fundamental right, but it is also remedial…”
3. Whether Article 21 is available against Shriram which is owned by Delhi Cloth Mills Limited, a public company limited by shares and which is engaged in an industry vital to public interest and with potential to affect the life and health of the people?
Court went on to determine in what cases a corporation could be termed as “other authority” under Article 12 because only in that case Article 21 can be availed against Shriram. Various cases such as Rajasthan state Electricity Board v Mohan Lal , Sukhdev Singh v Bhagatram and R.D.Shetty v International Airport Authority were discussed in the judgement as they proposed tests and methods to determine whether a corporation can be termed as “other authority” under Article 12. These judgements were treated as guidelines in order to examine whether a private corporation such as Shriram comes within the ambit of Article 12. Court said that the industrial policy of the government and the public interest importance given by the state to the activity carried on by such private corporation will have to be examined in order to assess the functional role allocated to such corporation.
The Court found that Shriram is registered under the Industries Development and Regulations Act, 1951, so it’s activities and license are under the control of the government. Various sections of the Act such as section 18-A, 18-AA and 18-G give control to the government over the various activities of Shriram. It also needs to obtain licenses under the Factories Act, and the Delhi Municipal Act, 1957. Shriram is also subjected to the regulations under Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981.
Even after considering all these factors, the Court declined to decide on the point whether Shriram would come under the ambit of Article 12 or not. Since this question was not decided by the Court so the Court directed the Delhi Legal Aid and Advice Board to take up the cases of all those who have suffered on account of oleum gas leak.
4..What is the measure of liability of an enterprise which is engaged in a hazardous or inherently dangerous industry, if by reason of an accident occurring in such industry, persons die or are injured, does the rule in Rylands v. Fletcher apply?
No, the rule in Rylands v Fletcher does not apply.
It was held by the court that an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. The enterprise is under an obligation to provide that the hazardous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity the enterprise is absolutely liable to compensate for such harm and it should be no answer for the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part. The compensation is the social cost of carrying on such activity. Thus, Shriram was held to be strictly and absolutely liable to compensate all those who were affected by the gas escape and such liability is not subject to any of the exceptions which operate vis-à-vis the tortious principle of strict liability under the rule in Rylands v Fletcher.
 Khanna, B.K., All You Wanted To Know About Disasters (New Delhi: New India Publishing Agency, 2005), p.155
 (1987) 1 SCC 395, para 32
  2 SCR 67
  (Suppl) SCC 87
  1 SCR 456
 M.C.Mehta v U.O.I, Para 4
 AIR 1967 SC 1857
 (1975) 1 SCC 421
 (1979) 3 SCC 489
 (1868) LR 3 HL 330