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THE GIFT OF

INDIAN
JUDICIARY TO
THE GLOBAL
JURISPRUDENC
E :
THE RULE

OF
STRICT
LIABILITY
INTRODUCTION
The principle of absolute liability has been derived from one of the most intriguing chapters of the
Indian jurisprudence. Its definition as laid down by then Chief Justice of India, P.N. Bhagwati
revolutionized the entire trend on environmental protection laws in India. It commenced an entire
new chapter in Indias environmental law history, and brought a level of maturity in the Indian
Judiciary never seen before.

THE RULE OF ABSOLUTE LIABILITY


The rule of strict liability famously laid down by Blackburn J., in Rylands v. Fletcher1, proved to be
rather ineffective with the passage of time to counter the dangerous use of ones property or an
industry that produced substances or wastes detrimental to public health. The pre- equipment
essential for establishing a liability under the principle of strict liability viz., the non- natural use of
land, use of a dangerous thing and the element of escape provided substantial loopholes to the
enterprises to escape liability under the Rylands v. Fletcher2, rule. Moreover, the exceptions provided
1 (1868) LR 3 HL 330
2

within the rule (and restated by the Supreme Court of India in M.C. Mehta v. Union of India3) afford
ample opportunity to the commercial enterprises to escape liability.
The Supreme Court of India in M.C. Mehta v. Union of India,4 evolved a more stringent rule of strict
liability than in Rylands v. Fletcher5 rule. In this case, which involved the leakage of and the harm
caused by Oleum gas from one of the units of Shriram Industries in Delhi. The court held that
keeping in mind the needs and demands of a modern society with highly advanced scientific
knowledge and technology where for the sake of development program, it was necessary to carry out
inherently dangerous or hazardous industry, a new rule had to be laid down to adequately deal with
the problems arising in a highly industrialized economy. This new rule had to be based on the English
rule of strict liability, but had to be even more austere such that no firm carrying out an inherently
dangerous or hazardous activity might not escape from liability, irrespective of the fact that there was
any negligence involved or not. The court also pointed out that the duty owed by such an enterprise
to the society is absolute and non- delegable and that the enterprise cannot escape liability by
showing that it had taken all reasonable care and there was no negligence on its part. The new rule as
indicated by the Supreme Court are two:
If the enterprise is permitted to carry on a 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 (including the indemnification of all those who suffer harm in the accident)
arising on account of such hazardous or inherently dangerous activity as an appropriate item of
its over- heads:
The enterprise alone has the resource to discover and guard against hazards or danger and to
provide warning against potential hazards.
The rule in Rylands v. Fletcher,6 requires non- natural use of land by the defendant and escape from
his land of the thing, which causes damage. But, the rule in M.C. Mehta v. Union of India,7is not
dependent upon any such conditions. The necessary requirements for applicability of the new rule are
that the defendant is engaged in hazardous or inherently dangerous activity and that harm results to
anyone on account of an accident in operation of such hazardous or inherently dangerous activity.
The rule in Rylands (supra) will not cover cases of harm to persons within the premises where the
enterprise is carried on and the persons outside the premises for escape of the things causing harm
from the premises is not a necessary condition for the applicability of the rule. Further, the rule
though, strict in the sense that is not dependent on any negligence on the part of the defendant and in
this respect similar to the new rule, as it is subject to many exceptions but the rule in M.C. Mehtas
case is not only strict or absolute and is subject to no exception.
2 (1868) LR 3 HL 330
3 AIR 1987 SC 1086
4 AIR 1987 SC 1086
5 (1868) LR 3 HL 330
6 (1868) LR 3 HL 330
7 AIR 1987 SC 1086
3

Another important point of distinction between the two rules is in the matter of award of damages.
Damages awardable where the rule in Rylands, (supra) applies will be ordinary or compensatory; but
in the cases where the rule applicable is that laid down in M.C. Mehtas case, the court can allow
exemplary damages and the larger and more prosperous the enterprise, the greater must be the
amount of compensation payable by it. A small bump in the road was encountered in Charan Lal
Sahu v. Union of India,8 and doubts were expressed as to the quantum of damages payable. But the
Supreme Court set all doubts aside in another landmark decision, Indian Council for Envio- Legal
Action v. Union of India,9and it was held that the rule laid down in Mehtas case was not orbiter and
was appropriate and suited to the conditions prevailing in our country.

THE EVOLUTION OF THE RULE OF ABSOLUTE


LIABILITY
For long, commercial enterprises had managed to escape the tight noose of liability, there being no
comprehensive common law remedy to cases of mass disasters. Cases of environmental pollution
where industries took no care to ensure that there was no damage to the environment and hence
consequently, to the society. However, the Supreme Court finally managed to bell the cat when it
evolved a new principle of liability to deal with the cases where the industry being carried out was of
a hazardous and inherently dangerous nature. The new principle of law did not incorporate the
exceptions provided under the Rylands rule, nor was it necessary to establish the requirements of
non- natural use of land, the escape of thing, etc., which had rendered the rule of strict liability
useless in the modern era of rapid economic development.
The new rule coined by the then Chief Justice of India, P.N. Bhagwati of Absolute Liability, was
evolved in the celebrated case of M.C. Mehta v. Union of India. In that case, the Supreme Court was
dealing with claims arising from the leakage of oleum gas on 4 th and 6th December, 1985 from one of
the units of Shriram Foods and Fertilizers Industries, in the city of Delhi, belonging to Delhi Cloth
Mills Ltd. As a consequence of this leakage, it was alleged that one advocate practising in the Tis
Hazari Court had died and several others were affected by the same.
The action was brought into through writ petition under Art. 32 of the Constitution by way of Public
Interest Litigation (PIL). The Court had in mind that within the period of a year, this was the second
case of large- scale leakage of deadly gas in India, as a year earlier due to the leakage of MIC gas
from Union Carbide Plant in Bhopal more than 3000 people had died and lakhs of others were
subjected to various other kinds of diseases. If the rule of strict liability laid down in Rylands (Supra)
was applied such situations, then those who had established hazardous and inherently dangerous
industries in and around thickly populated areas could escape the liability for the havoc caused
8 AIR 1990 SC 1480
9 AIR 1996 SC 1446
4

thereby by pleading some exception to the rule in Rylands. For instance, when the escape of the
substance causing damage was due to act of a stranger, say due to sabotage, there was no liability
under the rule.
Shriram Industries contended in the series of actions brought against it:
1.
2.

That a writ should not issue as it was a public company and not a State.
That every breach of the conditions specified in the previous order should not warrant closure of
the plant.
3.
That the chlorine plant should be allowed to restart operations.
The Supreme Court ruled negatively on each of the above- mentioned issues. But the main question
before the court of law was how to affix liability. The Supreme Court took a bold decision holding
that it was not bound to follow the 19th Century rule of English law, and it could evolve a rule suitable
to the social and economic conditions prevailing in India at the present day. It evolved the rule of
Absolute Liability as a part of Indian Law in the preference to the rule of strict liability laid down in
Rylands (supra). It expressly declared that the new rule was not subject to any of the exceptions under
the rule in Rylands (supra).
After laying down the above mentioned rule, the court directed that the organisations that had filed
the petition may file actions in appropriate court within the period of 2 months to claim compensation
on behalf of the victim of the gas leak. C.J. Bhagwati observed in this context:
This rule evolved in the 19th Century at a time when all these developments of science and
technology had not taken place cannot afford any guidance in evolving any standard of liability
consistent with the constitutional norms and the needs of the present day economy and social
structure. We do not feel inhibited by this rule, which was evolved in the context of a totally different
kind of economy. 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 situation arises, the law
has to be evolved in order to meet the challenges of such new situations. Law cannot allow our
judicial thinking to be constrained by reference to the law as it prevails in England, or for that matter
in any other foreign legal order. We, in India, cannot hold our hands back and I venture to evolve a
new principle of liability which English Courts had not done.
The Supreme Court thus evolved a new rule creating absolute liability for the harm caused by the
dangerous substances were hitherto not there. The following statement of C. J. Bhagwati, which laid
down a new principle may be noted:
We, are of the view that an enterprise which is engaged in a hazardous or inherently dangerous
activity 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 activity which
it has undertaken. The enterprise must be held to be under an obligation to provide that the hazardous
or dangerous activity in which it has 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 harm occurred without any negligence on his part.
The rule was summed up in the following words, with the assertion that this rule will not be subjected
to any of the exceptions recognised under the rules in Rylands (supra).

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 s
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- a vis the tortious principle of
strict liability under the rule in Rylands (supra).
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 there from, and it should absorb such loss
as an item of overheads, and secondly, the enterprise alone has the resource to discover and guard
against such hazards and dangers.
It explained 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
on only one condition that the enterprise engaged in such activities indemnifies all those who suffers
on account of carrying on of such harmful or can say, dangerous substances 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 position was thus clarified:
We would also like to point out that the measure of compensation in the kind of cases referred to,
must be correlated to the magnitude and capacity of the compensation must have 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 of the hazardous or inherently dangerous activity by the enterprise.
The Supreme Court through its landmark judgement in the oleum gas leak case broke the shackles
that had been binding the Indian Jurisprudence for the past many years. It evolved a new [principle of
liability that was in tune with the modern, industrialized society of the day. It laid down a precedent
that was to become the foundation for many renowned judgements in the years to come. The
Supreme Court tightened the noose on erring industries and evolved the principle, which have laid
the foundation of environment protection in India.

REASONS BEHIND THE INAPPROPRIATION OF


THE OLD RULE IN INDIAN PERSPECTIVE
High Industrialisation Growth

The Indian economy is highly developing economy. The rule of Strict Liability is very old one. The
old rule evaluates when there was very low industrial development so the old rule cannot be found
appropriate in highly growing economy in India.
Agricultural Use of land
In India, the land is mostly used for agriculture. Therefore, it is appropriate to store the water in the
big tank for the purpose of irrigation. The same thing does not prevail in the country from which it is
decided. Therefore, it does not fit in Indian perspective.
Very Old Rule, Not Appropriate in Present World
The old rule was given in 19th Century, about more than 150 years ago, when the social and economic
condition was totally different. Therefore, it was necessary to make rule as per present requirement.

DIFFERENCE BETWEEN STRICT LIABILITY AND


ABSOLUTE LIABILITY
The difference between Strict and Absolute liability rules was laid down by the Supreme Court in
M.C. Mehta (Supra), where the court explains as:
Firstly, in Absolute liability, only those enterprises shall be held liable which are involved in
hazardous or inherently dangerous activities, this implies that other industries not falling in the above
ambit shall be covered under the rule of Strict Liability.
Secondly, the escape of a dangerous thing from ones own land is not necessary: it means that the rule
of absolute liability shall be applicable to those injured within the premise and outside the premise.
Thirdly, the rule of Absolute Liability does not have an exception, whereas some exceptions were
provided in the rule of Strict Liability. Also, in the case of Union of India v. Prabhakaran Vijay
Kumar,10 the view of constitutional bench was that the rule of M.C. Mehta is not subject to any type
of exception.
Fourthly, the rule of Rylands (supra) applies only to the non- natural use of land but the new rule of
absolute liability applies even to the natural use of land. If a person uses a harmful substance on his
land and if it escapes, he should be held liable even though he had taken proper care.
Further, the extent of damages depends upon the magnitude and financial capability of the institute.
Supreme Court also contended that, The enterprise must be held to be under an obligation to ensure
that the hazardous or inherently dangerous activities in which it is engaged must be conducted with
10 (2008) 9 SCC 527: (2008) 2 KLT 700
7

the highest standards of safety and security and if any harm result son account of such negligent
activity, the enterprise/ institute must be held absolutely liable to the enterprise to say that it had taken
all reasonable care and that the harm caused without any negligence on his part.

Bhopal gas Leak Disaster Case11


In May 1984, on the night of December 23 mass disaster, the worst in the recent times, was caused by
the leakage of Methyl Isocyanate and other toxic gases from the Union Carbide India Ltd. (UCIL) at
Bhopal. It is a subsidiary of Union Carbide Corporation (UCC), a multi- national company, registered
in USA. About 2660 people died instantaneously and lacs of people were seriously injured. However,
the toll of death had risen to 4000. Several suits were filed against the UCC in USA district court of
New York by the legal representatives of the deceased and many of the affected persons for damages.
The Union of India under the Bhopal Gas Leak Disaster (Processing of Claims Act), 1985 took upon
itself the right to sue for compensation on behalf of the affected parties and filed a suit for the same.
All the suits were consolidated and dismissed by Judge Keenan held that Indian Judiciary must have
the Opportunity to stand tall before the world and to pass judgement on behalf of its own people.
After the judgement of the Judge Keenan, the Government of India in the exercise of its power under
the Bhopal Gas Leak Disaster (Processing of Claims Act), 1985 filed a suit in the District Court of
Bhopal which awarded interim compensation for the amount of Rupees 350 crores. This amount, on
an appeal to Madhya Pradesh High Court preferred by UCC, was reduced to Rupees 250 Crores. This
order was challenged in Supreme Court.
While the suits were pending in the New York District Court, an offer of 350 million dollars had been
made by UCC for the settlement of the claim. This effort continued when the dispute arising out of
interim compensation ordered by the District Court of Bhopal came before the High Court.
However, the decision of the Madhya Pradesh High Court was challenged by both, UCC and the
Union of India. The Government of India assailed the reduction in the amount of interim
compensation and UCC contended that in a suit for damages where the basis of liability was
disputed, the Court had no power to make an award of interim compensation. It is in this case that the
matter was settled by two orders dated 14 th and 15th of February, 1989. On 14th February, 1989, the
Supreme Court recorded the settlement for claims reached between the parties in the suit for 470
million U.S. Dollars and as a consequence, all civil and criminal proceedings against UCC and UCIL
and their officers were terminated. On 15th February, 1989 the terms of settlement signed by learned
Attorney General for the Union of India and the counsel for the UCC was filed.
The settlement of the claims which was recorded by the Supreme Court was assailed mainly on two
grounds:
(a)

The criminal cases could neither have been compounded nor quashed nor could the immunity
have been granted against criminal action,
(b) The amount of compensation was very low.

11 (1989) 1 SCC 674: AIR 1992 SC 248.


8

As to the withdrawal of criminal cases, it was held that that the quashing and termination, if the
criminal proceedings brought about by orders dated 14 th and 15th of February required to be and are,
hereby reviewed and set aside.
As to the quantum of compensation it was argued that the principle laid down in M.C. Mehta v.
Union of India, should be adopted. It was held by the court that the settlement cannot be assailed as
violative of Mehta principle which might have arisen I strict adjudication. In the matter of
determination of compensation, also under the Bhopal Gas Leak Disaster (Processing Claims Act),
1985 and the scheme framed thereunder, there is no scope for applying the Mehta Principle in as
much as the tort- feasor, in term of the settlement for all practical purpose stand nationally
substituted by the settlement and which now represents and exhaust the liability of the alleged
hazardous entrepreneurs, viz., UCC & UCIL. We must all add that the Mehta principle can have no
application against Union of India in as much as requiring it to make good deficiency. If any, we do
not impute to it the position of a joint tort- feasor but only of a welfare state.

Indian Council for Environment Legal Action v. Union of


India12
The Supreme Court of India imposed the principle of M.C. Mehta case and held that once the
activity carried on is hazardous or inherently dangerous, the person carrying on such activity is liable
to make good the loss caused to any other person by his activity irrespective of the fact whether he
took reasonable care while carrying on his activity is by far the most appropriate and binding.

12 AIR 1996 SC 1446


9

CASE ANALYSIS
(STRICT LIABILITY)
M.P. ELECTRICITY BOARD

Appellant
Versus

SHAIL KUMARI AND ORS.

Respondents

Citation: 2002 (2) SCC 162


Coram: K.T. Thomas J. and S.N. Phukan J.
Cases Referred:

Kaushnuma Begum v. New India Assurance Co. Ltd., (2001) 2 SCC 9.


W.B. State Electricity Board v. Sachin Banerjee, (1999) 9 SCC 21.
Cambridge Water Co. Ltd. v. Eastern Countries Leather Plc., (1994) 1 All ER 53 (HL).
Charan Lal Sahu v. Gujarat SRTC v. Ramanbhai Prabhatbhai, (1987) 3 SCC 234.
M.C. Mehta v. Union of India, (1987) 1 SCC 395.
North- western Utilities Ltd. v. London Guarantee and Accident Co. Ltd., 1936 AC 108.
Quebec Rly., Light, Heat and Power Co. Ltd. v. Vandry, 1920AC 662.
Rylands v. Fletcher, (1868) 3 HL 330.

Cases Discussed:
Rylands v. Fletcher, (1868) 3 HL 330.
10

M.C. Mehta v. Union of India, (1987) 1 SCC 395.


North- western Utilities Ltd. v. London Guarantee and Accident Co. Ltd., 1936 AC 108.
Quebec Rly., Light, Heat and Power Co. Ltd. v. Vandry, 1920AC 662.

Cases Distinguished:
W.B. State Electricity Board v. Sachin Banerjee, (1999) 9 SCC 21.

Facts:
A live wire got snapped and fell on the public road which was partially inundated with rainwater. Not
noticing the wire, a cyclist, aged 37 years, while returning home at night from the factory where he
was employed, rode over the wire which twitched and snatched him and he was instantaneously
electrocuted. A claim of damages made by the dependants of the deceased was resisted by the
appellant State Electricity Board on the ground that the electrocution was due to the clandestine
pilferage committed by a stranger unauthorisedly siphoning the electric energy from the supply line.
The High Court directed the Court to pay as compensation, 4.34 lakhs to the claimants. Before the
Supreme Court, the appellant sought to rely on the exception to the rule of strict liability being an
act of stranger.

Held:
Even assuming that all safety measures had been adopted, a person undertaking an activity involving
hazardous or risky exposure to human life, is liable under law of torts to compensate for the injury
suffered by any other person, irrespective of any negligence or carelessness on the part of the
managers of such undertaking. The basis of such liability is the foreseeable risk inherent in the very
nature of such society. The liability cast on such person is known, in law, as strict liability. It differs
from the liability which arises on account of the negligence or fault in this way i.e. the concept of
negligence comprehends that the unforeseeable harm could be avoided by taking reasonable
precautions.
One of the seven exceptions to the doctrine of strict liability is: act of stranger i.e. if the escape was
caused by the unforeseeable act of the stranger, the rule does not apply. But that exception is not
available to the Board as the act attributed to the third respondent should reasonable have been
anticipated or at any rate its consequences should have been prevented by the appellant Board.
Appeal Dismissed.

11

CASE ANALYSIS
(Absolute Liability)
DEEPAK NITRITE LTD.

Appellant
Versus

STATE OF GUJARAT AND ORS.

....Respondents

Citation: (2004) 6 SCC 402


Coram: S. Rajendra Babu, C.J. and G.P. Mathur, J.
Cases referred:

Vellore Citizens Welfare Forum v. Union of India, (1996) 5 SCC 647.


Pravinbhai Jashbhai Patel v. State of Gujarat, (1995) 36 Guj LR 1210
Consumer Education and Research Centre v. Union of India, (1995) 3 SCC 42
Virender Gaur v. State of Haryana, (1995) 2 SCC 577
M.C. Mehta v. Union of India, (1987) 4 SCC 463
M.C. Mehta v. Union of India, (1987) 1 SCC 395

Cases discussed:
Pravinbhai Jashbhai Patel v. State of Gujarat, (1995) 36 Guj LR 1210
Cases distinguished:
Pravinbhai Jashbhai Patel v. State of Gujarat, (1995) 36 Guj LR 1210
12

Facts:

A petition was filed before the High Court in public interest alleging large- scale pollution caused by industries
located in Gujarat Industrial Development Corporation (GIDC) Industrial Estate at Nandesari. It is alleged that
effluents discharged by the said industries into the effluent- treatment project had exceeded certain parameters
fixed by the Gujarat Pollution Control Board (GPCB), thereby causing damage to the environment. On 9-5-1997,
the High Court passed an order directing the industries to pay 1% of the maximum annual turnover of any of the
preceding three years towards compensation and betterment of environment within a stipulated time. The appeal
was against this order.
Held:

The fact that the industrial units in question have not conformed with the standards prescribed by GPCB, cannot be
seriously disputed in these cases. But the question is whether the circumstance by itself can lead to the conclusion
that such lapse has caused damage to the environment. No finding is given on that aspect which is necessary to be
ascertained because compensation to be awarded must have some broad correlation not only with the magnitude
and the capacity of the enterprise but also with the harm caused by it. Maybe, in a given case, the percentage of the
turnover may be a proper measure because the method to be adopted in awarding damages on the basis of
polluter- to- pay principle has got to be practical, simple and easy in application. The appellants also do not
contest the legal position that if there is a finding that there has been degradation of environment or any damage
caused to any of the victims by the activities of the industrial units certainly damages have to be paid. However, to
say that mere violation of the law in not observing the norms would result in degradation of environment would
not be correct.

Therefore, the High Court is directed to further investigate in each of these cases and find out broadly whether
there has been any damage caused by any of the industrial units by their activities in not observing the norms
prescribed by GPCB as reported by the Modi Committee appointed by the High Court or by an expert body like
NEERI and that exercise need not be undertaken by the High Court as if the present proceeding is an action in tort
but an action in public law. A broad conclusion in this regard by the High Court would be sufficient. Therefore, the
High Court is directed to re-examine this aspect of the matter as to whether there is degradation of environment
and as a result thereof, any damage is caused to any victim, and what norms should be adopted in the matter of
awarding compensation in that regard. In this process, it is open to the High Court to consider whether 1% of the
turnover would be an appropriate formula or not as applicable to the present cases.

13

CONCLUSION

The rule of absolute liability has become a messiah for the society, in the sense that it is one rule that the society
can always think bank on for keeping establishments producing hazardous and inherently dangerous products at
hay. With the demise of the rule of strict- liability in the post- modern, industrialised era, the rule of absolute
liability provides an effective weapon to the Indian Courts to effectively combat environmental pollution.

The humane aspect of the application of the rule of course, stands out. The untold misery suffered by the people of
Delhi, Bhopal and many other cities and towns around the country; exemplified in the cases discussed above;
makes the existence of such a rule more important.

While the courts in America and England have not made any specific rule such as the one in India, they have
evolved their own existing principle of strict absolute liability to suit their needs. While the nomenclature I still a
bit dubious with the interchangeable use of the words strict and absolute. The rule has been able to cover a
very large extent, to help society safeguard environmental laws.

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