BASICS OF LEGISLATION AND CASE LAW

DR.RAM MANOHAR LOHIA NATIONAL LAW UNIVERSITY

( FINAL PROJECT)

TOPIC- ABSOLUTE LIABILITY

(MC MEHTA V. UNION OF INDIA)

SUBMITTED BY SUBMITTED TO

ASHISH AMAR TIWARI MR.SHASHANK SHEKHAR

ROLL NO-32 DR.RAM MANOHAR

SECTION A LOHIA NATIONAL LAW

B.A.LL.B (HONS) UNIVERSITY.

1ST SEMESTER

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DECLARATION

I hereby declare that the project entitled Absolute Liability is a record of original work
done by me under the guidance of Mr Shashank Shekhar, Faculty member, Dr. Ram Manohar
National Law University, and this project has not performed the basis for the award of any
degree, diploma and similar project if any.

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ACKNOWLEDGMENT

I would like to take this opportunity to extend a word of my gratitude to my esteemed Study
of basics of Case law and Legislation teacher Mr. Shashank Shekhar, who had been a
constant source of inspiration for me in the pursuance of this project. Sir has been gracious
enough to guide me on the right path which has enabled me to strengthen my efforts. Also I
would like to thank Prof (Dr.) C.M. Jariwala for being a source of constant support in this
effort. I may also take this opportunity to wish the reader of my project a knowledgeable
experience. The project has been made with utmost care & with utmost finesse to see that the
information mentioned is to the best of the accuracy and correctness

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TABLE OF CONTENTS

DECLARATION..........................................................................................................................i
ACKNOWLEDGMENT.............................................................................................................ii
TABLE OF CASES....................................................................................................................iii
STATEMENT OF PROBLEM...................................................................................................iv
OBJECTIVES of RESEARCH...................................................................................................iv
HYPOTHESIS............................................................................................................................v
RESEARCH METHODOLOGY.................................................................................................v
ABSOLUTE LIABILITY.............................................................................................................1
FACTS........................................................................................................................................2
JUDGEMENT............................................................................................................................3
AFTER EFFECTS......................................................................................................................7
CONCLUSION..........................................................................................................................8
BIBLIOGRAPHY.......................................................................................................................vi

TABLE OF CASES

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A Lakshminath M Sridhar, RAMASWAMY IYERS THE LAW OF TORTS, 10th ed.,

LexisNexis Butterwood Wadhaw, Nagpur........................................................................v, vi
Bandhua Mukti Morcha v. Union of India and Ors...................................................................3
Charan Lal Sahu v. Union of India AIR 1990 SC 1480.............................................................7
Madhya Pradesh Electricity Board v. Shail Kumari JT 2002 1 SC 50.......................................7
Mushtaq Ahmend v. State of Jammu and KashmirVAIR 2009 J AND K 29.............................8
Rylands v. Fletcher (1868) LR 3 HL 330...................................................................................1
Union Carbide Corporation v. Union of India AIR 1990 SC 273..............................................7

STATEMENT OF PROBLEM
This project talks about how MC Mehta v UOI case brings the Absolutely Liability in INDIA.
How this case has become a precedent for the future case in India.

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OBJECTIVES of RESEARCH
What is Absolute Liability?
Situation of concept of law in other country.
How has MC Mehta case develops this law in India?
Application of this law in future cases.

HYPOTHESIS

The project would aim to answer the following questions

1. What is absolute liability?

2. How did the law come up in india?
3. What were the scenarios in the case of MC Mehta v Union of India
4. What was the opinion of Judges in this case?
5. How has this case set a Precedent for future cases?

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RESEARCH METHODOLOGY
The methodology to be used for the completion of the project is literary in nature; various
books and journals have been consulted for better understanding of this case at hand.

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ABSOLUTE LIABILITY

Absolute liability in its basic sense refers to no fault liability, in which the wrong doer is not
provided with exceptions which are provided in rule of strict liability. Absolute liability is
more stringent from of strict liability, the rule laid by Rylands v. Fletcher1 and was recognized
by Supreme Court of India in M. C. Mehta v. Union of India2 (Oleum gas leak case).3 This
case originated in the aftermath of oleum gas leak from Shriram Food and Fertilisers Ltd.
complex at Delhi. This gas leak occurred soon after the infamous Bhopal gas leak and created
a lot of panic in Delhi.4 Bhagwati CJ. was a pioneer in this important development, and he
didnt follow the rule laid in Rylands v. Fletcher5, on an important ground that the principles
established in the said case are not in keeping with the present day jurisprudential thinking.6
Justice Bhagwati also stated that the rule of strict liability was evolved in 19th century, the
time when nature industrial developments was at primary stage, in todays modern industrial
society where hazardous or inherently dangerous industries are necessary to carry out
development programme, thus this rule cannot be held relevant in present day context.

Also one cannot feel inhibited by this rule which was evolved in the context of totally
different social and economic structure.7 A clear distinction between Strict and Absolute
liability rule was laid down by SC in M.C.Mehta v. Union of India8 , giving four basic points
for it: First, only those enterprises will be liable which are betrothed in hazardous or
inherently dangerous activity, this implies that other industries not falling in the ambit stated

1 (1868) LR 3 HL 330:LRI

2 AIR 1987 SC 965

3 Ratanlal and Dhirajlal, THE LAW OF TORTS, 26th ed., pp.520-521

4 S.P.Singh, LA(1868) LR 3 HL 330:LRIW OF TORT,5th ed.,pp.281-282

5 (1868) LR 3 HL 330:LRI

6S.P.Singh, LAW OF TORT,5th ed.,pp.281-282

7Ibid

8 AIR 1987 SC 965

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above, will be covered under Strict liability rule9.Second, the escape of a dangerous thing
from ones land is not necessary, which means that the rule will be applicable to those injured
within the premise and person outside the premise. Third, rule doesnt have an exception,
which is provided in rule of Strict Liability. Four, the quantum of damages depends on the
magnitude and financial capability of the enterprise. SC very aptly also contended that ,The
enterprise must be held to be under an obligation to provide that the hazardous or inherently
dangerous 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 must be absolutely
liable to compensate for such damage and it should be no answer to the enterprise to say that
it had taken all reasonable care and that the harm transpired without any negligence on its
part.

FACTS
Shriram Food and Fertilizers Industry a subsidiary of Delhi Cloth Mills Limited was
producing caustic and chlorine. On December 4th and 6th 1985, a major leakage of petroleum
gas took place from one of the units of Shriram Food and Fertilizers Limited in the heart of
the capital city of Delhi which resulted in the death of several persons that one advocate
practicing in the Tis Hazari Courts died.

The leakage was caused by a series of mechanical and human errors. This leakage resulted
from the bursting of the tank containing oleum gas as a result of the collapse of the structure
on which it was mounted and it created a scare amongst the people residing in that area.
Hardly had the people got out of the shock of this disaster when, within two days, another
leakage, though this time a minor one took place as a result of escape of oleum gas from the
joints of a pipe.

Shriram Foods and Fertilizer Industries had several units engaged in the manufacture of
caustic soda, chlorine, hydrochloric acid, stable bleaching powder, super phosphate,
vanaspati, soap, sulphuric acid, alum anhydrous sodium sulphate, high test hypochlorite and
active earth. All units were set up in a single complex situated in approximately 76 acres and
they are surrounded by thickly populated colonies such as Punjabi Bagh, West Patel Nagar,
Karampura, Ashok Vihar, Tri Nagar and Shastri Nagar and within a radius of 3 kilometres
from this complex there is population of approximately 2, 00,000.

On 6th December, 1985 by the District Magistrate, Delhi under Section 133(1) of Cr.P.C,
directed Shriram that within two days Shriram should cease carrying on the occupation of

9 Ratanlal and Dhirajlal, THE LAW OF TORTS, 26th ed.,p.520

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manufacturing and processing hazardous and lethal chemicals and gases including chlorine,
oleum, super-chlorine, phosphate, etc at their establishment in Delhi and within 7 days to
remove such chemicals and gases from Delhi. At this juncture M.C.Mehta moved to the
Supreme Court to claim compensation by filing a PIL for the losses caused and pleaded that
the closed establishment should not be allowed to restart.

This writ petition under Article 32 of the Constitution had come before the court on a
reference made by a Bench of three Judges. The reference was made because certain
questions of seminal importance and high constitutional significance were raised in the
course of arguments when the writ petition was originally heard. The facts giving rise to the
writ petition and the subsequent events have been set out in some detail in the Judgment
given by the Bench of three Judges P. N. BHAGWATI, C.J.I., D. P. MADON AND G. L.
OZA, JJ. on 17th February 1986 (reported in AIR 1987 SC 965). The Bench of three Judges
permitted Shriram Foods and Fertilizer Industries to restart its power plant as also plants for
manufacture of caustic soda and chlorine including its by-products and recovery plants like
soap, glycerin and technical hard oil, subject to the conditions set out in the Judgment.

While the writ petition was pending another applications were filed by the Delhi Legal Aid
and Advice Board and the Delhi Bar Association for award of compensation to the persons
who had suffered harm on account of escape of oleum gas. These applications for
compensation raised a number of issues of great constitutional importance and the Bench of
three Judges therefore formulated these issues and asked the petitioner and those supporting
him as also Shriram to file their respective written submissions so that the Court could take
up the hearing of these applications for compensation. When these applications for
compensation came up for hearing it was felt that since the issues raised involved substantial
questions of law relating to the interpretation of Arts. 21 and 32 of the Constitution, the case
should be referred to a larger Bench of five Judges and thus the case stood in the Coram of
the Honble bench consisting of P. N. BHAGWATI, C.J.I., RANGANATH MISRA, G. L.
OZA, M. M. DUTT AND K. N. SINGH, JJ.

JUDGEMENT
The first question which requires to be considered is as to what is the scope and ambit of the
jurisdiction of this Court under Article 32.

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The Court wholly endorsed what had been stated by Bhagwati, J. in Bandhua Mukti Morcha
v. Union of India and Ors. as regards the true scope and ambit of Article 32. It may now be
taken as well settled 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 of the people and for
that purpose this Court has all incidental and ancillary powers including the power to forge
new remedies and fashion new strategies designed to enforce the fundamental rights.

The next question which arises for consideration on these applications for compensation is
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. The issue of availability
of Article 21 against a private corporation engaged in an activity which has potential to affect
the life and health of the people was vehemently argued by counsel for the applicants and
Shriram.10

The Court traced the evolution of the Doctrine of State Action to ascertain whether the
defendants in this case fall under the definition of the term state, as provided under Article 12,
or not. The Court also looked into the Industrial Policy of the Government. Under the
Industrial Policy Resolution 1956 industries were classified into three categories having
regard to the part which the State would play in each of them. The first category was to be the
exclusive responsibility of the State. The second category comprised those industries which
would be progressively State owned and in which the State would therefore generally take the
initiative in establishing new undertakings but in which private enterprise would also be
expected to supplement the effort of the State by promoting and development undertakings
either on its own or with State participation. The third category would include all the
remaining industries and their future development would generally be left to the initiative and
entRatanlal and Dhirajlal, THE LAW OF TORTS, 26th ed.,p.520erprise of the private
sector.11

If an analysis of the declarations in the Policy Resolutions and the Act is undertaken, we find
that the activity of producing chemicals and fertilisers is deemed by the State to be an
industry of vital public interest, whose public import necessitates that the activity should be
ultimately carried out by the State itself, in the interim period with State support and under
State control, private corporations may also be permitted to supplement the State effort. The
argument of the applicants on the basis of this premise was that in view of this declared
10 Ratanlal and Dhirajlal, THE LAW OF TORTS, 26th ed.,p.520

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industrial policy of the State, even private corporations manufacturing chemicals and
fertilisers can be said to be engaged in activities which are so fundamental to the Society as to
be necessarily considered government functions.

ANALYSIS

Hazardous industries are enterprises engaged in hazardous process which may cause adverse
effect on health of the people and the environment unless special care is taken to the leakage
of the raw material or by product. In this era of open global market economy hazardous
industries are playing a decisive role in the economic development and in the advancement of
the economy, but simultaneously they are causing the problem of risk to human life and
environment. The developing countries like India suffer from the acute problem of
environmental pollution.

The origin of the national policy on chemical and hazardous industries relates to two major
incidents of gas leakage, the Bhopal tragedy in 1994 and the oleum gas leak tragedy in 1995.
In these cases the Honble Supreme Court felt that the English doctrine of Strict Liability
adopted by the House of Lords in Rayland v. Fletcher would not suffice the changing need of
the liability principle in India. So the Honble Supreme Court felt the need of adopting the
principle of Absolute Liability or else the Court of law would fail to provide justice to the
victims of these large scale environmental disaster. Where an enterprise is engaged in a
hazardous or inherently dangerous activity and harm results to anyone on account of an
accident in the operation of such hazardous or inherently dangerous activity resulting, for
example, in escape of toxic gas 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 in the tortious principle of strict liability. The larger and more
prosperous the enterprise, the greater must be the amount of compensation payable by it for
the harm caused on account of an accident in the carrying on of the hazardous or inherently
dangerous activity by the enterprise.

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The principles that came up from this historical case was the Principle of Absolute Liability,
secondly the Principle of Polluters Pays, thirdly the Principle of Precautionary Measures, and
finally the Principle of Highest Safety Standards came up in this particular case.

There after a number of enactments were made by the union legislature for the purpose of
controlling the environmental pollution, like the Hazardous Waste (Management and
Handling) Rules, 1989, secondly the Manufacturing Storage and Import of Hazardous Waste
Chemical Rules, 1989, thirdly the Public Liability Insurance Act, 1991, fourthly the National
Environmental Tribunal Act, 1995, an even many more legislation are made on the protection
of environment from pollution.

Again the scope of Art 21 was enlarged the Right to human health and healthy environment
was approved, the Right of enjoyment of pollution free water and air for full enjoyment of
life as a part of Right to Life was approved. And Right to clean environment was also
comprehended as a Right under Art 21 of The Constitution of India.

In addition to all these the judgment of M.C.Mehta case gave a new dimension to the Tort
Laws in India. Before this case the principle of strict liability was applicable where the
defendant could take the plea of defenses, but this ruling of the Supreme Court the Absolute
principle came up. Though the Court of Law is always open to hear any kind of injustice
done to people and it provides compensation to the victims whose rights are violated or who
have suffered loss due to the negligence of others but at this juncture the Honble Court could
not provide any compensation to the victims of the oleum gas leake tragedy. The Court could
have given an interim compensation to the victims and to the families of those who have died
in the course of the disaster. The interim compensation could have helped the victims by way
of proper habilitation, providing proper medical facilities and others.

Latter the Honble Court has given exemplary compensation to the victims of the oleum gas
tragedy and even today the Court is of the view that the compensation that was granted was
not enough as compared to the losses suffered. Till date the Honble Court is thinking of
providing more compensation to the victims, as people who are living even today in the area
where the tragedy took place are suffering a lot, as the oleum gas is still present in the
atmosphere. A lot of cases of still born child came up, and the medical report of many showed
that the presence of oleum gas is the reason for those still born child. What ever may it be the
situation I hope that the Honble Court will definitely provide the victims with appropriate
compensation, as the Honble Court deems fit keeping in mind the principles of Natural
Justice.

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AFTER EFFECTS

In the case of Charan Lal Sahu v. Union of India12, this case was in accordance with the Act
formulated for the protection of the victims of Bhopal gas tragedy, is valid or not, doubts
were expressed by Mishra C.J as to correctness of rule as it was held that Mehta case was an
obiter and was differentiated from the western countries. The doubts so expressed in the
above case were no accepted in Indian Council for Environmental Legal Action v. Union of
India13 and Mehta case rule was not called to be an obiter.14 This case related to hazardous
chemical industries, releasing highly toxic sludge and toxic untreated waste water which had
percolated deep into the oil rendering the soil unfit for cultivation and water unfit for
irrigation, human or animal consumption resulting in untold misery to the villagers of
surrounding areas.15 SC directed the government determine and recover the cost of remedial
measure from the private companies which polluted the environment by attaching all their
assets and further use to restore soil, forest etc. These industries were characterized by the SC
as rouge industries and were ordered to be closed down. In recognition of the principle of
absolute liability, the concept mentioned above is based on polluters pay. Considering the
position of high court on the principle of absolute liability, division bench of the Madhya
Pradesh High Court applied the rule in the case, where due to negligence of electricity board
a person died of electric shock, high court recognized the principle of absolute liability here
as it was due to negligence on the part of the board as it failed to maintain the wires properly.
SC in the case of Madhya Pradesh Electricity Board v. Shail Kumari16 , applied the same rule,
in this case a cyclist was entrapped and electrocuted by a live-wire. The board tried to defend

12 AIR 1990 SC 1480

13 AIR 1996 SC 1446

14 S.P.Singh, LAW OF TORT,5th ed.,pp.285

15 Ratanlal and Dhirajlal, THE LAW OF TORTS, 26th ed.,p.521

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by stating that the wire on the ground was a wire diverted b a stranger to misuse the energy.
The court held that the particular responsibility to supply electric energy is statutory
conferred on the board. If the energy so transmitted causes injury, it is the primary liability to
compensate the sufferer is that of the supplier of the electric energy.

The court also stated that a person undertaking an activity involving hazardous or risky
exposure to human life is liable under law of torts to compensate for the injury, irrespective
of any negligence or carelessness on the part of the managers of such undertakings. In an
important case of Union Carbide Corporation v. Union of India17, paragraph 15 of the case
clearly states that in determining the compensation payable to Bhopal gas victims, absolute
liability principle was adopted. The inappropriateness of compensation given to the victims,
being a different issue all together, the relevant factor here is that of recognition of the
concept of absolute liability while paying compensation. Prior to conclusion of this section a
very recent case needs to be discussed in here, which is of Mushtaq Ahmend v. State of
Jammu and Kashmir18, in this case the state was negligent in maintaining electricity wire and
the victim died due to electric shock.

The court held that state being engaged in undertaking the activity of electricity supply, is
liable under the law of torts to compensate the petitioners for the death of the victim
irrespective of any negligence or carelessness on their part. Strict liability principle was held
here, although the principle so used was not of absolute liability, but the compensation
provided by court was in accordance with it. This part of the project being of great
importance as to it helped us to determine the very existence of principle of absolute liability,
we can see that to an extent the judiciary in India has recognized the principle and clearly
stated the principle is not merely an obiter but suits to the current situations in the country.

16 JT 2002 1 SC 50

17 AIR 1990 SC 273

18 AIR 2009 J and K 29

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CONCLUSION
The principle of Absolute liability so stated in M.C.Mehta19, oleum gas leak case, has been
extensively discussed and arguments formulated in the paper were solely based on the
question and hypothesis formulated in the chapter. It is necessary to conclude the project, as
researcher believes that there is a need to formulate findings and provide for suggestions. The
research questions has two parts first being is there a need for recognition of concept of
absolute liability and other being whether judiciary has recognized the same principle.
Dealing with the first part, the conclusion is that there is an urgent and inherent need for a
principle of absolute liability as, the rule of strict liability which is followed in most of the
countries, cannot be taken as the sole principle to provide for compensation, it being
formulated about two centuries ago, when the level of technological development was nearly
nothing in comparison with todays development. For the purpose of providing better remedy
under civil law and broadly development of our own jurisprudence, to suit our own needs we
require a principle which will be just to both the wrongdoer and the sufferer. Absolute
liability is in accordance with the prevailing situation in our country, we are destination for
globalization and large investments and when the nature of industries is mostly hazardous.
Second part of the question deals with the existence of the principle of absolute liability in
India or recognition of principle by our judiciary.

A very important finding here is that yes to a extent their exist a principle of absolute liability
and judiciary recognizes, and the principle so given by court in the case of M.C.Mehta is not
merely an obiter but is an important aspect which suits our present day conditions. The word
extent used above is of great significance, researcher believes that although the judicial
recognition has been done, but it is not in accordance with the required level which is very
much required looking at prevailing situations in our country. Also the principle of absolute
liability, according to the researcher, should not pay compensation to the sufferers on the
basis of the paying capacity of the industries.

Agreeing with the SC explanation of the very point that, it will help one to get exemplary
damages and also larger the industries more the compensation can be provided to the
sufferers, the consequences will be that if the industry is small, then the compensation will be
paid to the victim not in accordance with the damage suffered, which is the basic principle of
tortuous liability, but in relation to the paying capacity of the wrongdoer. Thus according to
the researcher the element of paying capacity should be restricted to the large industries and
for the rest the quantum of damages suffered should be used which is in accordance with tort
law. Concluding, the research question formulated before, the findings are mix as the first
part stands true that there is a need for recognition of concept of absolute liability and the
later part is not true as, judiciary has recognized the principle to an extent. The hypothesis is

19 Ibid

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so dealt also has the same reply as, the first part of it stands false and the second part of it
stands true. Thus there is a need for more recognition of concept of absolute liability in India.

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BIBLIOGRAPHY

Books:

A Lakshminath M Sridhar, RAMASWAMY IYERS THE LAW OF TORTS, 10th ed.,

LexisNexis Butterwood Wadhaw, Nagpur

Law of Torts by Dr. R.K. Bangia. (Allahabad Law Agency- Law Publishers).

Ratanlal and Dhirajlal, THE LAW OF TORTS, 26th ed., LexisNexis Butterwood Wadhaw,
Nagpur

S.P.Singh, LAW OF TORT, 5 th ed. 2010, Universal Law Publishers Co., New Delhi

Vivienne Harpwood, MODERN TORT LAW, 17th ed., Routledge .Cavendish , USA

W.V.H Rogers, WINFIELD AND JOLOWICZ TORTS,8th ed. 2010, Sweet and Maxwell,
UK.

Websites:

www.jstor.org/stable/4398052

http://www.manupatrafast.in/pers/Personalized.aspx

www.californiaattorneygroup.com/strict-liability.html

www.jstor.org/stable/106909

http://www.manupatrafast.in/pers/Personalized.aspx

http://www.lexuniverse.com/torts/india/Vicarious-Liability-&-Rules-OfStrict-And-
Absolute-Liability.html