M.C. Mehta & Anr. Etc vs Union Of India & Ors.

Facts

A writ petition was filed by M.C Mehta, a social activist lawyer, he sought
closure for Shriram Industries as it was engaged in manufacturing of
hazardous substances and located in a densely populated area of Kirti
Nagar.

While the petition was pending, on 4 and 6 December 1985, there was
leakage of oleum gas from one of its units which caused the death of an
advocate and affected the health of several others. The incident took place
on December 4, 1985.

Just after one year from the Bhopal gas disaster a large number of persons
– both amongst the workmen and public were affected. This incident also
reminded of the Bhopal gas holocaust.

M.C Mehta filed a PIL under Articles 21 and 32 of the Constitution and
sought closure and relocation of the Shriram Caustic Chlorine and
Sulphuric Acid Plant which was located in a thickly populated area of Delhi.

Factories were closed down immediately as Inspector of Factories and

Commissioner (Factories) issued separate orders dated December 8 and
24, 1985 . This incident took place only a few months before Environment
(Protection) Act came into force, thus became a guiding force for having an
effective law like this
There are six reported orders in the Shriram Food and Fertilizer Industry
case of the Supreme Court of India, out of these six, four orders were
pronounced before Environment (Protection) Act, 1986 was passed and the
date from which it came into force. Thus the reported orders are relevant
and important as they shed new light on how highly toxic and hazardous
substances industry should be dealt with and contained and controlled to
minimize hazards to the workers and general public.

Issues -:

Whether such hazardous industries to be allowed to operate in such areas

If they are allowed to work in such areas, whether any regulating
mechanism be evolved.
Liability and amount of compensation how to be determined.

Decision -:

Chief Justice Bhagwati showed his deep concern for the safety of the
people of the Delhi from the leakage of hazardous substances like the one
here – oleum gas. He was of the opinion that we cannot adopt the policy to
do away with chemical or hazardous industries as they also help to improve
the quality of life, a sin this case this factory, was supplying chlorine to
Delhi Water Supply Undertaking which is used to maintain the
wholesomeness of drinking water. Thus industries even if hazardous have
to be set up since they are essential for economic development and
advancement of well being of the people.

“We can only hope to reduce the element of hazard or risk to the
community by taking all necessary steps for locating such industries in a
matter which would pose least risk of danger to the community and
maximizing safety requirements in such industries ”

Thus the Supreme Court was of the opinion that total ban on the above
industry of public utility will impede the developmental activities.
It was also observed that permanent closure of the factory would result in
the unemployment of 4000 workers, caustic soda factory and add to social
problem of poverty. Therefore the court made an order to open the factory
temporarily subject to eleven conditions and appointed an expert
committee to monitor the working of the industry.

The court also suggested that a national policy will have to be evolved by
the Government for the location of toxic or hazardous industries and a
decision will have to be taken in regard of relocation of such industries with
a view to eliminate risk to the community.

Some of the conditions formulated by the government were -:

The Central Pollution Control Board to appoint an inspector to inspect and

see that pollution standards set under the Water Act and Air Act to be
followed.
To constitute Worker’s Safety Committee
Industry to publicise the effects of chlorine and its appropriate treatment
Instruct and train its workers in plant safety through audio visual
programme, install loudspeaker to alert neighbors in the event of leakage of
gas
Workers to use safety devices like masks and belts
And that the workers of Shriram to furnish undertaking from Chairman of
DCM Limited, that in case of escape of gas resulting in death or injury to
workmen or people living in vicinity they will be “personally responsible ” for
payment of compensation of such death or injury .
The Court also directed that Shriram industries would deposit Rs 20 lakhs
and to furnish a bank guarantee for Rs. 15 lakhs for payment of
compensation claims of the victims of oleum gas if there was any escape of
chlorine gas within three years from the date of order resulting in death or
injury to any workmen or living public in the vicinity . The quantum of
compensation was determinable by the District Judge , Delhi .It also shows
that the court made the industry “absolutely liable ” and compensation to be
paid as when the injury was proved without requiring the industry to be
present in the case .

The above mentioned conditions were formulated to ensure continuous

compliance with the safety standards and procedures laid by the
committees (Manmohan Singh Committee and Nilay Choudhary Committee
) so that the possibility of hazard or risk to workmen could be reduced to nil
.

This all indicates that Supreme Court in its judgement emphasized that
certain standard qualities to be laid down by the government and further it
should also make law on the management and handling of hazardous
substances including the procedure to set up and to run industry with
minimal risk to humans , animals etc.

Further the industries cannot absolve itself of the responsibility by showing

either that that they were not negligent in dealing with the hazardous
substance or they took all the necessary and reasonable precautions while
dealing with it. Thus the court applied the principle of no – fault liability in
this case .

M.C. Mehta And Anr vs Union Of India & Ors

Issues:
In this case three important issues were raised -:

What is the scope of Article 32 of Constitution ?

The rule of last Absolute Liability or Rylands vs Fletcher rule to be followed
.
Issue of compensation to be awarded
Decision-

Scope of Article 32
The court observed that apart from issuing directions , it can under Article
32 forge new remedies and fashion new strategies designed to enforce
fundamental rights . The power under Article 32 is not confined to
preventive measures when fundamental rights are threatened to be
violated but it also extends to remedial measures when the rights are
already violated (vide Bandhua Mukti Morcha v. Union of India ) .The court
however held that it has power to grant remedial relief in appropriate cases
where violation of fundamental rights is gross and patent and affects
persons on a large scale or where affected persons are poor and
backward.

Which rule to be followed Absolute Liability or Rylands v. Fletcher case?

Regarding the measure of liability of an industry engaged in hazardous or
inherently dangerous activity in case of an accident the court examined
whether the rule in Rylands vs Fletcher would be applicable in such cases.

This rule laid down if a person who brings on to his land and collects and
keep there anything likely to do harm and such thing escapes and does
damage to another he is liable to compensate for the damage caused. The
liability is thus strict and it is no defence that the thing escaped without the
person’s wilful act, default or neglect.
The exceptions to this rule are that it does not apply to things naturally on
the land or where the escape is due to an act of god, act of stranger or the
default of the person injured or where there is statutory authority .

The court held that the rule in Rylands v. Fletcher will all of its exceptions is
not applicable for the industries engaged in hazardous activities.

Supreme Court expounded that,

“This rule evolved in the 19th century at a time when all these
developments of science and technology has not taken place. We have to
evolve new principles and lay down new norms which would adequately
deal with the new problems which arise in highly industrialized economy ”

The court introduced new “no fault ” liability standard (absolute liability). An
industry engaged in hazardous activities which poses a potential danger to
health and safety of the persons working and residing near owes an
absolute and non-delegable duty to the community to ensure that no harm
results to anyone. Such industry must conduct its activities with highest
standards of safety and if any harm results, the industry must be absolutely
liable to compensate for such harm. It should be no answer to industry to
say that it has taken all reasonable care and that harm occurred without
negligence on its part. Since the persons harm would not be in position to
isolate the process of operation from the hazardous preparation of the
substance that caused the harm, the industry must be held absolutely liable
for causing such harm as a part of the social cost of carrying on the
hazardous activities. This principle is also sustainable on the ground that
the industry alone has the resource to discover and guard against hazards
or dangers and to provide warning against potential hazards.

Issue of Compensation-
It was held that the measure of compensation must be correlated to the
magnitude and capacity of the industry so that the compensation will have
a deterrent effect. The larger and more prosperous by the industry, the
greater will be the amount of compensation payable by it.

The court did not order payment of compensation to victims since it left
open the question due to lack of time to adjudicate whether Shriram, a
private corporation was a state or authority which could be subjected to the
discipline of Article 21.