“MC Mehta vs Union of India, 1986: Landmark Case In Deciding Liabilities Of Industries.”
- Introduction-
MC Mehta vs UOI, commonly referred to as the Oleum Gas Leak Case, is a significant legal battle that unfolded in the Indian judicial system. The case stems from a catastrophic incident that occurred in 1985, when a storage tank containing oleum gas leaked in a densely populated area of Delhi, resulting in immense harm to human life and the environment.
The petitioner, MC Mehta, a renowned environmental activist, filed a public interest litigation (PIL) seeking justice and compensation for the victims, as well as stringent measures to prevent similar incidents in the future. The case brought to light the urgent need for environmental protection and the responsibility of industries towards the communities they operate in.
The litigation highlighted the negligence of the Union of India (UOI) in enforcing safety regulations and monitoring the activities of the industries involved. It also shed light on the lack of preparedness and inadequate emergency response measures in place at the time of the incident.
The case gained immense public attention and became a turning point in India’s environmental jurisprudence. The Supreme Court of India, presided over by a bench led by Justice Kuldip Singh, took up the matter and delivered several landmark judgments.
- Background-
The writ petition numbered 12739 was filed by MC Mehta, an environmental activist, seeking direction for the closure of various units of Shriram, which was found to be hazardous to the community, located in a densely populated area in Delhi. While the petition was still pending, a grave incident occurred involving the escape of oleum gas from one of the Shriram units, leading to the death of a Tis Hazari Court advocate, and applications were filed for compensation to the Delhi Legal Aid & Advice Board and the Delhi Bar Association.
Following the incident, the three-judge bench permitted Shriram Foods and Fertilizers Industries to restart their power plant as well as plants for the manufacture of caustic chlorine, soap, glycerine, and technical hard oil, subject to certain conditions. However, the petitioner approached the Court again for violations of fundamental rights and compensation, leading to the appointment of two expert committees to assess whether the recommendations made by the Manmohan Singh Committee had been implemented to ensure safety measures and control pollution. The Seturam Committee was also established by the Lieutenant Governor of Delhi to provide its recommendations and conduct on-site inspections.
The applications filed after the gas leak raised constitutional issues, leading the three-judge bench to formulate the issues and ask the petitioner and Shriram to file their respective written submissions. The issues involved critical questions of law related to the interpretation of Article 21 and Article 32 of the Constitution. The case was then transferred to a larger bench of five judges.
Article 21: Protection of Life and Personal Liberty: No person shall be deprived of his life or personal liberty except according to procedure established by law.
ARTICLE 32: The article guarantees the right of an individual to move the Supreme Court by appropriate proceedings for the enforcement of fundamental rights.
- Issued Raised –
- Whether the rule in Rylands vs Fletcher apply in this case, or is there any other principle that can be used to determine liability?
- What is the extent of an enterprise’s liability if people are killed or hurt because of an accident occurring in a hazardous industry?
- What is the scope of the jurisdiction of the Supreme Court under Article 32 since the applications for compensation are sought to be maintained under that Article?
- Whether Art. 21 can be invoked against a publicly traded company operating in a crucial industry that has the potential to impact well-being and health of the public?
- Arguments –
In the Rylands v. Fletcher case, the principle of strict liability was applied, meaning that the defendant can still be held liable, even if they did not intentionally cause harm. However, this principle does not include natural land use. In order to overcome the limitations of strict liability, the Supreme Court developed a new rule of absolute liability which is more effective and appropriate for hazardous industries in India.
The principle of absolute liability requires that if a hazardous industry causes harm, they cannot escape their liability to compensate the victims. This means that if an industry is allowed to carry out these hazardous activities, they must take responsibility for any negative consequences that result.
The Bandhua Mukti Morcha v. Union of India case established that Article 32 of the Constitution not only gives the Court the power to issue writs, directives, and orders to enforce fundamental rights, but also imposes a constitutional obligation on it to protect those rights. The Court has the necessary powers to devise new remedies and use various methods to uphold fundamental rights. In certain circumstances, it also has the authority to grant compensation, provided that the violation of a fundamental right significantly impacts the rights of a large number of people.
In this case, the applicant argued for the permanent closure of Shriram Industry since its operation would infringe on the right protected by Article 21 and pose a danger to the neighbouring community. Even though there is no explicit reference to a safe and healthy environment in the Constitution, this right is implicitly included within the right to life. The Constitution emphasizes the State’s responsibility to enhance healthcare and promote a higher standard of living for its citizens.
After thorough investigations commissioned by court orders, expert committees determined that although efficient safety measures could mitigate potential hazards to the public and workers, it would be impossible to eliminate these risks entirely. Therefore, the permanent relocation of the caustic chlorine plant emerged as the only possible solution to remove the danger posed to the community.
The respondent objected to the consideration of compensation claims in the original writ petition because it did not include such a claim. The respondent argued that the petitioner could have requested an amendment to the petition to include a compensation claim, but did not do so. As a result, the current form of the writ petition did not cover these constitutional issues.
Shriram Industry was operating under government oversight and regulations that required them to operate with particular standards prescribed by the government. The government’s supervision did not change the nature of the private corporation’s activities. Rather, it allowed the state to regulate their operations. Therefore, the responsibility for conducting the activities remained with the private enterprise.
The council also further proposed the application of Rylands v. Fletcher’s strict liability principle in this case.
- Judgement –
Court held that, ‘It has the authority, as stated in Article 32(1) and Article 32(2), to establish appropriate procedures and issue necessary directions, orders, or writs to enforce fundamental rights and provide remedial assistance to individuals whose fundamental rights have been violated. Remedial relief authorized by the Court may extend to compensation in appropriate instances. Likewise, companies involved in risky or inherently hazardous industries have an unconditional and non-transferable responsibility to ensure that their operations never endanger the well-being of their employees and the nearby residing community. It is their obligation to maintain the utmost level of safety standards. The company cannot avoid responsibility for any harm resulting from such hazardous activities by asserting that it exercised reasonable care and no negligence on its part.’
The Supreme Court also claims that, “We have come to a point where we no longer needed to rely on the legal framework of another nation. Although we are open to drawing insights from any source, it is critical that we establish our own legal system. In India, it is vital to take the necessary steps to formulate a new principle of liability, one that has not yet been explored by Foreign courts. It is our responsibility to shape our own laws, and if we confront unique scenarios as a result of hazardous or inherently dangerous industries that are crucial to an industrialized economy, we should not hesitate to create a new rule of liability. The fact that no such liability rule exists in England should not discourage us from embracing such a rule.”
The court has given a deadline of two months to the organizations that filed the case to go ahead with their lawsuits on behalf of the gas leak victims. On top of that, the management has been told to gave up Rs. 20 lakhs as a security measure to compensate the victims affected by the leakage. The court also said that a Bank guarantee of Rs. 15 lakhs must be provided and will be cashed if there is any gas leakage within three years from the day the court gave its verdict.
The Supreme Court implemented a principle known as the “deep pocket theory.” This concept, as explained by the judges, refers that the amount of damages a company must pay would be proportionate to its size and financial strength, with the intention of serving as a deterrent. Put simply, when a large and economically successful company engages in activities that pose risks or dangers, and such activities have a negative effect on the public and cause a nuisance, it is required to compensate those harmed. However, the company may also be obligated to pay a higher amount of compensation due to its ability to meet such monetary obligations. This principle of compensation is known as the “deep pockets” doctrine and is applied when a company’s capacity to pay is in excess of what is typically required for an industry of that nature. This is because the company’s significant financial resources provide a higher level of protection to the public from any hazards or dangers caused by its actions. Therefore, the “deep pockets” doctrine is employed to ensure that the company’s financial capability is taken into account during the compensation process and the affected individuals receive adequate reparation for their losses.
‘Absolute Liability’ in legal terms pertains only to enterprises or companies engaged in hazardous or inherently dangerous activities, where they are held responsible for any damage caused in connection with such activities. This principle applies irrespective of whether a dangerous substance or object has escaped from their property and, encompasses not just individuals hurt outside the premises but also the ones affected within the boundaries of the enterprise. The rule holds absolute and has no exceptions or conditions to apply. In cases where this rule comes into play, compensation is determined after assessing the nature of the damage inflicted and the financial capability of the enterprise involved. The principle of Absolute Liability aims to safeguard the affected individuals by ensuring that companies engaging in dangerous activities are held accountable for any harm caused by them, irrespective of the circumstances.
- Conclusion –
The Supreme Court’s decision in a landmark environmental case proved to be a turning point in the Indian legal system’s approach towards environmental issues. The Court’s interpretation of the right to life as articulated in Article 21 broadly and proactively ensured the protection of fundamental rights and public confidence in the legal framework. The court recognized the importance of industrialization in the country’s socio-economic growth, but it also addressed the dangers and consequences of industrial accidents realistically. The ruling paved the way for a more proactive and holistic interpretation of people’s rights in environmental cases, making it an essential legal milestone that influences the approach to environmental cases and lays the groundwork for robust protection of individuals’ basic rights. The verdict, delivered a year after the Bhopal Gas Tragedy verdict, reassured the public that industries would be held accountable for their actions and is still praised today for its commendable judgment that accounted for social, economic, and legal aspects.
By Kartik Kanodia, Student at DBRANLU.
