CASE ANALYSIS : M.C MEHTA VS. UNION OF INDIA, 1986 ( Oleum Gas Leak Case )

INTRODUCTION 

On the 3rd December 1984, The Bhopal tragedy occurred where more than 20,000 people died and approximately 60,000 people were affected including workers and nearby residents in the Bhopal city, due to chemical leakage. While people were still recovering when another disaster happened on 4th and 6th December of 1985 in Shriram Foods and Fertilizers Industries, where oleum gas leaked in two of their units where again workers and peoples suffered harm because the industry was located in Kirti Nagar, a densely populated area in Delhi. 

These cases raised people’s concerns about industrial safety and protection of the environment and made people realise that there is a law missing and these environmental issues are too important to not be ignored.

In this case, For the safety of the people and to protect the fundamental rights which are guaranteed Under Article 21 of the Constitution. A social activist MC Mehta filed a Public Interest Litigation (PIL) in the Supreme Court under Article 32 of the Constitution. As a result, the Supreme Court introduced and established the “Rule of Absolute Liability” for industries that emphasize the safety of strict precautions in the handling of hazardous substances.

FACTS OF THE CASE

1. Shriram Foods and Fertilisers Industries, a proud affiliate of Delhi Cloth Mills Ltd, operates its industrial units on an expansive 76 acres of prime land in Kirti Nagar, Delhi. These units manufactured chemicals — Oleum gas, Hydrochloric acid, Caustic soda, Chlorine, and Sulphuric acid.

2. In the aftermath of the Bhopal Gas Disaster in 1984, significant concerns regarding safety at Shriram’s fertilizer plant emerged, leading to government inspections and calls for improvements. In March 1985, discussions in the Indian Parliament revealed the potential hazards associated with leaks from Shriram’s caustic chlorine plant. This prompted additional inspections and a call for enhanced safety recommendations to address these concerns. 

3. The situation escalated when environmental activist Mahesh Chander Mehta, M.C. Mehta, filed a writ petition under Article 32 of the Indian Constitution, seeking the closure of Shriram’s hazardous industrial operations. While this petition was under consideration, On December 4 1985, a tragic oleum gas leak occurred, leaving a profound sense of loss resulting in considerable harm to workers and the general public, including the unfortunate death of an advocate.

4. The community was still reeling from a recent tragedy when it faced another challenge shortly thereafter—a minor incident involving the release of oleum gas from a pipeline’s joints. This escape of gas resulted in damage to local properties and raised concerns among residents. In response, the Delhi Legal Aid & Advice Board, working alongside the Delhi Bar Association, formally submitted claims for compensation on behalf of those affected. This coordinated effort highlights the community’s resilience and the legal avenues available for seeking redress in the aftermath of such incidents.

5. On December 6, 1985. In response to the gas leak incident, the Delhi administration acted swiftly by issuing a formal directive through the Delhi Magistrate. This decision was made in accordance with sub-section (1) of Section 133 of the Code of Criminal Procedure, which allows magistrates to take necessary actions to prevent imminent harm or danger to public health or safety. This order highlights the administration’s commitment to addressing urgent issues and ensuring the well-being of the community, mandating Shriram’s Industries to either cease the use of harmful chemicals, relocate them to a safer location, or appear in court to explain their actions on December 17, 1985 to provide justification as to why this order should not be enforced.

6. Petitioners demanded full industry disclosure and remedial measures after the gas spillage. Respondents argued against considering compensation claims, stating that the oleum gas escape occurred after the writ petition was filed. They contended that the petitioners should have amended the writ to include compensation, and since they did not, those issues cannot be addressed.

7. Operating such industrial units in densely populated urban areas, highlighting the ongoing tension between industrial activity and public safety. The subsequent legal battles involved multiple writ petitions, against 89 respondents and M.C. Mehta advocated for the closure of Shriram Food and Fertilizer industries units. The Supreme Court’s involvement in this case centered around evaluating the constitutional validity to refer the case to a larger bench emphasising the importance of addressing substantial legal issues related to Articles 21 and 32 of the Constitution. 

ISSUES OF THE CASE 

1. Whether the Strict Liability or the Absolute Liability be followed ?

2. How far is Article 21 and 32 of the Constitution relevant in this case?

3. Whether Shriram Food and Fertilizer Industries is encompassed within the provisions of Article 12 as “State” ?

4. How to effectively determine liability and the appropriate amount of compensation in this case?

5. How do the industries regulate the mechanism to function in such areas ?

JUDGEMENT 

The court has confidently affirmed that it is addressing the specific question referred to it. Following a comprehensive examination of relevant precedents and a thorough interpretation of the applicable provisions, the court has solidified the following conclusions in its judgment :

• In the case of Ryland v. Fletcher, decided by the English Court in 1866, the principle of “Strict Liability” was established. This principle asserts that an individual who maintains hazardous substances on their property may be held liable for any damages incurred if those substances escape and cause harm. However, it is important to note that there are specific exceptions to this rule, including instances of the Act of God, the negligence of the plaintiff, or the fault of a third party.

• In contrast, “Absolute Liability” established by Justice P.N Bhagwati is a related but distinct concept that allows for no exceptions. Under this principle, any individual engaged in inherently dangerous or hazardous activities will be held fully liable for any harm that arises from accidents occurring during such activities. This means that liability is imposed regardless of any precautions taken to prevent harm.

• In this case, the court opted to establish the principle of Absolute Liability rather than adhering to the 19th-century doctrine of strict liability. The court concluded that the responsibility lies entirely with the industry to ensure safety, regardless of the company’s assertions that it has implemented all necessary precautions and has not demonstrated negligence. It is essential to recognize that individuals harmed in such situations are entitled to justice, and their Fundamental Rights must be upheld under all circumstances.

• This move highlights the court’s commitment to thoroughly interpreting Article 21, which includes the Right to protect life and freedom, underscores its vital role in serving the public interest. This approach not only seeks justice but also reinforces the Rule of law, encouraging hope for a fair outcome.

• Moreover, the interpretation of Article 32 considering how a writ and compensation might be awarded. The court in this case referenced the judgement in Bandhua Mukti Morcha v. Union of India, wherein it was determined that the scope of Article 32 encompasses not only preventive measures to address potential violations of Fundamental Rights but also remedial measures for instances where rights have already been infringed.

• This approach is essential for ensuring the enforcement of Fundamental Rights, particularly in relation to the rights of economically disadvantaged, underprivileged, and marginalized groups within society.

• In reference to Article 12 of the Constitution and the classification of an industry as a “State entity”, it was ultimately determined that Shriram operates under the auspices of the government without becoming a fundamental component of the State.

• The Supreme Court issued a final decision granting Shriram permission to reopen the specified plant. Although the earlier orders from the Inspector and Assistant Commissioner of Factories, have been suspended. Additionally, the court has issued a temporary operating order for the factory, accompanied by eleven specific conditions that must be adhered to and along with the imposition of fines for non-compliance. The Court further emphasized that any failure to maintain these conditions would result in the revocation of the permission granted. An expert committee has been established for the purpose to ensure compliance and oversight of industry operations, Some of these are given below : 

1. In the unfortunate event that a gas escape leads to the death or injury of employees or nearby residents, it is requested that Shriram’s employees provide the Chairman of Delhi Cloth Mills Limited with a commitment to assume personal accountability for compensation

2. The Water & The Air (Prevention and Control of Pollution) Act mandates that designated emission levels be monitored by an inspector appointed by the Central Pollution Control Board.

3. It is important to set a committee for the safety of employees within the organization.

4. The industry has a responsibility to educate the public regarding the effects of chlorine and the appropriate measures for its handling.

5. Implementation of a loudspeaker system to alert neighboring residents in the event of a gas leak, as well as providing audio-visual resources for employee training on plant safety, is recommended.

6. It is imperative that staff utilize appropriate safety gear, including harnesses and helmets, to ensure their protection.

• Further, The management has been instructed to deposit a sum of Rs. 20 lakhs as security for the compensation claims of victims affected by the Oleum gas leakage. This amount is to be submitted to the registrar of the court. Furthermore, a bank guarantee amounting to Rs. 15 lakhs is also required to be deposited, which will be encashed in the event of any gas leakage occurring within three years from the date of the judgment.

• While the Court permitted the caustic chlorine plant to restart, it expressed deep admiration for petitioner MC Mehta, recognizing his “valiant efforts” in advocating for environmental protection. In recognition of the circumstances, the court instructed Shriram to remit Rs. 10,000 as a cost contribution.

• The five-judge bench addressed constitutionally significant questions, leading to the establishment of new legal principles that highlight the importance of environmental advocacy.

REASONING 

The Supreme Court of India safeguarding fundamental rights while establishing new legal principles to address industrial chemical hazards. This pivotal ruling has fundamentally shaped the framework of environmental jurisprudence in the country.

1. Doctrine of Absolute Liability

The Supreme Court of India has established the principle of absolute liability, which imposes a more stringent standard than that in Rylands v. Fletcher (1868). The previous allowance for exceptions such as acts of God is now viewed as outdated in the Indian context, leading to the creation of a new legal framework that aligns with the nation’s industrial and social realities.

2. Protection of Fundamental Rights

In the case of Maneka Gandhi v. Union of India (UOI) 1978, to include the Right to a healthy and safe environment, the court expanded the scope of Article 21. Activities that threaten life are seen as violations of this right, underscoring the judiciary’s role in ensuring that industries operate safely. 

3. Deep Pockets and Social Justice

The Court has determined that large corporations with substantial financial resources must bear full liability, ensuring adequate compensation for victims of industrial risks. This principle is evident in Union Carbide Corporation v. Union of India (1991), known as the Bhopal Gas Tragedy Case, which reinforced absolute liability and the deep pockets theory.

4. Necessity for Indian Legal Standards

The Court has emphasized the need for legal doctrines “Polluter pays” that are specifically designed for India’s unique circumstances, particularly in the face of rapid industrialization and urban growth, rather than relying solely on Western legal precedents.

REFERENCES

1. https://indiankanoon.org/doc/1486949/
2. https://lawbhoomi.com/oleum-gas-leak-case/
3. https://www.indiatoday.in/magazine/economy/story/19860115-oleum-leakage-spells-big-trouble-for-shriram-food-and-fertilisers-800495-1986-01-15
4. https://www.jstor.org/stable/43951922

Written by Trisha Kesharwani from Shambhunath Institute of Law and an intern under Legal Vidhiya.

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Karan Chhetri

‘Social Media Head’ and ‘Case Analyst’ of Legal Vidhiya.