UNIVERSITY

PETROLEUM & ENERGY

STUDIES
OF LEGAL STUDIES

OF

COLLEGE

BBA.,LL.B.(Hons.) CORPORATE LAW

SEM-V
ACADEMIC YEAR: 2014-15
DECEMBER

SESSION: J ULY-

ADMINISTRATIVE LAW
LLBL 141
Under the Supervision of DR.RAMESH KUMAR

CASE STUDY-MC MEHTA VS UNION OF INDIA

NAME:
SAP NO:
ROLL NO:

AYUSH JAIN
500022112
R760212016

SUMMARY
The petitioner, ShriM.C.Mehta filed this Writ Petition in the year 1985 under Article 32 of the
Constitution of India, and sought directions from the Honble Court that various units of Shriram
Industries were hazardous to the community therefore directed to be closed.The issue raised before
the Division bench of the Supreme Court involved substantial question of Laws relating to the
interpretation of Article 21 and Article 32 of the Constitution.

FACTS OF THE CASE

Issue raised regarding the business activities of Sriram Foods and Fertiliser Industries (in Short
SRIRAM), an enterprise of Delhi Cloth Mills Ltd, a public limited company having its registered
office in Delhi.
1. A writ petition under Art 32 of the Constitution has been brought before the SC by way of
PIL on 1985 for the closure of Sriram on the ground of health hazard and for laying down
principle and norms for determining the liability of the large enterprises engaged in
manufacture and sale of hazardous products.
2. A question was raised sometimes in March 1985 in parliament in regard to possibility of
major leakage of Liquid chlorine from the Caustic Unit of Shriram and of danger to the lives
of thousands of workers and other.
3. The writ petition was pending on 4th and 6th December 1985 there was escape of Oleum
gas from one of the units of Sriram and as a result of such leakage several persons were
affected and according to the petitioner and the Delhi Bar Association, one Advocate
practicing in the Tis Hazari Courts died.
4. Application were filed by the Delhi Legal Aid and advice Board and the Delhi Bar
Association for award of compensation to the person who had suffered harm on account of
escape of Oleum Gas.

FACTS IN ISSUE
1. 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?
2. 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?

JUDGEMENT
The Court held that as Sriram could not be subjected to the discipline under Article 21, the enterprise
having not been decided as Authority within Art 12 of the constitution and accordingly directed
the Legal Aid and Advise Board and the Delhi Bar Association to Approach the appropriate Courts to
Claim compensation for the victims of the Oleum Gas Escape.

DISCUSSION
I.

CONSTITUTIONAL PROTECTION
The constitution of India is not an inert but a living document which evolves and grows with
time. The specific provisions on environment protection in the constitution are also result of
this evolving nature and growth potential of the fundamental law of the land. The chapter on
fundamental duties of the Indian Constitution clearly imposes duty on every citizen to protect
environment. Article 51-A (g), says that It shall be duty of every citizen of India to protect
and improve the natural environment including forests, lakes, rivers and wild life and to have
compassion for living creatures. The Environment (Protection) Act, 1986 defines
environment as environment includes water, air and land and the interrelationship which
exists among and between air, water and land and human beings, other living creatures,
plants, micro-organism and property.
According to Article 21 of the constitution, no person shall be deprived of his life or
personal liberty except according to procedure established by law. In M.C. Mehta vs. Union
of India1, 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 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 Supreme Court treated the
right to live in pollution free environment as a part of fundamental right to life under Article
21 of the Constitution.
Article 21 has received liberal interpretation from time to time after the decision of the
Supreme Court in Maneka Gandhi vs. Union of India 2. Article 21 guarantees fundamental
right to life. Right to environment, free of danger of disease and infection is inherent in it.
Right to healthy environment is important attribute of right to live with human dignity. The
right to live in a healthy environment as part of Article 21 of the Constitution was first
recognized in the case of Rural Litigation and Entitlement Kendra vs. State3, (Popularly
known as Dehradun Quarrying Case). It is the first case of this kind in India, involving issues
relating to environment and ecological balance in which Supreme Court directed to stop the
excavation (illegal mining) under the Environment (Protection) Act, 1986.

1AIR 1987 SC 1086

2 AIR 1978 SC 597
3 AIR 1988 SC 2187

Public Interest Litigation under Article 32 and 226 of the constitution of India resulted in a
wave of environmental litigation. The leading environmental cases decided by the Supreme
Court includes case of the installation of safeguard at a chlorine plant in Delhi (M.C. Mehta
V. Union of India, AIR 1988 SC 1037), closure of limestone quarries in the Dehradun region
(Dehradun Quarrying case4), etc.

II.

INTERNATIONAL CONVENTIONS
1. National Biodiversity strategies and action plan (NBSAPs) are the principal
instruments for implementing the convention at the national level ( Article 6 ). The
convention requires countries to prepare a national biodiversity strategy( or equivalent
instrument) and to ensure that this strategy is mainstreamed into the planning and
activities of all those sectors whose activities can have an impact ( positive and negative)
on biodiversity. To date [2012-02-01], 173 Parties have developed NBSAPs in line with
Article 6.
2. Convention on Long-Range Trans boundary Air Pollution (LRTAP), Geneva, 1979,
often abbreviated as Air Pollution orCLRTAP, is intended to protect the human
environment against air pollution and to gradually reduce and prevent air pollution,
including long-range trans boundary air pollution. It is implemented by the European
Monitoring and Evaluation Programme (EMEP), directed by the United Nations
Economic Commission for Europe (UNECE).
3. Convention on the Control of trans boundary Movements of Hazardous Wastes and
their Disposal, Basel, 1989, usually known as the Basel Convention, is an
international treaty that

was

designed

to

reduce

the

movements

of hazardous

waste between nations, and specifically to prevent transfer of hazardous waste

from developed to less developed countries (LDCs). It does not, however, address the
movement of radioactive waste. The Convention is also intended to minimize the amount
and toxicity of wastes generated, to ensure their environmentally sound management as
closely as possible to the source of generation, and to assist LDCs in environmentally
sound management of the hazardous and other wastes they generate.
4. Convention on Civil Liability for Damage Caused during Carriage of Dangerous
Goods by Road, Rail, and Inland Navigation Vessels (CRTD), Geneva, 1989.
5. Convention on the Transboundary Effects of Industrial Accidents, Helsinki, 1992,it
is a United Nations Economic Commission for Europe (ECE) convention signed
4AIR 1985 SC 652

in Helsinki, Finland, on 17 March 1992, that entered into force on 19 April 2000. The
Convention is designed to protect people and the environment against industrial
accidents. The Convention aims to prevent accidents from occurring, or reducing their
frequency and severity and mitigating their effects if required. The Convention promotes
active international cooperation between countries, before, during and after an industrial
accident. The Convention helps its Parties -- that is States or certain regional
organizations that have agreed to be bound by the Convention -- to prevent industrial
accidents that can have transboundary effects and to prepare for, and respond to, accidents
if they occur. The Convention also encourages its Parties to help each other in the event
of an accident, to cooperate on research and development, and to share information and
technology.

III.

Legal Protocal
The Supreme Court referred to the existing case laws:In Rajasthan Electricity Board v. MohanLal5 , 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 anybody 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'.
Ray. C. J., in Sukhdev v. Bhagat Ram6 , where Mathew. J. propounded a broader test, where
he emphasized on the concept of 'State'. He expanded on this dictum by stating that the
emerging principle appears to be that a public corporation being an instrumentality or agency
of the 'State' is subject to the same constitutional limitations as the 'State' itself, namely, that
the corporation is the creation of the 'State' and that there is existence of power in the
corporation to invade the constitutional rights of the individual.
In Ramanna D. Shetty v. International Airport Authority 7 the Court held that there is no
cut and dried formula which would provide the correct division of corporations into those
which are instrumentalities or agencies of Government and those which are not. The Court
made an analogy on the concept of State Action as developed in the United States wherein

5 1967 AIR 1857, 1967 SCR (3) 377

6 AIR 1975 SC 1331
7 1979 AIR 1628, 1979 SCR (3) 1014

private agency if supported by extra-ordinary assistance given by the State may be subject to
the same constitutional limitations as the State. The Court also held that if extensive and
unusual financial assistance is given and the purpose of such assistance coincides with the
purpose for which the corporation is expected to use the assistance and such purpose is of
public character, it may be a relevant circumstance supporting an inference that the
corporation is an instrumentality or agency of the Government.
The criteria that evolved in RamanaShetty's case , was applied in Ajay Hasia v. Khalid
Mujib , where it was further emphasized that: where constitutional fundamentals vital to the
maintenance of human rights are at stake, the Government may act through the
instrumentality or agency or it may employ the instrumentality or agency of judicial persons
to carry out its function. It is really the Government which acts through the instrumentality or
agency of the corporation and for the purpose of convenience of management and
administration. If the Government acting through its officers is subject to certain
constitutional limitations it must follow a fortiori that the Government acting through the
instrumentality or agency of a corporation should be equally subject to the same limitations.
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.

IV.

RECOMMANDATION
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 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 others.

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.

BIBLIOGRAPHY
1. Environmental Law In India, Second Edition, by P.Leelakrishnal, Lexis Nexis
Butterworths,2005.
2. Environmental Law And Policy In India, Second Edition, by Shyam Divan and Armin
Rosencranz, Oxford University Press, 2005.
3. Environmental Law, Second Edition, by S.C.Shastri, Eastern Book Company, 2005.
4. Indian Constitutional Law, Fifth Edition, by Prof M.P.Jain, Wadhwa Nagpur, 2007.
5. http://pib.nic.in/newsite/efeatures.aspx?relid=105411