An analysis of Oleum Gas Leak Case

Case Name: M.C. Mehta v. Union of India 1987 A.I.R. 1086 (Oleum gas leak case)

Jurisdiction: Supreme Court of India

Decided on: February 17, 1986

The bench of judges: CJI P. N. Bhagwati, G. L. Oza, D. P. Madon JJ

What is the case about?

In the case of M.C. Mehta v. Union of India 1987 A.I.R. 1086, popularly known as the oleum gas leak case, the Supreme Court made a landmark judgment to determine the liability of an enterprise whose operations led to the leakage of oleum gas, thereby causing damage to the community. This case also introduced the concept of absolute liability and did away with the application of the rule of strict liability as laid down under English law.

Facts of the case

On December 4th and 6th, 1985, a major leakage of oleum gas occurred from one of the plants of Shriram Foods and Fertiliser Industries, a subsidiary of Delhi Cloth Mills, located in Delhi, resulting in the death of one person and causing injuries to several people. This leakage was caused by the explosion of the oleum gas tank as a result of the collapse of the structure on which it was mounted. Just at the time when the case was brought before the Court, another leakage occurred as a result of oleum gas escaping from the joints of a pipe.

All units were set up in a single complex that was about 76 acres in size. It was surrounded by densely populated colonies, and there were about 200,000 people living within a 3-kilometer radius of the complex.

In accordance with Section 133(1) of the Criminal Procedure Code, the District Magistrate of Delhi issued a directive to Shriram Industries on December 6th, 1985, ordering it to stop the manufacturing and processing of hazardous and lethal chemicals and gases at its establishment in Delhi within two days and to remove such chemicals and gases from Delhi within seven days.

At this point, M.C. Mehta, a social activist lawyer, filed a PIL with the Supreme Court to get compensation for the damages caused. He also argued that the closed establishment shouldn’t be permitted to reopen.

In addition, the Delhi Legal Aid & Advice Board and the Delhi Bar Association filed applications for the award of compensation to those who were harmed as a result of the escape of oleum gas.

Governing principles

The court ruled that the writ petition filed as part of Public Interest Litigation raises some fundamental issues regarding:

  • the true intent and scope of Articles 21 and 32 of the Constitution
  • the standards and guidelines for determining the liability of large enterprises that manufacture and sell hazardous products
  • the basis on which damages in the event of such liability should be estimated, and
  • whether such large enterprises should be allowed to continue operating in densely populated areas, and if so, what precautions must be taken to reduce to a minimum the risk to workers as well as the population living nearby.

Judgment of the Court under Oleum Gas Leak Case

The Delhi Administration established an Expert Committee to examine the effectiveness of safety and pollution control measures covering all aspects, such as the storage, production, and handling of chlorine in Shriram Industries, and to recommend actions necessary to strengthen safety and pollution control arrangements with a view to reducing risk to the community.

The Committee made a number of recommendations regarding safety and pollution control measures in an effort to reduce the risk to workers and the public, and the caustic chlorine plant was ordered not to be permitted to restart unless these recommendations were strictly followed by the management of Shriram Industries.

According to Justice Bhagwati, the Court must also address the issue of what is the measure of liability of an enterprise engaged in a hazardous or potentially dangerous industry if persons die or are hurt as a result of an accident occurring in such industry. Is the rule in Rylands v. Fletcher applicable, or is there another concept that might be used to assess liability?

The rule in the Rylands v. Fletcher case, also known as the rule of strict liability, established a concept of liability stating that if a person brings on to his land and collects and retains anything likely to do harm and such thing escapes and causes damage to another, he is accountable to compensate for the damage caused.

This rule only applies to uses of the land that are not natural; it does not apply to things that are naturally present on the land, things that escape due to acts of God, acts of strangers, or the fault of the person injured, things that escape when they have been brought with the injured person’s consent, or in some situations where there is a statutory authority.

In light of the oleum gas leak case, the Court determined that victims of leakage of dangerous substances could not be compensated under Rylands v Fletcher’s rule of strict liability. This was so because there were multiple exceptions to the rule that allowed the defendant to avoid liability. In this background, the Supreme Court concluded that it was not bound by an English law rule formed in a different context in the nineteenth century, and developed a new rule, called the rule of absolute liability.

The Court held as under:

“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.”

In the case where any such harm is caused, the concerned enterprise becomes absolutely liable to pay compensation for the losses caused.

The Court further held that the larger and more successful the firm, the greater must be the amount of compensation that must be paid by the enterprise for the harm caused by an accident in the course of engaging in a hazardous or inherently dangerous activity.

This case had a significant impact on the environmental situation and laws in India; thus, it can be easily referred to as one of the milestones in making a positive impact on the environmental situation and laws in India.

Considering the negative impact of the Bhopal gas tragedy and the oleum gas leak case on the environment, a number of enactments were made by the Union Legislature for the purpose of controlling environmental pollution. For example, the Hazardous Waste (Management and Handling) Rules, 1989, the Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989, the Public Liability Insurance Act, 1991, the National Environment Tribunal Act, 1995, and many other legislations were made to protect the environment from pollution.

Further, it was held that Article 32 not only grants the Supreme Court the authority to issue a direction, order, or writ for the enforcement of fundamental rights, but it also imposes a constitutional obligation on it to protect the fundamental rights of the people, and for that purpose, it has all incidental and ancillary powers, including the authority to devise new remedies and devise new strategies for the enforcement of fundamental rights. In addition, under Article 21, the SC not only protects the fundamental right to life, but also the right to pollution-free water/air and a safe environment.

Oleum gas leak case summary

The Hon’ble Supreme Court (SC), in its landmark decision in the Oleum Gas Leak case, first adopted the principle of Absolute Liability in 1986. The Supreme Court believed that the rule of Strict Liability emerging from the Rylands v. Fletcher judgment was insufficient to safeguard the rights of the people. Due to the exceptions to the rule of Strict Liability, several industries were able to get away with very little trouble.

According to the principle of absolute liability, if any person or business engages in an activity that is inherently dangerous or hazardous, that person or business is strictly and absolutely liable to compensate all those who are harmed by an accident caused in the course of operating such hazardous activity, and this liability will not be subject to any exceptions. They cannot get away by demonstrating that they have taken every precaution and are not at fault for anything.

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Ruchi Gandhi

The author enjoys to write informational content in the domain of company law and allied laws. She takes interest in doing thorough and analytical research on legal topics. She is a CA along with MBA (Fin) and M. Com.

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