Oleum Gas leak case: MC Mehta v. Union of India

AIR 1987 SC 965 – also known as ‘the Oleum Gas Leak Case’. An incident which brought back the horrors of the Bhopal Gas tragedy, a disaster in which a large number of people, including both working people and the public, were affected just after one year of the Bhopal gas tragedy in 1984 and which became a significant example of how the courts must deal with companies responsible for environmental disasters. We are talking about the Oleum gas leak case.

Date: 17/02/1986

Bench

P N Bhagwati, D P Madon, G L Oza

Issues

Whether the industry should be allowed to continue or not?
What regulatory mechanism should be evolved if such industries are allowed to operate in the vicinity of densely populated areas?
What shall be the criteria to determine the liability and amount of compensation?
To see that whether there exist sufficient number of safety exits in the plant and other measures though not necessarily installed in the plant.

Background of the case

While the case of Bhopal gas tragedy awaited verdict of the Hon’ble SC, another gas disaster took place at Shri Ram Foods and fertiliser industries which was a subsidiary of the Delhi Textile Mills. Ltd., on December 4^th and 6^th of 1985, causing death of one advocate and injury to several other people in the incident. A prominent activist lawyer named M C Mehta filed a PIL under Art. 32 of the Indian Constitution seeking closure for the industry since it was engaged in manufacturing hazardous substances and being located in densely populated area.

A complaint was filed under Sec. 133 of CrPC after which the District magistrate ordered for the closure of the unit and to show cause reasons within seven days. Reminding the court of the one year back Bhopal gas tragedy the petitioner pleaded before the court to direct the relocation of the Shri Ram food fertilizers industries outside the area of the city. The court evolved a new rule named’ ‘the Absolute Liability Principle’ following the ‘Strict Liability Principle’ of 1868.

What is Strict Liability Principle?

‘THE STRICT LIABILITY PRINCIPLE’ was evolved in the case of Rylands vs. Fletcher which says that “any person who for the purpose of himself keeps, collects or brings on his land anything that is likely to cause mischief on escaping the land. Such a thing should be kept at his own responsibility and he shall bear the responsibility first hand for all the harm or damage caused due to its non-natural use.” However application of this principle carries certain exceptions like in cases of Act of God, plaintiff’s own negligence, malice on the part of a stranger/third party, statutory authority or plaintiff’s own consent the defence can be taken.

But this principle is different from the absolute liability principle in the sense that the latter has no exceptions, it has a very wide scope. The former is applied when the thing escapes but the ingredient of escaping the premises is not necessary for the latter to be applied i.e. it can cause harm while being within the premises. The effect caused in the case of strict liability principle is limited to neighbours only whereas in the MC Mehta rule or the absolute liability principle the harm cased might extend to larger part of the society. By applying the strict liability principle the damages awarded are ordinary or compensatory whereas the damages awarded in the latter case are exemplary.

Final Verdict

The Hon’ble SC after considering the reports of the inspection committees laid down certain principles, the most relevant of which are listed below:

The management of the industry mentioned had to pay compensation by depositing on the court an amount of 20 lakhs plus the security. The management was required to furnish a bank guarantee of 15 lakh Rupees to be ensued by the SC registrar in the event of any gas leak in the following three years.
The management had to comply with the recommendations given by the committee.
The management was required to give an undertaking in writing to pay compensation to the victims of either the gas leak or any other event in the future.
Such industries should compulsorily have a green belt of approximately 1-5km of width.
The Central govt. was directed by the court to establish an environmental court to decide the cases related to environmental issues.
The National Environmental Tribunal Act, 1995 was passed to deal with the cases related to environmental pollution.

Js. P N Bhagwati gave the opinion about the ‘THE RULE OF STRICT LIABILITY’ that it dated back to 1868 and it does not fit the socio-economic conditions of the present day. Apart from that reminding itself of the Bhopal gas tragedy, the court evolved the principle of ‘absolute liability’.

For the application of the absolute liability principle the following conditions should exist:

There exists an enterprise which is employs an activity that is dangerous or hazardous by nature and poses a threat to the health and safety of the employees engaged in the factory or residing in the vicinity of such a factory.
Such an enterprise has an absolute duty towards the community to ensure health and safety of the people residing in such community and that no harm shall be caused due to its inherently dangerous activity. Such a duty cannot be delegated.
Such activity should be conducted after ensuring highest safety standard.
The enterprise shall not be allowed to take an excuse that it had observed all reasonable care and caution and that it did not observe any negligence due to which the harm has been occurred.