Brief Details:

• Relevant Citation: 1987 AIR 1086
• Decided on: 20^th December, 1986
• Court: Supreme Court of India
• Judge Bench: Chief Justice P. N. Bhagwati, G. L. Misra Rangnath Oza, M. M. Dutt, K. N. Singh.

Facts of the Case:

Shri Ram Foods and Fertilizers Industries was located in a very densely populated area of Kirti Nagar, New Delhi. It produced products like glycerin soap, hard technical oil etc. On 4^th December, 1985, oleum gas leaked from Sulphuric Acid Plant, resulting in the death of a lawyer and affecting the health of several local residents. On 6^th December, 1985, there was another minor leakage. The District Magistrate issued an order under sub-section (1) of Section 133 of the Criminal Procedure Code, 1908[1]. The order directed Shri Ram Foods and Fertilizers Industries to close the unit and remove chemicals and gases from the premises within 7 days.

M.C. Mehta, a social activist lawyer, filed a public interest litigation (PIL) under Article 32[2]and Article 21[3]of the Indian Constitution seeking closure of Shri Ram Foods and Fertilizer Industries and relocating the plant at a place far away from the city.

Issue Raised:

1. Whether these hazardous plants should be allowed to operate or not?
2. Whether a regulating mechanism should be established if they are allowed to permit?
3. How should liability and amount compensation be determined in such cases?
4. How does Article 32 of the Indian Constitution extend in these cases?
5. Whether the rule of Absolute Liability or Ryland Fletcher is to be followed?
6. Whether “Shri Ram Foods and Fertilizers Industries” could be considered to be a “State” within the ambit of Article 12[4]?

Judgement:

Chief Justice P.N. Bhagwati was concerned about the safety of people of Delhi from the leakages of hazardous chemicals. He was of the view that such hazardous industries cannot be closed as they help to improve the quality of life of people. Such industries must be established as they help in economic and social development. He stated that in order to reduce the impact or risk of such hazardous substances on the community it is very important for these industries to take all necessary precautions and steps to ensure that such kind of incidents don’t happen again. The Supreme Court also noted that due to permanent closure of industries, a large number of people will get unemployed which would further result in poverty. As a result, the Supreme Court ordered the factory to temporarily open under 11 conditions and also appointed a committee of experts to control the activity of the industry.

The following are the conditions formulated by the government:

1. The Central Pollution Control Board will appoint an inspector to inspect and see that pollution standards set under Water Act and Air Act to be followed.
2. Worker’s Safety Committee to be constituted.
3. Industry to publish the effects of chlorine and its appropriate treatment.
4. To instruct and train the workers regarding plant safety through audio visual programmes, installing loudspeakers to alert the neighbours in case there is any gas leakage.
5. Safety device like masks, belts etc. to be used by the workers while working.
6. That workers of Shriram furnish an undertaking from the Chairman of Delhi Cloth Mills Limited that they will be “personally liable” for paying compensation in case there is any gas leakage from within the premises, resulting in death or injury of staff and people living nearby. 

The Court ordered the Shri Ram Industries to deposit Rs. 20 lakhs as a security for payment of compensation to the victims. The Court also directed to furnish a bank guarantee of Rs. 15 lakhs which shall be encashed by the Registrar of Supreme Court of India either wholly or partly, in case there is any event of gas leakage within three years from the date of order.  

Further the Supreme Court held that the industries cannot escape the liability by showing that they were not negligent in dealing with hazardous substances or they took all the necessary steps to deal with the situation. The Supreme Court applied the principle of absolute liability.

The Supreme Court observed that other than issuing directions under Article 32 it can also formulate new remedies and strategies to enforce fundamental rights. Article is not only confined to preventive measures when fundamental rights are violated but it also extends to remedial measures when the fundamental rights are violated[5]. Furthermore, it was held that the court has the power to offer remedial relief in cases where the fundamental right violation is gross and affects a large number of people or where affected people are poor and backward.

The court also examined whether the rule applied in Ryland vs Fletcher [6]would be applied in such cases. According to this rule, if a person brings, collects, keeps any hazardous thing and if such hazardous things escape from and causes damage to another person then that person would be held liable to compensate for the damage caused. It is referred to as Strict Liability. However, there are certain exceptions to this rule, if the hazardous things escape due to:

• An act of God.
• Act of Stranger.
• Default of the person injured.

The Supreme Court held that rule of Strict Liability cannot be applied in this case because the gas leakage was caused due to human and mechanical errors and not because of any natural calamity and hence the principle of absolute liability will be applicable here. According to this rule, an industry which is engaged in hazardous activities that pose a danger to the health and safety of the workers and people living nearby, is under the obligation to ensure that no harm is caused. The industry must perform its functions with highest safety requirements. The industry will be held responsible to compensate for any harm caused by them.

[1] https://indiankanoon.org/doc/983382/ (Last Visited on 6th August, 2021 at 11:15 AM)

[2] https://indiankanoon.org/doc/981147/ (Last Visited on 6th August, 2021 at 12:10 PM)

[3] https://indiankanoon.org/doc/1199182/ (Last Visited on 6th August, 2021 at 12:15 PM)

[4] https://indiankanoon.org/doc/609139/ (Last Visited on 6th August, 2021 at 12:49 PM)

[5] Bandhua Mukti Morcha vs Union of India, AIR 1984 SCC 802

[6] [1868] UKHL 1

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