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M.C. Mehta v. Union of India - Article 12 of the constitution

Written by: Surajit Bhaduri - Student of III Year Gujarat National Law University
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  • 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 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.

    How Did The Case Come Up Before This Hon'ble Bench
    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 Hon'ble bench consisting of P. N. BHAGWATI, C.J.I., RANGANATH MISRA, G. L. OZA, M. M. DUTT AND K. N. SINGH, JJ.

    The Issues That Came Before The Hon'ble Court
    Issue I

    Whether this Hon'ble Court has jurisdiction to hear the present matter?

    The first question that came up before the Hon'ble Supreme Court as to what is the scope and ambit of the jurisdiction of this Court under Art. 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 that Article. The court said that in Bandhua Mukti Morcha v. Union of India , Bhagwati, J. held that the scope and ambit of Article 32 of the Constitution of India 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 make and adopt new remedies and fashion new strategies designed to enforce the fundamental rights. The court can innovated new methods and strategies for the purpose of securing enforcement of the fundamental rights, particularly in the case of the poor and the disadvantaged who are denied their basic human rights and to whom freedom and liberty have no meaning.

    Again in S. P. Gupta v. Union of India, the Supreme Court held that where a legal wrong or a legal injury is caused to a person or to a determinate class of persons by reason of violation of any constitutional or legal right or any burden is imposed in contravention of any constitutional or legal provision or without authority of law or any such legal wrong or legal injury or illegal burden is threatened, and any such person or determinate class of persons is by reason of poverty or disability or socially or economically disadvantaged position unable to approach the Court for relief, any member of the public or social action group can maintain an application for an appropriate direction, order or writ in the High Court under Art. 226 and in case of breach of any fundamental right of such person or class of persons, in Supreme Court under Art. 32 seeking judicial redress for the wrong or injury caused to such person or determinate class of persons.

    To increase the ambid of PIL filing the Hon'ble bench also upheld and stated that in Bandhua Mukti Morcha's case, and held that it would not be right to reject a letter addressed to an individual justice of the Court merely on the ground that it is not addressed to the Court or to the Chief Justice and his companion Judges. The Court pointed out that letters would ordinarily be addressed by poor and disadvantaged persons or by social action groups who may not know the proper form of address. And therefore held that letters addressed to individual justice of the Court should not be rejected merely because they fail to conform to the preferred form of address. Neither should the Court adopt a rigid stance that no letters will be entertained unless they are supported by an affidavit.
    The Supreme Court under Art. 32(1) is free to devise any procedure appropriate for the particular purpose of the proceeding, namely, enforcement of a fundamental right and under Art. 32(1) can direct order or writ is necessary in a given case, including all incidental or ancillary power necessary to secure enforcement of the fundamental right. 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 in scope and provides relief against a breach of the fundamental right. If the Court is powerless to issue any direction, order or writ in cases where a fundamental right has already been violated, Art. 32 would be robbed of all its efficacy. The Court also pointed out that Art. 32 is not powerless to assist a person when he finds that his fundamental right has been violated. He can in that event seek remedial assistance under Art. 32.

    The power of the court to grant such remedial relief may include the power to award compensation in appropriate cases where infringement of the fundamental right is gross and patent, that is, incontrovertible and ex facie glaring and either such infringement should be on a large scale affecting the fundamental rights of a large number of persons or it should appear unjust or unduly harsh or oppressive on account of their poverty or disability or socially or economically disadvantaged position to require the persons or persons affected by such infringement to initiate and pursue action in the civil Courts. It is only in exceptional cases of the nature indicated by us above, that compensation may be awarded in a petition under Art. 32. It was pointed out that the Court awarded compensation in Rudul Shah v. State of Bihar. And thus the Hon'ble court held that the court has jurisdiction to hear this case and secondly if the court finds fit then it would award compensation to the victims who have alleged that there Fundamental Rights have been infringed.

    Issue II

    Whether Article 21 was available against Shriram and whether Shriram owned by Delhi Cloth Mills Ltd Public Co, comes within the meaning of State under Article 12?

    The next question that arose for consideration was 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 Art. 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. It was emphatically contended by counsel for the applicants, that the American doctrine of State Action and the functional and control test enunciated by the Supreme Court in its earlier decisions, that Art. 21 is available. The contention was that as Shrirarn was carrying on an industry which was in accordance to the Government's own declared industrial policies, was ultimately intended to be carried out by itself, but instead of the Government immediately embarking on that industry, Shriram was permitted to carry it on under the active control and regulation of the Government. Since the Government intended to ultimately carry on this industry and the mode of carrying on the industry could vitally affect public interest, the control of the Government was linked to regulating that aspect of the functioning of the industry which could vitally affect public interest.

    The applicants also contended on the regulatory mechanism provided under the Industries (Development and Regulation) Act, 1951 where industries are included in the schedule if they vitally affect public interest. It was pointed out that sizable aid in loans, land and other facilities granted by the Government to Shriram in carrying on the industry. And according to the American State Action doctrine, if supported, controlled or regulated by the State may get so entwined with governmental activity as to be termed State action and it would then be subject to the same constitutional restraints on the exercise of power as the State.
    On the other hand, counsel for Shriram contended against expanding Art. 12 so as to bring within its ambit private corporations. He contended that control or regulation of a private corporation's functions by the State under general statutory law such as the Industries (Development and Regulation) Act 1951 is only in exercise of police power of regulation by the State. Such regulation does not convert the activity of the private corporation into that of the State. The activity remains that of the private corporation, the State in its police power only regulates the manner in which it is to be carried on. It was emphasized that the control which deems corporation, an agency of the State, must be of the type where the State controls the management policies of the Corporation whether by sizable representation on the board of management or by necessity of prior approval of the Government before any new policy of management is adopted, or by any other mechanism. It was also pointed out that the State action doctrine to the Indian situation means control and function test have been evolved in order to determine whether a particular authority is an instrumentality or agency of the State and hence 'other authority' within the meaning of Article 12. The learned counsel also pointed out that those rights which are specifically intended by the Constitution makers to be available against private parties are so provided in the under Art 17, Art 23 and Art 24. Therefore, to so expand Art 12 as to bring within its ambit even private corporations would be against the fundamental rights.
    In order to deal with the contention weather the applicants fall under the ambid of Art 12, the Supreme Court referred to the existing case laws.

    In Rajasthan Electricity Board v. Mohan Lal, the Supreme Court was called upon to consider whether the Rajasthan Electricity Board was an 'authority' within the meaning of the expression 'other authorities' in Art. 12. Bhargava. J. who delivered the judgment pointed out that the expression 'other authorities' in Art. 12 would include all constitutional and statutory authorities on whom powers are conferred by law. And if any body of persons has authority to issue directions, the disobedience of which would be punishable as a criminal offence, that would be an indication that the concerned authority is 'State'.

    The ratio of this decision may thus be stated to be that a constitutional or statutory authority would be within the expression "other authorities" if it has been invested with statutory power to issue binding directions to third parties, the disobedience of which would entail penal consequences or it has the sovereign power to make rules and regulations having the force of law.

    This test was followed by Ray. C. J., in Sukhdev v. Bhagat Ram, where Mathew. J. propounded a broader test, where he emphasized on the concept of 'State'. He expanded on this dictum by stating that the emerging principle appears to be that a public corporation being an instrumentality or agency of the 'State' is subject to the same constitutional limitations as the 'State' itself, namely, that the corporation is the creation of the 'State' and that there is existence of power in the corporation to invade the constitutional rights of the individual.

    This Court in Ramanna D. Shetty v. International Airport Authority , accepted and adopted the rationale of instrumentality or agency of State put forward by Mathew, J., and spelt out certain criteria with whose aid such an inference could be made.

    In Ramanna D. Shetty v. International Airport Authority the Court held that there is no cut and dried formula which would provide the correct division of corporations into those which are instrumentalities or agencies of Government and those which are not. The Court made an analogy on the concept of State Action as developed in the United States wherein private agency if supported by extra-ordinary assistance given by the State may be subject to the same constitutional limitations as the State. The Court also held that if extensive and unusual financial assistance is given and the purpose of such assistance coincides with the purpose for which the corporation is expected to use the assistance and such purpose is of public character, it may be a relevant circumstance supporting an inference that the corporation is an instrumentality or agency of the Government.

    On the functional criteria namely, that if the corporation is carrying out a governmental function, the Court should emphasize that classification of a function as governmental should not be done on earlier day perceptions but on what the State today views. The Court also reiterated in R. D. Shetty's case , what was pointed out by Mathew, J. in Sukhdev v. Bhagatram , that institutions engaged in matters of high public interest by virtue of the nature of the functions performed government agencies.

    The Court in R. D. Shetty's case enumerating the following five factors which would determine weather a body comes under the definition of State as defined in Art 12 of the Constitution, namely, (1) financial assistance given by the State and magnitude of such assistance (2) any other form of assistance whether of the usual kind or extraordinary (3) control of management and policies of the corporation by the State - nature and extent of control (4) State conferred or State protected monopoly status and (5) functions carried out by the corporation, whether public functions closely related to governmental functions, would determine whether a corporation is an instrumentality or agency of the State or not.

    The criteria that evolved in Ramana Shetty's case , was applied in Ajay Hasia v. Khalid Mujib, where it was further emphasized that: where constitutional fundamentals vital to the maintenance of human rights are at stake, the Government may act through the instrumentality or agency or it may employ the instrumentality or agency of judicial persons to carry out its function. It is really the Government which acts through the instrumentality or agency of the corporation and for the purpose of convenience of management and administration. If the Government acting through its officers is subject to certain constitutional limitations it must follow a fortiori that the Government acting through the instrumentality or agency of a corporation should be equally subject to the same limitations.

    It was held that Courts should be anxious to enlarge the scope and width of the fundamental rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, whether through natural persons or through corporate entities to the basic obligation of the fundamental rights.

    According to the guidelines laid down by the Supreme Court in Som Prakash v. Union of India, the Hon'ble Court started to examine whether a private corporation such as Shriram comes within the ambit of Art. 12 or not.

    The Hon'ble Supreme Court held that under the Industrial Policy Resolution, 1956 industries were classified into three categories which are regarded to be a part which the State. 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 be expected to supplement the effort of the State by promoting and developing 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 enterprise of the private sector.
    The policy resolution also mentions certain basic industries of importance that can be regulated by the Central Government for national interest. Among the eighteen industries so mentioned as requiring such Central control, heavy chemicals and fertilizers industries were included.

    According to the objectives of the Policy Resolutions the Industries (Development and Regulation) Act of 1951 Section 2 of the Act declares that in the public interest the Union should take under its control the industries specified in the First Schedule. Chemicals and Fertilizers industries are placed in the First Schedule as Items 19 and 18 respectively.

    The Supreme Court held that the activity of producing chemicals and fertilizers 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, though there was State support and the industry was under State control, then private corporations may also be permitted to supplement the State.

    It was pointed out on behalf of the applicants that as Shriram is registered under the Industries (Development and Regulation) Act, 1951, its activities are subject to extensive and detailed control and supervision by the Government. Under the Act a license is necessary for the establishment of a new industrial undertaking or expansion of capacity or manufacture of a new article by an existing industrial undertaking carrying on any of the Scheduled Industries included in the First Schedule of the Act.

    The Supreme Court held that Shriram is required to obtain a license under the Factories Act and is subject to the directions and orders of the authorities under the Act. It is also required to obtain a license for its manufacturing activities from the Municipal authorities under the Delhi Municipal Act, 1957. It is subject to extensive environment regulation under the Water (Prevention and Control of Pollution) Act, 1974 and as the factory is situated in an air pollution control area, it is also subject to the regulation of the Air (Prevention and Control of Pollution) Act, 1981. It is true that control is not exercised by the Government in relation to the internal management policies of the Company. This functional control is of special significance as it is the potentiality of the fertilizer industry to adversely affect the health and safety of the community and its being impregnated with public interest which perhaps dictated the policy decision of the Government to ultimately operate this industry exclusively and invited functional control. Along with this extensive functional control, Shriram also receives sizable assistance in the shape of loans and overdrafts running into several cores of rupees from the Government through various agencies. Moreover, Shriram is engaged in the manufacture of caustic soda, chlorine etc. Its various units are set up in a single complex surrounded by thickly populated colonies. Chlorine gas is admittedly dangerous to life and health. If the gas escapes either from the storage tank or from the filled cylinders or from any other point in the course of production, the health and well-being of the people living in the vicinity can be seriously affected. Thus Shriram is engaged in an activity which has the potential to invade the right to life of large sections of people. The question whether these factors are cumulatively sufficient to bring Shriram within the ambit of Art. 12.

    In Ramanna Shetty v. International Airport Authority and Kasturilal Reddy v. State of Jammu and Kashmir, a private corporation under the functional control of the State engaged in an activity which is hazardous to the health and safety of the community and against the public interest During the course of arguments the learned counsel elaborately traced the evolution of this doctrine in its parent country that in America since the Fourteenth Amendment is available only against the State, the Courts, ordered to thwart racial discrimination by private parties, devised the theory of State action under which it was held that wherever private activity was aided, facilitated or supported by the State in a significant measure, such activity took the colour of State action and was subject to the constitutional limitations of the Fourteenth Amendment. But the principle behind the doctrine of State aid, control and regulation so impregnating a private activity as to give it the colour of State action that is of interest to us and that also to the limited extent to which it can be Indianized and harmoniously blended with our constitutional jurisprudence. The court in no way consider themself bound by American exposition of constitutional law but some of the principles adumbrated by the American decisions may provide a useful guide, close adherence to those principles while applying them to the provisions of our Constitution is not to be favoured, because the social conditions in our country are different. The learned counsel for Shriram stressed that the doctrine of State action in the Indian context because, accordingly, once an authority is brought within the purview of Art. 12, it is State for all intents and purposes and the functional dichotomy in America where certain activities of the same authority may be characterized as State action and others as private action cannot be applied here in India. But so far as this argument is concerned, the court demur to it and point out that it is not correct to say that in India once a corporation is deemed to be 'authority', it would be subject to the constitutional limitation of fundamental rights in the performance of all its functions and that the appellation of 'authority' would stick to such corporation.

    Before parting with this topic, the Hon'ble Court pointed out that this court has throughout the last few years expanded the horizon of Art.12 primarily in respect to human rights and social conscience in our corporate structure. The purpose of expansion has not been to destroy the human rights jurisprudence. Prima facie the Court is not inclined to accept the apprehensions of learned counsel for Shriram as well founded when he said that including Shriram within the ambit of Art 12. and thus subjecting to the discipline of Article 21, those private corporations whose activities have the potential of affecting the life and health of the people would deal a death blow to the policy of encouraging and permitting private entrepreneurial activity. Whenever a new advance is made in the field of human rights, apprehension is always expressed that it will create enormous difficulties in the smooth functioning of the system.

    Similar apprehension was voiced in Ramanna Shetty's case , whether public sector corporations came within the scope and ambit of Art. 12 and subjected them to the discipline of fundamental rights. Such apprehension expressed by those who may be affected by any new and innovative expansion of human rights need not deter the Court from widening the scope of human rights and expanding their reach ambit, if otherwise it is possible to do so without doing violence to the language of the constitutional provision. It is through creative interpretation and bold innovation that the human rights jurisprudence has been developed India to a remarkable extent and this movement cannot be allowed to be halted by unfounded apprehensions expressed by status quoists.

    Finally the Hon'ble Court said that they do not propose to decide whether a private corporation like Shriram would fall within the scope and ambit of Article 12, because of insufficient time to consider and reflect on this question in depth. The hearing of this case before us concluded only on 15th December 1986 and we are called upon to deliver our judgment within a period of four days, on 19th December 1986. The Court felt that this is not a question on which we must make any definite pronouncement at this stage as it needs detailed consideration.

    Issue III

    Whether compensation would be provided to the victims of the oleum gas leake tragedy if so then what would be the measurement of liability of such an enterprise engaged in caring hazardous industries?

    Finally the question which was seriously debated before the Hon'ble Court was the question as to what is the measure of liability of an enterprise which is engaged in an 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 or is there any other principle on which the liability can be determined. The rule in Rylands v. Fletcher was evolved in the year 1866 provides that a person who for his own purpose brings on to his land and collects and keeps there anything likely to do mischief if it escapes must keep it at his peril and, if he fails to do so, is prima facie liable for the damage which is the natural consequence of its escape.
    The liability under this rule is strict and it is no defense that the thing escaped without that person's willful act, default or neglect or even that he had no knowledge of its existence. This rule laid down a principle of liability that if a person who brings on to his land and collects and keeps there anything likely to do harm and such thing escapes and does damage to another, he is liable to compensate for the damage caused. Of course, this rule applies only to non-natural user of the land and it does not apply to things naturally on the land or where the escape is due to an act of God and an act of a stranger or the default of the person injured or where the thing which escapes is present by the consent of the person injured or in certain cases where there is statutory authority. Considerable case law has developed in England as to what is natural and what is non-natural use of land and what are precisely the circumstances in which this rule may be displaced. The Court felt that it was not necessary for them to consider these decisions laying down the parameters of this rule because in a modern industrial society with highly developed scientific knowledge and technology where hazardous or inherently dangerous industries are necessary to carry a part of the developmental programme.

    This rule evolved in the 19th Century at a time when all these developments of science and technology had not taken place cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure. Law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country. As new situations arise the law has to be evolved in order to meet the challenge of such new situations. Law cannot afford to remain static. So the Court felt of evolving new principles and lay down new norms which would adequately deal with the new problems which arise in a highly industrialized economy. Judicial thinkers should not be constricted by reference to the law as it prevails in England or for the matter of that in any other foreign country. The court thus felt that they are certainly prepared to receive light from whatever source it comes but they have to build up there own jurisprudence and cannot countenance an argument that merely because the new law does not recognize the rule of strict and absolute liability in cases of hazardous or dangerous liability or the rule as laid down in Rylands v. Fletcher as is developed in England recognizes certain limitations and responsibilities.

    Bhagwati. J. thereafter stated that, We in hold our hands back and I venture to evolve a new principle of liability which English Courts have not done. We have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concomitant to an industrial economy, there is no reason why we should hesitate to evolve such principle of liability merely because it has not been so done in England. We are of the view that an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential 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 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 harm and it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part. Since the persons harmed on account of the hazardous or inherently dangerous activity carried on by the enterprise would not be in a position to isolate the process of operation from the hazardous preparation of substance or any other related element that caused the harm the enterprise must be held strictly liable for causing such harm as a part of the social cost for carrying on the hazardous or inherently dangerous activity.

    If the enterprise is permitted to carry on an hazardous or inherently dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activity as an appropriate item of its overheads. Such hazardous or inherently dangerous activity for private profit can be tolerated only on condition that the enterprise engaged in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of the carrying on of such hazardous or inherently dangerous activity regardless of whether it is carried on carefully or not. This principle is also sustainable on the ground that the enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards. We would therefore hold that 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 vis-a-vis the tortious principle of strict liability under the rule in Rylands v. Fletcher.

    The Court also pointed out that the measure of compensation in the kind of cases referred to 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, 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.

    The 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 Hon'ble 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 Hon'ble 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.

    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 Hon'ble 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 Hon'ble 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 Hon'ble 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 Hon'ble Court will definitely provide the victims with appropriate compensation, as the Hon'ble Court deems fit keeping in mind the principles of Natural Justice.

    Books Referred
    1. Environmental Law In India, Second Edition, by P.Leelakrishnal, Lexis Nexis Butterworths,2005.
    2. Environmental Law And Policy In India, Second Edition, by Shyam Divan and Armin Rosencranz, Oxford University Press, 2005.
    3. Environmental Law, Second Edition, by S.C.Shastri, Eastern Book Company, 2005.
    4. Indian Constitutional Law, Fifth Edition, by Prof M.P.Jain, Wadhwa Nagpur, 2007

    The author can be reached at: [email protected]
    Added Date: 6 Nov 2008

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