Tort Law

M.C. Mehta v. Union of India

AIR 1987 SC 1086; (1987) 1 SCC 395

Citation: AIR 1987 SC 1086; (1987) 1 SCC 395
Court: Supreme Court of India
Date: 19 Dec 1986
Bench: P.N. Bhagwati CJI; Ranganath Misra, G.L. Oza, M.M. Dutt and K.N. Singh JJ

Facts

• Shriram Foods and Fertilizer Industries operated industrial units in a densely populated area of Delhi.
• Its activities involved hazardous chemicals, including oleum gas.
• M.C. Mehta filed a public-interest petition seeking closure or relocation of the dangerous units.
• While the proceedings were pending, oleum gas escaped from the plant on 4 December 1985.
• The leakage affected workers and members of the surrounding public.
• An advocate died following exposure.
• A second, smaller leakage occurred two days later.
• The incidents raised questions concerning compensation for persons harmed by hazardous industrial activity.
• Shriram argued that traditional principles under Rylands v. Fletcher contained exceptions and might not impose liability in every case.
• The Supreme Court considered whether Indian law required a stricter rule for enterprises engaged in inherently dangerous industries.

• What liability applies to an enterprise conducting hazardous or inherently dangerous activity?
• Whether the exceptions to Rylands should apply in India.
• Whether the enterprise’s duty can be delegated.
• How compensation should reflect the scale of the enterprise and the harm.

• An enterprise engaged in hazardous or inherently dangerous activity owes an absolute and non-delegable duty to the community.
• It must ensure that no harm results from the dangerous activity.
• Where harm occurs, the enterprise is absolutely liable.
• Liability is not avoided by proving:
o reasonable care;
o absence of negligence;
o act of a stranger;
o Act of God;
o employee fault; or
o another traditional Rylands exception.
• The enterprise is permitted to conduct the activity for profit and must absorb the cost of accidents as part of its overheads.
• Compensation should be related to:
o the magnitude of the harm; and
o the size and financial capacity of the enterprise,
so that liability has a deterrent effect.

• Shriram handled substances capable of causing widespread injury if they escaped.
• The surrounding population had no meaningful control over the industrial risk.
• Traditional Rylands liability was considered inadequate because:
o it arose in a different industrial period;
o it allowed several exceptions; and
o hazardous modern enterprises could cause mass casualties.
• The Court reasoned that an enterprise possessing specialised knowledge and resources was best placed to prevent and insure against accidents.
• Allowing it to escape liability by showing reasonable care would leave innocent victims bearing the consequences of a danger created for private economic activity.
• The duty was non-delegable because safety responsibility could not be transferred to employees, contractors or suppliers.
• The rule focused upon the nature of the activity and the resulting harm rather than proof of operational fault.
• The Court did not finally calculate every individual victim’s damages in the judgment.
• It directed legal-aid bodies to assist affected persons in bringing appropriate compensation claims.

• The Supreme Court formulated the Indian rule of absolute liability for hazardous industries.
• It held that an enterprise causing harm through inherently dangerous activity is liable without exception.
• The rule was deliberately stricter than Rylands v. Fletcher.
• Compensation should reflect both the seriousness of the harm and the enterprise’s financial capacity.