It examines the landmark case MC Mehta Vs Union of India & Ors its impact on the law of the time, the advent of the rule of absolute liability, and the various important issues and points of contention of the case. The plaintiff alleges that an industrial plant caused a severe injury to his body after inhaling hazardous gas which was released from that plant. The plaintiff, who is from an economically marginalized group and facing poverty, is suffering daily because of his health issues. The treatment for the same is backed with hefty fees. Cut to the present moment, he is sitting in the court hall and waiting for the judgment to be in his favor. On the other hand, the defendant, a well-known industrialist, and his advocate are confident about their win, as they provided sufficient evidence to prove the defense ‘act of god’ to escape strict liability. And, the judge delivered judgment in favor of the defendant stating that the incident happened without any anticipation and has been caused by nature, as well as is practically impossible for the defendant to foresee the incident.
Don’t you think this is a grave injustice? Yes, it is. Fortunately, this will never happen in present-day India. The credit goes to the rule of ‘Absolute Liability’ which was laid down in the case of MC Mehta Vs Union of India & Ors or the ‘Oleum gas leak case’. This is the case that established the rule of absolute liability as well as the concept of deep pockets. In this case, the Supreme Court ruled that a company was absolutely liable for the gas leakage regardless of its defenses marking a significant turning point in the history of Indian law and jurisprudence. This case can be remembered for its bold decision of introducing a new rule that even England doesn’t, and become exemplary that a law cannot afford to remain static.
Facts of MC Mehta Vs Union of India Case
It’s very essential to know the facts of the case such that one can ascertain all information about the case to take the right decision judiciously. So, let’s dive into the details or facts of the present case.
A privately owned fertilizer plant with its base in Delhi is called Shriram Food and Fertilizers, a subsidiary of Delhi Cloth Mills Limited. Various plants manufacture chemicals like 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 built in a single complex that is about 76 acres large and encircled by densely populated neighborhoods like Punjabi Bagh, West Patel Nagar, Karampura, Ashok Vihar, Tri Nagar, and Shastri Nagar. Within a 3-kilometer radius of this complex, there are around 200,000 people. The caustic chlorine facility was established in 1949 and employs nearly 263 people, consisting of executives, supervisors, staff, and workers.
The life and health of the plant’s employees as well as those living nearby are presumably in danger due to all of the hazardous and lethal chemicals that the plant produces. The factory emitted hazardous chemicals that created a public nuisance as a result of its chemical operations. Thus, MC Mehta filed a writ petition in Supreme Court under Articles 21 and 32 through the way of Public Interest Litigation (PIL) to order the Shriram Caustic Chlorine and Sulphuric Acid Plant to be shut down and relocated. This is not the key issue; rather, the main event, in this pending case, occurred on December 4, 1985, when a sizable oleum gas leak from one of Shri Ram’s units affected a large number of people, including both the general public and workers, and resulted in the death of an advocate, who is working in the Tis Hazari Court, due to oleum gas inhalation.
Likewise, this incident reminds us of the Bhopal gas tragedy. The collapse of the structure on which it was mounted caused the tank storing oleum gas to explode, causing this leakage, which frightened the residents. The public had just returned from the shock of the disaster when, two days later, on December 6, another leak—this time, a minor one—occurred as a result of oleum gas escaping from a pipe’s joints. Hence, it is clear that the leakage was caused by a series of mechanical and human errors.
Immediately, the District Magistrate of Delhi issued an order on December 6, 1985, under Sub-section 1 of Section 133 of the Code of Criminal Procedure, directing and mandating Shriram to stop indulging in the business of producing and processing hazardous and lethal chemicals and gases, such as chlorine, oleum, super chlorine, and phosphate, within two days of the date of the order’s issuance or to appear on December 17th, 1985, in front of the District Magistrate’s Court in Delhi to give a reason why the order should not be put into effect. At this point, MC Mehta filed a PIL with the Supreme Court to get compensation for the damages they had incurred. He also argued that the closed enterprise shouldn’t be permitted to reopen.
The Delhi Legal Aid and Advice Board and the Delhi Bar Association filed applications while the writ petition was still pending to provide compensation to those who had been affected as a result of the oleum gas escape. The Bench of three Judges identified so many significant constitutional issues raised by these applications for compensation and requested that the petitioner, those who supported him, as well as Shriram, submit their respective written arguments so that the Court could begin hearing these applications for compensation.
When these applications for compensation came up for hearing, it was decided that the case should be referred to a larger bench of five judges because the issues raised involved substantial questions of law of the interpretation of Articles 21 and 32 of the Constitution. As a result, the case was heard in the Coram of the Hon’ble bench consisting of Justice P. N. Bhagwati (the then Chief Justice of India), Justice RanganathMisra, Justice G. L. Oza, Justice M. M. Dutt, and Justice K. N. Singh.
Issue Raised in MC Mehta Vs Union of India Case
- Whether this Hon’ble Court has the scope and ambit of jurisdiction to hear the present matter?
- Whether Shriram owned by Delhi Cloth Mills Ltd Public Co, a public company limited by shares, comes within the meaning of State under Article 12?
- Whether Shriram should be allowed to restart its operation of manufacturing caustic chlorine and oleum which is engaged in an industry vital to the public interest is potentially a health hazard and whether it would be a violation of Article 21?
- Whether compensation would be provided to the victims of the oleum gas leak tragedy if so then what would be the measurement of liability of an enterprise that is engaged in the manufacturing of a hazardous or inherently dangerous industry that poses a potential risk to the health of the community at large?
- Whether such large enterprises should be allowed to continue to function in thickly populated areas and if they are permitted so to function, what measures or regulatory mechanisms must be taken to reduce to a minimum the hazard to the workmen and the community living in the neighborhood? If people die or are injured as a result of an accident in this industry. Does the ruling in Rylands v. Fletcher necessarily apply, or is there another principle that can be used to evaluate liability?
Arguments From Either Side
The Hon’ble court follows a system of adversary where the court allows both parties to defend and submit their statements and evidence. After hearing from both sides, the court can able to take a just and right decision. So, let us look into those arguments from either side for the aforementioned issues. Let’s see how the petitioner proves the wrong committed by the defendant and how the defendant is defending themself by his set of evidence and interpretation of laws.
It was argued for the issue of “whether the court has jurisdiction to adjudge upon”, in Bandhua Mukti Morcha v. Union of India, the court held that Article 32 of the constitution of India not only gives this court the authority to issue directives, orders, or writs to enforce fundamental rights but also places a constitutional obligation on the court to protect those rights. To that end, this court has all incidental and ancillary powers, including the ability to create new remedies and implement different methods to uphold fundamental rights. In circumstances where it is appropriate, the court may also have the authority to award compensation. The violation of a fundamental right must be wide and have an impact on the fundamental rights of many individuals. The present applications for compensation are therefore maintainable under Article 32.
The Supreme Court was asked to decide in Rajasthan Electricity Board v. Mohan Lal whether the Rajasthan Electricity Board was an “authority” as defined by the term “other authorities” in Article 12. The judge who delivered the judgment, Justice Bhargava J., emphasized that all statutory and constitutional authorities to whom legal authority has been granted would fall under the definition of “other authorities” in Article 12. And it would be an indication that the authority in question is the “State” if any group of people has the power to issue directions, the disobedience of which would be penalized as a criminal offense.
The petitioner contended that Shriram Industry should be ordered to close permanently because doing so would violate the fundamental right protected by Article 21 and put the lives and health of the community living nearby at risk. Despite not being mentioned in the Constitution directly, the right to a healthy environment and clean environment is implicit in the right to life. The directive principles outlined in the Constitution address how the State should act to raise the bar for living a healthy lifestyle and improving healthcare.
It was asserted that the type of activity carried out by the mentioned industry was hazardous and may be damaging to the general public’s health. To ensure that no harm is done to the community as a result of the risky activity they have engaged in and to hold them accountable for it, it was said that the corporation should have an absolute and non-delegable liability.
The petitioner also contended that since all petitions for compensation cited the right to life as their legal justification, which also ensures the right to health and a healthy environment, compensation should be given to all victims. The Shriram Industry has a legal obligation to take precautions to avoid harming the community or posing any health risks.
It was also argued that the conclusion among all expert committees, constituted by the orders of the court for an investigation into the present case and suggesting recommendations thereon, is that the element of risk to workers and the general public can be reduced by the use of adequate and efficient safety measures, but the risk cannot be entirely removed. The caustic chlorine plant’s relocation is the only long-term solution, according to the common opinion of the Expert Committees, if the risk to the community is to be eliminated.
The counsel for Shriram argued against broadening the scope of Article 12 to include private enterprises. The argument was that because Shrirarn was operating the industry in line with the Government’s specified industrial policy and ultimately intended to operate that industry on its own, Shriram was allowed to do so while operating under the direct supervision and regulation of the Government. The control of the Government was linked to controlling that aspect of the industry’s functioning that could have a significant impact on the public interest because the Government intended to eventually continue this industry.
Furthermore, according to the counsel, the State’s control or regulation of a private corporation’s operations under broad statutes like the Industries (Development and Regulation) Act 1951 only represents the State’s use of its police power to regulate. The activity of the private corporation is not changed by this legislation to become state activity. The State’s police power merely governs how the activity is to be conducted; the activity itself remains the responsibility of the private enterprise.
The counsel further argued that the rule of strict liability, which was laid down in the case of Rylands vs. Fletcher, must be applied in the present case.
Judgment in MC Mehta Vs Union of India Case
The Supreme Court issued a brave ruling saying that it was not a must to adhere to the English law rule from the 19th century and may instead develop a rule appropriate to the social and economic circumstances prevalent in India at the time. It replaced the strict liability rule established in Rylands v. Fletcher with the rule of “Absolute Liability” as part of Indian law. It explicitly stated that none of the exceptions under the Rylands v. Fletcher rule applied to the new rule.
While delivering judgment in MC Mehta vs Union of India, Bhagwati, then Chief Justice of India, stated that:
“All these advances in science and technology had not yet occurred when this rule (Rylands v. Fletcher) was developed in the 19th century. It cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and needs of the present-day economy and social structure. To meet the demands of a society that is changing quickly and to keep up with the nation’s economic progress, the law must change. To effectively address the new issues that emerge in a highly industrialized economy, we must establish new principles and standards. We cannot allow the law as it is practiced in England, or for that matter in any other foreign country, to be the foundation of our judicial reasoning.
We are no longer dependent on a foreign legal system’s provisions. We are undoubtedly ready to accept illumination from whichever direction it comes, but we must first develop our own legal system. We, in India, cannot hold our hands back and I venture to evolve a new principle of liability that English courts have not done. We have to develop our law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation that has arisen and which is likely to arise in the future on account of hazardous or inherently dangerous industries which are concomitant to an industrial economy, there is no reason why we should be cautious about developing such a liability rule, simply because it hasn’t been done in England.
The enterprise must be deemed to have a duty to ensure that the hazardous or inherently dangerous activity in which it engages is conducted with the highest standards of safety. If any harm arises as a result of this activity, the business must be held absolutely liable to pay for that harm, and it should not be considered an acceptable defense for the business to claim that it exercised all reasonable caution and that the harm occurred without any negligence on its part. We would therefore hold that an enterprise is strictly and absolutely liable to compensate all those who are harmed by an accident in the course of performing a hazardous or inherently dangerous activity that results in the escape of toxic gas. This liability is not subject to any of the exceptions that apply to the tortious principle.”
The principles of absolute liability as laid down in MC Mehta vs Union of India are the following:
- Firstly, only those enterprises will be liable which are engaged in a hazardous or inherently dangerous activity (i.e. those not falling under the category of such enterprises will be outside the ambit of the rule where the rule of Rylands v. Fletcher, will be still applicable).
- Secondly, the escape from a dangerous thing from one’s land to another is not necessary (i.e., the rule will not only be applied to those injured persons who are outside the premises but also to those who are inside).
- Thirdly, the rule is without any exception; and
- Fourthly, the quantum of damages depends upon the magnitude and the financial capability of the defendant’s enterprise.
After establishing the principle of absolute liability, the court instructed the petitioning organizations to file lawsuits in the proper court within two months on behalf of the gas leak victims. Further, the management was directed to deposit a sum of Rs. 20 lakhs by way of security for the payment of compensation claims of the victims of the Oleum gas leakage with the registrar of the court. In addition to it, a Bank guarantee for a sum of Rs. 15 lakhs was also directed to be deposited which shall be encashed in case of any escape of gas within three years from the date of the judgment.
Additionally, it was stated that the caustic soda factory’s permanent shutdown would put 4,000 workers out of jobs and worsen the social poverty issue. As a result, the court issued a temporary operating order for the factory with 11 conditions and created an expert committee to supervise industry operations. The government’s primary guidelines were as follows:
1. The Water (Prevention and Control of Pollution) Act of 1974 and the Air (Prevention and Control of Pollution) Act of 1981 both require that certain emission levels be monitored by an inspector appointed by the Central Pollution Control Board.
2. To establish an employee safety committee.
3. The industry should educate the public about chlorine’s effects and appropriate handling.
4. Installing loudspeakers to alert neighbors in case of a gas leak and providing audio-visual services for employee training and instruction on plant safety.
5. Staff should use safety gear including belts and helmets.
6. If a gas escape results in the death or injury of workers or nearby residents, it is requested that the employees of Shriram provide the Chairman of Delhi Cloth Mills Limited with an assurance that they will be “personally accountable” for paying compensation.
The case’s judgment turned out to be vital for future environmental law challenges because it resulted in many significant opinions that are still lauded today. By interpreting the right to life under Article 21 broadly, the Supreme Court took a proactive approach to the case’s resolution and ensured that the people’s fundamental rights were not violated.
The period in which they sat to hear the case prompted the court to allay the worries expressed following the judgment on the Bhopal Gas tragedy, which was delivered only a year ago, to restore the nation’s faith in the legal system. A strong ruling was deemed important and necessary to assure the public that industries will be held completely responsible for their deeds. That’s where the judgment arrived.
The decision has taken into account the relevance of industrialization as well as the possibility that accidents may develop as a result of it. The choice was made while also taking into account the necessity for industrialization, as well as the likelihood and consequences of injuries. The Supreme Court became a champion of the environment and public rights as a result of its generally good judgment, which took into account all relevant social, economic, and legal factors.
This article is written by Pujari Dharani, from the Pendekanti Law College, affiliated to Osmania University, Hyderabad.