RULE OF ABSOLUTE LIABILITY

(M.C.MEHTA V. UNION OF INDIA)

Law of Torts

Submitted by:
ASHUTOSH SHANKAR
2013030
SEMESTER I

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

Visakhapatnam
OCTOBER 2013

CERTIFICATE
Title of the subject: Law of Torts
Name of the faculty: Ms. S. Mercy Deborah

Particulars

Date and signature of the

faculty

Remarks

Abstract
First consultation
Second consultation
Third consultation and final
submission

I, ASHUTOSH SHANKAR, hereby declare that this Project titledRule of absolute

liabilitysubmitted by me is an original work undertaken by me. I have duly acknowledged
all the sources from which the ideas and extracts have been taken. The projects free from any
plagiarism issue.

(Signature of the candidate)

Place: Visakhapatnam

Name: ASHUTOSH SHANKAR

Date: 30/10/2013

Roll No. 2013030

Semester I

TABLE OF CONTENTS
PARTICULARS

PAGE

Certificate
Acknowledgement
List of Acronyms and Abbreviations
List of cases
Abstract
1.Introduction
2.M.C. Mehta V.Union of india
2.1.Facts
2.2.Issue 1- whether this honble court has jurisdiction to
Hear the present matter?
2.2.Issue 2-whether Article 21 was available against
shriram and whether Shriram owned by Delhi cloth mills
pvt. Ltd co,comes within the meaning of state under
Article 12?
2.3.Issue3-Whether compensation would be provided to
the victims of the oleum gas leake tragedy if so then what
would be the measurement of liability of such an
Enterprise engaged in caring hazardous industries?
3.Analysis
4.Conclusion
5.Bibliography
5.1.Books
5.2.Websites

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03
04
04
05
05
08
08
09
10

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15
17
18
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3. LIST OF ACRONYM AND ABBREVIATION

ACRONYM

ABBREVIATION

VOL.

VOLUME

AIR

ALL INDIA REPORTS

SC

SUPREME COURT

V.

VERSUS

UOI

UNION OF INDIA

EDN

EDITION

CLRI

CENTRAL LEATHER RESEARCH INSTITUTE

4. LIST OF CASES
PAGE NO.
1
2
3
4

Bandhua Mukti Morcha v. Union of India

Rajasthan Electricity Board v. Mohan Lal
Rudul Shah v. State of Bihar
Rylands v. Fletcher

09
12
10
06

RULE OF ABSOLUTE LIABILITY

ABSTRACT
Absolute liability is a standard of legal liability found in tort and criminal law of
various legal jurisdictions.
To be convicted of an ordinary crime, in certain jurisdictions, a person must not only
have committed a criminal action, but also have had a deliberate intention or guilty
mind (mens rea). In a crime of strict liability (criminal) or absolute liability, a person
could be guilty even if there was no intention to commit a crime.In India, absolute
liability is a standard of tort liability which stipulates that
where an enterprise is engaged in a hazardous or inherently dangerous activity and
harm results to anyone on account of an accident in the operation of such hazardous or
inherently dangerous activity resulting, for example, in escape of toxic gas the
enterprise is strictly and absolutely liable to compensate all those who are affected by
the accident and such liability is not subject to any of the exceptions which operate vis-vis the tortious principle of strict liability under the rule in Rylands v. Fletcher.

1. INTRODUCTION
Absolute liability is a standard of legal liability found in tort and criminal law of
various legal jurisdictions. To be convicted of an ordinary crime, in certain jurisdictions,
a person must not only have committed a criminal action, but also have had a deliberate
intention or guilty mind (mens rea). In a crime of absolute liability, a person could be
guilty even if there was no intention to commit a crime. In a crime of absolute liability,
a mistake of fact is not a defence. In India, absolute liability is a standard of tort liability
which stipulates that where an enterprise is engaged in a hazardous or inherently
dangerous activity and harm results to anyone on account of an accident in the operation
of such hazardous or inherently dangerous activity resulting, for example, in escape of
toxic gas the enterprise is strictly and absolutely liable to compensate all those who are
affected by the accident and such liability is not subject to any of the exceptions which

operate vis--vis the tortious principle of strict liability under the rule in Rylands v.
Fletcher1
Law has to grow in order to satisfy the needs of the fast changing society and keep
abreast with the economic developments taking place in this country. As new situations
arise, the law has to be evolved in order to meet the challenge of such new situations

The Supreme Court evolved a new rule creating absolute liability for the harm caused
by dangerous substances as was hitherto not there. The following statement of
Bhagwati,. CJ., which laid down the new principle may be noted
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 nondelegable duty to the community to ensure that no harm results to anyone on account of
hazardous or inherently dangerous activity which it has undertaken. The enterprise must
be held to be under an obligation to provide that the hazardous or inherently dangerous
activity in which it is engaged must be conducted with the highest standards of safety
and if any harm results on account of such activity, the enterprise must be absolutely
liable to compensate for such harm and it should be no answer to the enterprise to say
that it had taken all reasonable care and that the harm occurred without any negligence
on its part.
The rule was summed up in the following words,with the assertion that this rule will not
be subject to any of the exception recognized under the rule in Rylands v. Fletcher.We
would therefore hold that where an enterprise is engaged in a hazardous or inherently
dangerous activity and harm results to anyone on account of an accident in the operation
of such hazardous or inherently dangerous activity resulting, for example, in the escape
of toxic gas, the enterprise is strictly and absolutely liable to compensate all those who
are affected by the accident and such liability is not subject to any of the exceptions

1Rylands v. Fletcher [1868] UKHL 1, (1868) LR 3 HL 330

6

which operate vis-a-vis the tortious principle of strict liability under the rule in Rylands
v. Fletcher.
The court gave two reasons justifying the rule:

Firstly, that the enterprise carrying on such hazardous and inherently dangerous activity
for private profit has a social obligation to compensate those suffering therefrom, and it
should absorb such loss as an item of overheads, and Secondly, the enterprise alone has
the resources to discover and guard against such hazards and dangers. It explained the
position in the following words:
If the enterprise is permitted to carry on any hazardous or inherently dangerous
activity for its profit, the law must presume that such permission is conditional on the
enterprise absorbing the cost of any accident arising on account of such hazardous or
inherently dangerous activity as an appropriate item

of

its

overheads.

Such

hazardous or inherently dangerous activity for private profit can be tolerated only on
condition that the enterprise engaged in such hazardous or inherently
activity

indemnifies

all

dangerous

those who suffer on account of the carrying on of such

hazardous or inherently dangerous activity regardless of whether it is carried on

carefully or not. This principle is also sustainable on the ground that the enterprise also
has the resource to discover and guard against hazards or dangers and to provide
warning against potential hazard. The Court also laid down that the measure of
compensation payable should be correlated to the magnitude and capacity of the
enterprise,

so that the same can have the deterrent effect. The position was thus

stated3 : We would also like to point out that the measure of compensation in the
kind of cases referred tomust be correlated to the magnitude and capacity of the
enterprise because such compensation must have a deterrent effect. The larger and more
prosperous the enterprise, greater must be the amount of compensation payable by it for
the harm caused on account of an accident in the carrying on of the hazardous or
inherently dangerous activity by the enterprise.

2. M.C. MEHTA V. UNION OF INDIA

2.1. FACTS
Shriram Food and Fertilizers Industry a subsidiary of Delhi Cloth Mills Limited was
producing caustic and chlorine. On December 4th and 6th 1985, a major leakage of
oleum gas took place from one of the units of Shriram Food and Fertilizers Limited in
the heart of the capital city of Delhi which resulted in the death of several persons that
one advocate practicing in the Tis Hazari Courts died.
The leakage was caused by a series of mechanical and human errors. This leakage
resulted from the bursting of the tank containing oleum gas as a result of the collapse of
the structure on which it was mounted and it created a scare amongst the people residing
in that area. Hardly had the people got out of the shock of this disaster when, within two
days, another leakage, though this time a minor one took place as a result of escape of
oleum gas from the joints of a pipe.
Shriram Foods and Fertilizer Industries had several units engaged in the manufacture of
caustic soda, chlorine, hydrochloric acid, stable bleaching powder, super phosphate,
vanaspati, soap, sulphuric acid, alum anhydrous sodium sulphate, high test hypochlorite
and active earth. All units were set up in a single complex situated in approximately 76
acres and they are surrounded by thickly populated colonies such as Punjabi Bagh, West
Patel Nagar, Karampura, Ashok Vihar, Tri Nagar and Shastri Nagar and within a radius
of 3 kilometres from this complex there is population of approximately 2,00,000.
On 6th December, 1985 by the District Magistrate, Delhi under Section 133(1) of
Cr.P.C, directed Shriram that within two days Shriram should cease carrying on the
occupation of manufacturing and processing hazardous and lethal chemicals and gases
including chlorine, oleum, super-chlorine, phosphate, etc at their establishment in Delhi
and within 7 days to remove such chemicals and gases from Delhi. At this juncture
M.C.Mehta moved to the Supreme Court to claim compensation by filing a PIL for the
losses caused and pleaded that the closed establishment should not be allowed to restart.

2.2.The Issues That Came Before The Honble Court

2.2.1. Issue I
Whether this Honble Court has jurisdiction to hear the present
matter?
The first question that came up before the Honble Supreme Court as to what is the
scope and ambit of the jurisdiction of this Court under Art. 32 since the applications for
compensation made by the Delhi Legal Aid and Advice Board and the Delhi Bar
Association are applications sought to be maintained under that Article. The court said
that in Bandhua Mukti Morcha v. Union of India 2 , Bhagwati, J. held that the scope and
ambit of Article 32 of the Constitution of India does not merely confer power on this
Court to issue a direction, order or writ for enforcement of the fundamental rights but it
also lays a constitutional obligation on this Court to protect the fundamental rights of
the people and for that purpose this Court has all incidental and ancillary powers
including the power to make and adopt new remedies and fashion new strategies
designed to enforce the fundamental rights. The court can innovated new methods and
strategies for the purpose of securing enforcement of the fundamental rights,
particularly in the case of the poor and the disadvantaged who are denied their basic
human rights and to whom freedom and liberty have no meaning.

To increase the ambid of PIL filing the Honble bench also upheld and stated that
in Bandhua Mukti Morcha's case , and held that it would not be right to reject a letter
addressed to an individual justice of the Court merely on the ground that it is not
addressed to the Court or to the Chief Justice and his companion Judges. The Court
pointed out that letters would ordinarily be addressed by poor and disadvantaged
persons or by social action groups who may not know the proper form of address. And
therefore held that letters addressed to individual justice of the Court should not be
rejected merely because they fail to conform to the preferred form of address. Neither
should the Court adopt a rigid stance that no letters will be entertained unless they are
supported by an affidavit.

2 Bandhua Mukti Morcha v. Union of India AIR 1984 SC 802

9

The Court also pointed out that Art. 32 is not powerless to assist a person when he finds
that his fundamental right has been violated. He can in that event seek remedial
assistance under Art.32
The power of the court to grant such remedial relief may include the power to award
compensation in appropriate cases where infringement of the fundamental right is gross
and patent, that is, incontrovertible and ex facie glaring and either such infringement
should be on a large scale affecting the fundamental rights of a large number of persons
or it should appear unjust or unduly harsh or oppressive on account of their poverty or
disability or socially or economically disadvantaged position to require the persons or
persons affected by such infringement to initiate and pursue action in the civil Courts. It
is only in exceptional cases of the nature indicated by us above, that compensation may
be awarded in a petition under Art. 32. It was pointed out that the Court awarded
compensation in Rudul Shah v. State of Bihar 3. And thus the Honble court held that the
court has jurisdiction to hear this case and secondly if the court finds fit then it would
award compensation to the victims who have alleged that there Fundamental Rights
have been infringed.

2.2.2.ISSUE II

Whether Article 21 was available against Shriram and whether

Shriram owned by Delhi Cloth Mills Ltd Public Co, comes within the
meaning of State under Article 12?

The next question that arose for consideration was whether Article 21 is available
against Shriram which is owned by Delhi Cloth Mills Limited, a public company
limited by shares and which is engaged in an industry vital to public interest and with
potential to affect the life and health of the people. The issue of availability of Art. 21
against a private corporation engaged in an activity which has potential to affect the life
and health of the people was vehemently argued by counsel for the applicants and
Shriram. It was emphatically contended by counsel for the applicants, that the American
3Rudul Shah v. State of Bihar 1983 AIR 1086 1983 SCR (3) 508
10

doctrine of State Action and the functional and control test enunciated by the Supreme
Court in its earlier decisions, that Art. 21 is available. The contention was that as
Shrirarn was carrying on an industry which was in accordance to the Government's own
declared industrial policies, was ultimately intended to be carried out by itself, but
instead of the Government immediately embarking on that industry, Shriram was
permitted to carry it on under the active control and regulation of the Government.
Since the Government intended to ultimately carry on this industry and the mode of
carrying on the industry could vitally affect public interest, the control of the
Government was linked to regulating that aspect of the functioning of the industry
which could vitally affect public interest.
The applicants also contended on the regulatory mechanism provided under the
Industries (Development and Regulation) Act, 1951 where industries are included in the
schedule if they vitally affect public interest. It was pointed out that sizable aid in loans,
land and other facilities granted by the Government to Shriram in carrying on the
industry. And according to the American State Action doctrine, if supported, controlled
or regulated by the State may get so entwined with governmental activity as to be
termed State action and it would then be subject to the same constitutional restraints on
the exercise of power as the state.
On the other hand, counsel for Shriram contended against expanding Art. 12 so as to
bring within its ambit private corporations. He contended that control or regulation of a
private corporation's functions by the State under general statutory law such as the
Industries (Development and Regulation) Act 1951 is only in exercise of police power
of regulation by the State. Such regulation does not convert the activity of the private
corporation into that of the State. The activity remains that of the private corporation,
the State in its police power only regulates the manner in which it is to be carried on. It
was emphasized that the control which deems corporation, an agency of the State, must
be of the type where the State controls the management policies of the Corporation
whether by sizable representation on the board of management or by necessity of prior
approval of the Government before any new policy of management is adopted, or by
any other mechanism. It was also pointed out that the State action doctrine to the Indian
situation means control and function test have been evolved in order to determine
whether a particular authority is an instrumentality or agency of the State and hence
'other authority' within the meaning of Article 12. The learned counsel also pointed out
11

that those rights which are specifically intended by the Constitution makers to be
available against private parties are so provided in the under Art 17, Art 23 and Art 24.
Therefore, to so expand Art 12 as to bring within its ambit even private corporations
would be against the fundamental rights.
In Rajasthan Electricity Board v. Mohan Lal 4 , the Supreme Court was called upon to
consider whether the Rajasthan Electricity Board was an 'authority' within the meaning
of the expression 'other authorities' in Art. 12. Bhargava. J. who delivered the judgment
pointed out that the expression 'other authorities' in Art. 12 would include all
constitutional and statutory authorities on whom powers are conferred by law. And if
any body of persons has authority to issue directions, the disobedience of which would
be punishable as a criminal offence, that would be an indication that the concerned
authority is state.
The ratio of this decision may thus be stated to be that a constitutional or statutory
authority would be within the expression "other authorities" if it has been invested with
statutory power to issue binding directions to third parties, the disobedience of which
would entail penal consequences or it has the sovereign power to make rules and
regulations having the force of law.
It was held that Courts should be anxious to enlarge the scope and width of the
fundamental rights by bringing within their sweep every authority which is an
instrumentality or agency of the Government or through the corporate personality of
which the Government is acting, whether through natural persons or through corporate
entities to the basic obligation of the fundamental rights.
According to the guidelines laid down by the Supreme Court in Som Prakash v. Union
of India , the Honble Court started to examine whether a private corporation such as
Shriram comes within the ambit of Art. 12 or not.
The Honble Supreme Court held that under the Industrial Policy Resolution, 1956
industries were classified into three categories which are regarded to be a part which the
State. The first category was to be the exclusive responsibility of the State. The second
category comprised those industries which would be progressively State owned and in
which the State would therefore generally take the initiative in establishing new
4 Rajasthan Electricity Board v. Mohan Lal 1967 AIR 1857, 1967 SCR (3) 377
12

undertakings but in which private enterprise would be expected to supplement the effort
of the State by promoting and developing undertakings either on its own or with State
participation. The third category would include all the remaining industries and their
future development would generally be left to the initiative and enterprise of the private
sector..
It was pointed out on behalf of the applicants that as Shriram is registered under the
Industries (Development and Regulation) Act, 1951, its activities are subject to
extensive and detailed control and supervision by the Government. Under the Act a
license is necessary for the establishment of a new industrial undertaking or expansion
of capacity or manufacture of a new article by an existing industrial undertaking
carrying on any of the Scheduled Industries included in the First Schedule of the Act.
Finally the Honble Court said that they do not propose to decide whether a private
corporation like Shriram would fall within the scope and ambit of Article 12, because of
insufficient time to consider and reflect on this question in depth. The hearing of this
case before us concluded only on 15th December 1986 and we are called upon to
deliver our judgment within a period of four days, on 19th December 1986. The Court
felt that this is not a question on which we must make any definite pronouncement at
this stage as it needs detailed consideration.
2.2.3.Issue III

Whether compensation would be provided to the victims of the oleum

gas leake tragedy if so then what would be the measurement of liability
of such an enterprise engaged in caring hazardous industries?
Finally the question which was seriously debated before the Honble Court was the
question as to what is the measure of liability of an enterprise which is engaged in an
hazardous or inherently dangerous industry, if by reason of an accident occurring in
such industry, persons die or are injured. Does the rule in Rylands v. Fletcher apply or is
there any other principle on which the liability can be determined. The rule in Rylands
v. Fletcher was evolved in the year 1866 provides that a person who for his own
purpose brings on to his land and collects and keeps there anything likely to do mischief
if it escapes must keep it at his peril and, if he fails to do so, is prima facie liable for the
damage which is the natural consequence of its escape.
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The liability under this rule is strict and it is no defense that the thing escaped without
that person's willful act, default or neglect or even that he had no knowledge of its
existence. This rule laid down a principle of liability that if a person who brings on to
his land and collects and keeps there anything likely to do harm and such thing escapes
and does damage to another, he is liable to compensate for the damage caused. Of
course, this rule applies only to non-natural user of the land and it does not apply to
things naturally on the land or where the escape is due to an act of God and an act of a
stranger or the default of the person injured or where the thing which escapes is present
by the consent of the person injured or in certain cases where there is statutory authority.
.
Bhagwati. J. thereafter stated that, We in hold our hands back and I venture to evolve
a new principle of liability which English Courts have not done. We have to develop our
own law and if we find that it is necessary to construct a new principle of liability to
deal with an unusual situation which has arisen and which is likely to arise in future on
account of hazardous or inherently dangerous industries which are concomitant to an
industrial economy, there is no reason why we should hesitate to evolve such principle
of liability merely because it has not been so done in England. 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. The enterprise must
be held to be under an obligation to provide that the hazardous or inherently dangerous
activity in which it is engaged must be conducted with the highest standards of safety
and if any harm results on account of such activity, the enterprise must be absolutely
liable to compensate for such harm and it should be no answer to the enterprise to say
that it had taken all reasonable care and that the harm occurred without any negligence
on its part. Since the persons harmed on account of the hazardous or inherently
dangerous activity carried on by the enterprise would not be in a position to isolate the
process of operation from the hazardous preparation of substance or any other related
element that caused the harm the enterprise must be held strictly liable for causing such
harm as a part of the social cost for carrying on the hazardous or inherently dangerous
activity
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3. ANALYSIS
Hazardous industries are enterprises engaged in hazardous process which may cause
adverse effect on health of the people and the environment unless special care is taken
to the leakage of the raw material or by product. In this era of open global market
economy hazardous industries are playing a decisive role in the economic development
and in the advancement of the economy, but simultaneously they are causing the
problem of risk to human life and environment. The developing countries like India
suffer from the acute problem of environmental pollution.
The origin of the national policy on chemical and hazardous industries relates to two
major incidents of gas leakage, the Bhopal tragedy in 1994 and the oleum gas leak
tragedy in 1995. In these cases the Honble Supreme Court felt that the English doctrine
of Strict Liability adopted by the House of Lords in Rayland v. Fletcher would not
suffice the changing need of the liability principle in India. So the Honble Supreme
Court felt the need of adopting the principle of Absolute Liability or else the Court of
law would fail to provide justice to the victims of these large scale environmental
disaster. Where an enterprise is engaged in a hazardous or inherently dangerous activity
and harm results to anyone on account of an accident in the operation of such hazardous
or inherently dangerous activity resulting, for example, in escape of toxic gas the
enterprise is strictly and absolutely liable to compensate all those who are affected by
the accident and such liability is not subject to any of the exceptions which operate in
the tortious principle of strict liability. The larger and more prosperous the enterprise,
the greater must be the amount of compensation payable by it for the harm caused on
account of an accident in the carrying on of the hazardous or inherently dangerous
activity by the enterprise.
The principles that came up from this historical case was the Principle of Absolute
Liability, secondly the Principle of Polluters Pays, thirdly the Principle of Precautionary
Measures, and finally the Principle of Highest Safety Standards came up in this
particular case.
There after a number of enactments were made by the union legislature for the purpose
of controlling the environmental pollution, like the Hazardous Waste (Management and
Handling) Rules, 1989, secondly the Manufacturing Storage and Import of Hazardous

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Waste Chemical Rules, 1989, thirdly the Public Liability Insurance Act, 1991, fourthly
the National Environmental Tribunal Act, 1995, an even many more legislation are
made on the protection of environment from pollution.
Again the scope of Art 21 was enlarged the Right to human health and healthy
environment was approved, the Right of enjoyment of pollution free water and air for
full enjoyment of life as a part of Right to Life was approved. And Right to clean
environment was also comprehended as a Right under Art 21 of The Constitution of
India.
In addition to all these the judgment of M.C.Mehta case gave a new dimension to the
Tort Laws in India. Before this case the principle of strict liability was applicable where
the defendant could take the plea of defenses, but this ruling of the Supreme Court the
Absolute principle came up. Though the Court of Law is always open to hear any kind
of injustice done to people and it provides compensation to the victims whose rights are
violated or who have suffered loss due to the negligence of others but at this juncture
the Honble Court could not provide any compensation to the victims of the oleum gas
leake tragedy. The Court could have given an interim compensation to the victims and
to the families of those who have died in the course of the disaster. The interim
compensation could have helped the victims by way of proper habilitation, providing
proper medical facilities and other.
Latter the Honble Court has given exemplary compensation to the victims of the oleum
gas tragedy and even today the Court is of the view that the compensation that was
granted was not enough as compared to the losses suffered. Till date the Honble Court
is thinking of providing more compensation to the victims, as people who are living
even today in the area where the tragedy took place are suffering a lot, as the oleum gas
is still present in the atmosphere. A lot of cases of still born child came up, and the
medical report of many showed that the presence of oleum gas is the reason for those
still born child. What ever may it be the situation I hope that the Honble Court will
definitely provide the victims with appropriate compensation, as the Honble Court
deems fit keeping in mind the principles of Natural justice.

16

4. Conclusion
Now, at the end the researcher would like to conclude his project with a handful
knowledge about what is basically the Rule of Absolute Liability. Absolute liability is a
standard of legal liability found in tort and criminal law of various legal jurisdictions
To be convicted of an ordinary crime, in certain jurisdictions, a person must not only
have committed a criminal action, but also have had a deliberate intention or guilty
mind (mens rea). In a crime of strict liability (criminal) or absolute liability, a person
could be guilty even if there was no intention to commit a crime. The difference
between strict and absolute liability is whether the defence of a mistake of factis
available: in a crime of absolute liability, a mistake of fact is not a defence.

17

5.BIBLIOGRAPHY
5.1.Books:
1., Prof M.P Jain., Indian Constitutional Law ,(5th edn., Wadhwa Nagpur,2007)
2. . Ratanlal and Dhirajlal ,The Law Of Torts,(26th edn,lexisnexis,2010)
3. R.K Bangia. ,Law of Torts,(22nd edn,Allahabad Law Agency,2012)

5.2.Websites:
1.www.wikipedia.com
2.www.manupatra.com
3.www.westlawindia.com
4.www.indiankanoon.com

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