M. C. MEHTA V. UNION OF INDIA
M.C. Mehta v. Union of India 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. One person died in the incident and few
were hospitalized. The case lays down the principle of absolute liability and the concept of deep pockets.
Facts
The
case came up before the five-judge bench of the Supreme Court after a
three-judge bench had referred it to a higher bench 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
Bench of three Judges permitted Shriram Foods and Fertiliser Industries
(hereinafter referred to as Shriram) to restart its power plant as also plants
for manufacture of caustic chlorine including its by-products and recovery
plants like soap, glycerine and technical hard oil, subject to the conditions
set out in the Judgment.
The
main issue in the original writ petition which was filed in order to obtain a
direction for closure of the various units of Shriram on the ground that they
were hazardous to the community.
But
while the writ petition was pending there was escape of oleum gas from one of
the units of Shriram on 4 and 6 December 1985 and applications were filed by
the Delhi Legal Aid & 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.
The
Court thought that these applications for compensation raised certain important
issues and those issues should be addressed by a constitutional bench.
Preliminary objection of the defendants
There
was only one preliminary objection filed by the counsel for the defendant, and
this was that the Court should not proceed to decide these constitutional
issues since there was no claim for compensation originally made in the writ
petition and these issues could not be said to arise on the writ petition.
However, the Court, while rejecting this objection, said that though it is
undoubtedly true that the petitioner could have applied for amendment of the
writ petition so as to include a claim for compensation but merely because he
did not do so, the applications for compensation cannot be thrown out. These
applications for compensation are for enforcement of the fundamental right to
life enshrined in Article 21 of the Constitution and while dealing with such
applications we cannot adopt a hyper-technical approach which would defeat the
ends of justice.
Judgment
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.
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.
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 enterprise of the
private sector.
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 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.
Issue of strict and absolute liability
On
the question of developing a new doctrine to attach liability the court
commented that;
We
must also deal with one other question which was seriously debated before us
and that question is as to what is the measure of liability of an enterprise
which is engaged in a hazardous or inherently dangerous industry, if by reason
of an accident occurring in such industry, persons die or are injured. Does the
rule in Rylands v. Fletcher apply 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 and it provides that a
person who for his own purposes being 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
defence that the thing escaped without that person's wilful 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.]
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. We need not feel
inhibited by this rule which was evolved in this context of a totally different
kind of economy. 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.
We
cannot allow our judicial thinking to be constricted by reference to the law as
it prevails in England or for the matter of that in any other foreign country.
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.
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-à-vis
the tortious principle of strict liability under the rule in Rylands v. Fletcher.
We would also like to point out that the measure of compensation in the kind of
cases referred to in the preceding paragraph must be co-related to the
magnitude and capacity of the enterprise because such compensation must have a
deterrent effect. The larger and more prosperous the enterprise, the greater
must be the amount of 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.
Order of the court
The
Supreme Court made the following observation:
Since
we are not deciding the question as to whether Shriram is an authority within
the meaning of Article 12 so as to be subjected to the discipline of the
fundamental right under Article 21, we do not think it would be justified in
setting up a special machinery for investigation of the claims for compensation
made by those who allege that they have been the victims of oleum gas escape.
But we would direct that Delhi Legal Aid and Advice Board to take up the cases
of all those who claim to have suffered on account of oleum gas and to file
actions on their behalf in the appropriate court for claiming compensation
against Shriram. Such actions claiming compensation may be filed by the Delhi Legal
Aid and Advice Board within two months from today and the Delhi Administration
is directed to provide the necessary funds to the Delhi Legal Aid and Advice
Board for the purpose of filing and prosecuting such actions.
Thus
the High Court was directed to nominate one or more Judges as may be necessary
for the purpose of trying such actions so that they may be expeditiously
disposed of.
SOURCES
https://en.wikipedia.org/wiki/M._C._Mehta_v._Union_of_India
http://www.legalserviceindia.com/article/l265-M.C.-Mehta-v.-Union-of-India.html
http://lawmantra.co.in/m-c-mehta-vs-union-of-india/
http://www.advocatekhoj.com/library/judgments/announcement.php?WID=6873
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