INTRODUCTION

The principle of absolute liability has been derived from one of the most intriguing

chapters of the history of Indian jurisprudence. Its definition as laid down by the then

Chief Justice of India PN Bhagwati revolutionized the entire trend on environmental

protection laws in India. It commenced an entire new chapter in India’s environmental

law history, and brought about a level of maturity in the Indian judiciary never seen

before.

In this research project, the researcher has attempted to analyze the evolution of the

principle of absolute liability. The principle of absolute liability, though not codified, has

evolved through various case laws. In this research project the researcher takes an in-

depth look at the landmark cases that have established the absolute liability as it is today.

Chapter 1 – deals with the first of these landmark cases, the oleum gas leak case –which

led to the establishment of the rule of absolute liability.

Chapter 2 – deals with the case surrounding one of the biggest man-made disasters ever

witnessed in India, the Bhopal Gas Leak Tragedy.

Chapter 3 – comes back to the Bhopal Gas Leak Tragedy, and takes a look at the

controversy surrounding the settlement procedure for the victims of the disaster.

Chapter 4 – goes onto the last in the series of these cases – the Indian Council for

Enviro-Legal Action case – where Justice Jeevan Reddy laid down the famous polluter

pays principle as had already been embodied in International Law.

Chapter 5 – takes a peep into the position of absolute liability with respect to the United

States of America.

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Chapter 6 – gives a brief tour into the position of absolute liability with respect to

England, the country of the origin of the rule of strict liability.

The researcher has attempted to critically analyze the principle of absolute liability in the

post-modern context, esp. with the scepter of an eminent environmental crisis looming

large over our heads. What one has to remember is the when we talk of absolute liability;

we are not simply talking about the legal aspect of absolute liability. We are dealing with

a much larger canvass; a plethora of human emotions and suffering. The downside of this

rule is that it a principle effective only in disastrous circumstances.

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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

one’s property or an industry that produced substances or wastes detrimental to public

health. The pre-requirements 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 within the rule (and restated

by the Supreme Court of India in MC Mehta v. Union of India3) afford ample opportunity

to the commercial enterprises to escape liability.

The Supreme Court of India in MC Mehta v. Union of India4 evolved a more stringent

rule of strict liability than the 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 whether 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

1 (1868) LR 3 HL 3302 (1868) LR 3 HL 3303 AIR 1987 SC 10864 AIR 1987 SC 10865 (1868) LR 3 HL 330

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that it had taken all reasonable care and there was no negligence on its part. The basis of

the new rule as indicated by the Supreme Court are two:

If an enterprise is permitted to carry on an 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 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; and

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. Fletcher6 requires non-natural use of land by the defendant and

escape from his land of the thing, which causes damage. But the rule in MC Mehta v.

Union of India7 is not dependant 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

the operation of such hazardous or inherently dangerous activity.

The rule in Rylands v. Fletcher will not cover cases of harm to persons within the

premises for the rule requires escape of the thing, which causes harm from the premises.

The new rule makes no distinction between the persons within the premises where the

enterprise is carried on and persons outside the premises for escape of the thing causing

harm from the premises is not a necessary condition for the applicability of the rule.

Further, the rule in Rylands v. Fletcher, though strict in the sense that it is not dependant

on any negligence on the part of the defendant and in this respect similar to the new rule,

is not absolute as it is subject to many exceptions but the new rule in Mehta’s case is not

only strict but absolute and is subject to no exception.

6 (1868) LR 3 HL 3307 AIR 1987 SC 1086

4

Another important point of distinction between the two rules is in the matter of award of

damages. Damages awardable where the rule in Rylands v. Fletcher applies will be

ordinary or compensatory; but in cases where the rule applicable is that laid down in MC

Mehta’s 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 India8 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 Enviro-Legal Action v.

Union of India9 and it was held that the rule laid down in Mehta case was not obiter and

was appropriate and suited to the conditions prevailing in our country.

8 AIR 1990 SC 14809 AIR 1996 SC 1446

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THE EVOLUTION OF THE RULE OF

ABSOLUTE LIABILITY

THE OLEUM GAS LEAK CASE

INSTIGATION

(PROTESTS IN DELHI AGAINST THE CLOSURE OF THE SHRIRAM UNITS)

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 of India finally managed to “bell the cat” when it evolved a new

principle of liability to deal with 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 v. Fletcher10 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.

10 (1868) LR 3 HL 330

6

The new rule, coined by the then Chief Justice of India, PN Bhagwati, of “Absolute

Liability”, was evolved in the celebrated case of MC Mehta11 v. Union of India12. In

MC Mehta v. Union of India13, the Supreme Court was dealing with claims arising

from the leakage of oleum gas on 4th 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

practicing in the Tis Hazari Court had died and several others were affected by the

same.

The action was brought through a writ petition under article 32 of the Indian

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 the 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 v.

Fletcher14 was applied to 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 thereby by pleading some exception to the

rule in Rylands v. Fletcher15. For instance, when the escape of the substance causing

damage was due to the 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

11 MC Mehta, known to many as the green lawyer, is an apostle for fighting for the cause of environment protection. In fact his name has become synonymous with Public Interest Litigations (PILs) filed in the Supreme Court of India to maintain the sanctity of the environment and protect the society from the adverse consequences of the pollution being caused by the industries in many towns. He has also done commendable work for the protection of the Taj Mahal. His PIL file before the Supreme Court was extremely instrumental in the closure of the industries around the Taj, which were causing immense damage to the Taj. 12 AIR 1987 SC 108613 Ibid.14 (1868) LR 3 HL 33015 Ibid.

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1. That a writ should not issue as it was a public company and not a State.

2. 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 re-start operations.

The Supreme Court ruled negatively on each of the above-mentioned issues. But the

main question before the court 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 part

of Indian law in preference to the rule of strict liability laid down in Rylands v.

Fletcher16. It expressly declared that the new rule was not subject to any of the

exceptions under the rule in Rylands v. Fletcher17.

After laying down the above-mentioned rule, the court directed that the organizations

that had filed the petition may file actions in appropriate Court within a period of 2

months to claim compensation on behalf of the victim of the gas leak. CJ 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 no 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 situations arise, the law

has to be evolved in order to meet the challenge 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

16 (1868) LR 3 HL 33017 Ibid.

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our hands back and I venture to evolve a new principle of liability which English

Courts have not done.”

The Supreme Court thus evolved a new rule creating absolute liability for the harm

caused by dangerous substances as was hitherto not there. The following statement of

CJ Bhagwati, 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 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

inherently 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 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 exceptions recognized under the rule in Rylands v.

Fletcher18:

“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, 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 which operate vis-à-vis the tortious principle of strict

liability under the rule in Rylands v. Fletcher19.”

18 (1868) LR 3 HL 33019 (1868) LR 3 HL 330

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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 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 dangerous activity

indemnifies all 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 stated:

“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 enterprise

because such compensation must have a deterrent effect. The larger and more

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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.”

The Supreme Court through its landmark judgment 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 judgments in the years to come. The Supreme Court tightened the

noose on erring industries and evolved the principles, which have laid the foundation

of environment protection in India.

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THE BHOPAL GAS TRAGEDY CASE

PROLONGATION

The Bhopal Gas Disaster case (better known in legal circles as Union Carbide

Corporation v. Union of India20) occupies a special position in India’s jurisprudence,

perhaps not only because of the humane aspect of suffering and misery surrounding

the case, but also because of the controversy over the Bhopal Gas Disaster

(Processing of Claims) Act (1985) and the subsequent controversy regarding the

compensation payable to the victims and the admissibility (or rather the

inadmissibility) of the criminal suits. This case created a furor that not only rocked

India, but also left a ripple on the shores of America.

On the night of December 2nd and 3rd 1984, a mass disaster of the order never seen

before was caused by the leakage of Methyl Isocyanate (MIC) and other toxic gases

from a plant set up by Union Carbide India Ltd. (UCIL) for the manufacture of

20 AIR 1990 SC 273

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pesticides etc. in Bhopal. UCIL is a subsidiary of Union Carbide Corporation (UCC),

a multinational company registered in USA.

The disaster resulted in the deaths of at least 3000 persons and serious injuries to a

very large number of others (estimated to be over 6 lakhs) permanently affecting their

eyes, respiratory system and causing scores of other complications, including damage

to the fetus of pregnant women.

The peculiar problem regarding the claim of compensation was involved because of

such a large number of victims, most of those belonging to the lower economic strata.

On behalf of the victims, a large number of cases were filed in Bhopal, and also in

USA against the UCC. There was an effort for an out of court settlement between the

UCC and the Government of India. But that failed. The Government of India then

proclaimed an Ordinance, and thereafter passed The Bhopal Gas Leak Disaster

(Processing of Claims) Act, 1985. Section 3 of the Act confers exclusive right on the

central government to represent and act in place of every person who has made a

claim or is entitled to make a claim arising out of or connected with the Bhopal Gas

Leak Disaster. Empowered by section 9 of the Act the Government of India also

framed The Bhopal Gas Leak Disaster (Registration and Processing of Claims)

Scheme, 1985.

In pursuance of the power conferred on it u/s 3 the UOI filed a suit on behalf of all

the claimants against the UCC in the United States District Court of New York. All

the suits earlier filed in the USA by some American lawyers were superseded and

consolidated in this action. The UCC pleaded for the dismissal of the suit on the

grounds of forum non conveniens i.e. the suit can be more conveniently tried in India

as apart from many other factors, India was the place of catastrophe, and the plant

personnel, victims, witnesses, documentary and all related witnesses were located

there. The UOI contended that the Indian judiciary has yet to reach the maturity due

to the restraints placed upon it because of the British rule, and the Indian courts are

not up to the task of conducting the said litigation. Judge Keenan accepted the plea of

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forum non conveniens put forward by the UCC, rejected the plea of the Union of

India and dismissed the Indian action on that ground.

After the dismissal of the suit in USA, the UOI filed a suit in the District Court of

Bhopal. The District and Sessions Judge, MW Deo ordered the UCC to pay an

interim relief of Rs. 350 crore to the gas victims. On a civil revision petition file by

the UCC in the Madhya Pradesh High Court against the order of the Bhopal District

Court, MR. Justice SK Seth reduced the quantum of “interim compensation” payable

fro Rs. 350 crore to Rs. 250 crore.

On the one hand, the UCC was reported to have decided to go in appeal against the

decision requiring it to pay interim compensation, it has simultaneously devised a

new strategy of out maneuvering the Indian Government by a direct settlement with

the victims, through their lawyers in India and the USA. Against this move of direct

settlement on a prayer by the Union of India the District and Sessions Judge, Bhopal

Mr. MW Deo passed an interim order directing the UCC not to make any settlement

or compromise with any individual until further orders. There were also reports that

the UCC was trying to negotiate with the Govt. of India for an out of court settlement.

It was here, in the context of the legal position of the case, that the Supreme Court

decided to follow the principle in MC Mehta v. Union of India21 where the Supreme

Court had laid down the rule of ‘Absolute Liability’ in preference to the rule of strict

liability laid down in Rylands v. Fletcher22. The UCC, therefore, could not escape the

liability on the ground of sabotage, which it was trying to plead as a defense, which is

permitted under the rule in Rylands v. Fletcher23.

In view of the decision of the Supreme Court in the Mehta case, it was hoped that the

victims of the Bhopal Gas tragedy would be able to get relief, without much further

delay. The recognition of the principle of absolute liability in Mehta case and the

21 AIR 1987 SC 108622 (1868) LR 3 HL 33023 Ibid

14

grant of interim relief in the Bhopal case provided a faint glimmer of hope that the

Indian judiciary is mature and capable enough to meet out fair and equal justice.

After a long-drawn litigation battle of over 4 years, there was a settlement between

the Union of India and Union Carbon Carbide and in terms thereof, the Supreme

Court in Union Carbide Corporation v. Union of India24 passed an order on February

14 and 15, 1989 directing the payment of a sum of 470 million US $ or its equivalent

nearly 750 crore.

While making the order regarding the settlement, the Supreme Court took into

consideration the material relating to the earlier proceedings in the United States, the

claims and the counter-claims of the parties, and in particular the enormity of human

suffering and the pressing urgency to provide immediate and substantial relief to the

victims of the disaster.

The Supreme Court considered against the various aspects of its earlier decision, in

Union Carbide Corporation v. Union of India25. It was observed that the settlement

for payment of compensation of Rs. 750 crore by the Union Carbide Corporation

cannot be said to be void under the provisions of the Civil Procedure Code, on the

ground that the recording of the settlement was not preceded by a notice to the

persons interested in the suit. It was further observed that the quashing of criminal

proceedings along with the settlement did not amount to compounding of an offence,

and there was not stifling of the prosecution and hence the settlement was not void u/s

23 or 24 of the Indian Contract Act.

Keeping in mind the principle evolved in MC Mehta v. Union of India26, the Supreme

Court, however, took a contrary stand in asserting that the damages in this case could

not be awarded in proportion to the economic superiority of the guilty corporation.

24 AIR 1990 SC 27325 AIR 1992 SC 24826 AIR 1987 SC 1086

15

What stands out regarding the humane aspect surrounding this case is that despite the

provisions clearly set out by the Supreme Court, both the administration as well as the

judiciary have not been able to provide proper substantial relief, and compensation to

the Bhopal gas tragedy victims. It shows the rather pathetic state of disaster

management in our country. Moreover, what can be more shameful for a sovereign

nation to admit almost 40 years after its Independence than the fact that its judiciary

is not competent enough a crisis of this magnitude? The amount of damages made

available to the victims as also the time taken to distribute it amongst them has

proved the ineffectiveness of the Indian system to combat and effectively root out

such inherent deficiencies.

“It has to be born in mind that language of the Act does not militate against the

construction but on the contrary Sections 9 & 10 and the scheme of the Act suggests

that the Act contains such an obligation. If it is so read, then only meat can be put into

the skeleton of the Act making it meaningful and purposeful. It is common

knowledge that the victims were poor and impoverished. How could they survive in

the long ordeal of litigation and ultimate execution of the decree of the orders unless

provisions are made for their substance and maintenance, especially when they have

been denied of the right to fight for these claims themselves.”

The debate surrounding the decision given by the Supreme Court in this unusual case

still continues to be debated, and perhaps will always be. Although the Supreme

Court applied the principle laid down in the oleum gas leak case, it shied away from

awarding exemplary damages to the extent that it should have provided. This made

the Supreme Court subject to much criticism in the days following this judgment, and

the myth that the Indian judiciary had matured (following the Mehta judgment)

appeared to have been shattered. But in subsequent judgments delivered by the

Supreme Court on the principle of absolute liability, or on the same line of thought,

the Supreme Court reverted back to its original position.

16

The Bhopal gas tragedy case still remains an enigma for many. Was it an

achievement for a shocked society or was it reality-check for a wayward Judiciary?

This case really encapsulates the pulses running the Indian legal system, the unclear

distinctions; the perplexing judgments; and of course the plethora of human emotions.

What a heady cocktail!

17

THE BHOPAL GAS TRAGEDY CASE - II

IMPEDIMENT

The rapid progress of law was brought to a halt, briefly though, by the second of the

Bhopal gas cases. In Charan Lal Sahu v. Union of India27 (also known as Bhopal

case – II). There was wide resentment over the Bhopal Gas Disaster (Processing of

Claims) Act (1985) passed by the Govt. of India, which entitled it to represent the

victims of the Bhopal Gas Tragedy en masse. According to section 3 of the Act, the

Government of India was empowered to represent, and act in place of every person

who has made a claim, or is entitled to make, a claim arising out of, or connected

27 AIR 1990 SC 1480

18

with, the Bhopal gas leak disaster. All suits filed by the victims in America and India

were superseded and consolidated in the action filed by the Union of India.

According to the Act, all criminal proceedings initiated against the Union Carbide

Corporation were quashed and the Government of India, acting as parens patriae,

were allowed to take up the action on behalf of the victims. In this case, the petitioner

challenged the validity of the Bhopal Gas Disaster (Processing of Claims) Act (1985)

in the Supreme Court.

“BHOPAL GAS DISASTER (PROCESSING OF CLAIMS) ACT, 1985 - Sections 3

& 4--Constitution of India, Articles 14 & 226--Claim for compensation by the

victims--Act of 1985 held not unconstitutional--The act was conceived on the noble

promise of giving relief and succor to the dumb tale, meek and impoverished victims

of a tragic industrial gas leak disaster, a concomitant evil on this industrial age of

technological advancement and development. The implementation of the Act must be

with justice which has been done to the victims situated as they were, but it is also

true that justice had not appeared to have been done to the victims as they were but it

is also true that justice has not appeared to have been done and that is partly due to

the fact that the procedure was not equally followed and also partly because of the

atmosphere that was created in the country and attempts were made to shake the

confidence of the people in judicial process and also to undermine the credibility of

the Supreme Court.”

The Court ruled that the act was valid and that the State had rightly taken up the right

to represent the victims, as the majority of the victims were poor and illiterate.

Consequently, it was proper that the Court be allowed to file the suits on their behalf.

The Court also said that the Act dealt only with the question of civil liability and as

such does not curtail or affect the rights with respect to the criminal liability.

“This settlement shall finally dispose of all past, present and future claims, causes of

action and civil and criminal proceedings (of any nature whatsoever wherever

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pending) by all India Citizens and all public and private entities with respect to all

past, present and future deaths, personal injuries, health effects, compensation, losses,

damages and civil and criminal complaints of any nature whatsoever against UCC,

Union Carbide India Limited, Union Carbide Eastern, and all of their subsidiaries and

affiliates as well as each of their present and former directors, officers, employees,

agents representatives, attorneys, advocates and solicitors arising out of, relating to or

connected with the Bhopal Gas Leak Disaster, including past, present and future

claims, causes of action and proceedings against each other. All such claims and

causes of action whether within or outside India of Indian citizens, public or private

entities are hereby extinguished, including without limitation each of the claims filed

or to be filed under the Bhopal Gas Leak Disaster (Registration and Processing of

Claims) Scheme 1985, and all such civil proceedings in India arc hereby transferred

to this Court and are dismissed with prejudice, and all such criminal proceedings

including contempt proceedings stand quashed and accused deemed to be acquitted.”

It is important to note in this regard that the Supreme Court held that the

compensation awarded to the victims was justified. This stand taken by the Supreme

Court was contrary to the stand expressed by the same Court in the matter of MC

Mehta v. Union of India28 where it had been said that the damages payable would be

fixed in proportion to the economic capacity of the defendant corporation. On the

other hand, the Supreme Court had refused to adopt a similar line of thought in the

present case. The contention of the petitioner was that

Firstly, the Government was not entitled to represent the victims before the Court

and hence the settlement was illegal;

Secondly, the settlement was also not valid because the views of the victims had

not been taken before deciding on the final terms of the settlement.

With regard to the above-mentioned issues, the Supreme Court said that the

Government of India had not violated any law, and any right of the victims by

28 AIR 1987 SC 1086

20

representing them. It was said that in the background of the preamble to the

Constitution and the mandate of the Directive Principles of State Policy, it was

possible to authorize the Central Government to take over the claims of the victims of

the gas leak to fight against the multi-national corporation in respect of the claims.

This was based on the concept of the maxim salus populi suprema lex – regard for

public welfare is the highest law.

Regarding the views of victims as to the terms of the settlement, the Supreme said

that the purpose of the 1985 Act and principles of natural justice lead to the

interpretation of Section 4 of the Act, that in case of a proposed or contemplated

settlement, notice should be given to the victims or their legal dependants whose

rights are to be affected to ascertain their views. This, however, does not mean that

the consent of all the victims is required for the settlement. The Government of India,

acting as the representative of the victims can place the views of the victims before

the Court; in such a manner as it consider necessary before a settlement is entered

into. Further, it was stated by the Court that the victims had the right to approach the

court at any stage if, it was felt by the victims that their rights were being deprived of

in the action against Union Carbide Corporation.

This judgment is landmark not only for the fact that it underlined the diversion from

the rule set by the Supreme Court in the Mehta case, but also for the fact that it

brought into focus the rights of the victims with regard to the action filed by the

Government of India. It brought into focus the lethargy surrounding both the Indian

administration as well as the Indian legal system. The amount of damages payable to

the victims again brought back the same old question: what is the value of an Indian

life? Is the Indian life so insignificant that a paltry sum of Rs. 3 lakhs is all the

compensation that it deserves? These questions, which many thought, had been

settled finally by MC Mehta v. Union of India29 were again brought up by the victims

of the Bhopal Gas Tragedy through this case. And it would not be unfair to say that

both the Indian administration and the Indian legal system failed them, miserably.

29 AIR 1987 SC 1086

21

22

THE ‘POLLUTER PAYS’ CASE

CULMINATION

The principle of absolute liability had been primarily evolved in India for the purpose

of environment protection. Both the oleum gas leak case and the Bhopal gas tragedy

case reiterated this fundamental basis. Doubts were expressed as to the amount of

exemplary damages payable in such cases by Charan Lal v. Union of India30, but

these doubts were finally put to rest in Indian Council for Enviro-Legal Action v.

Union of India31. In this case the Supreme Court followed its earlier decision in MC

Mehta v. Union of India32, and imposed a liability on chemical industries carrying on

hazardous and inherently dangerous activities.

In the case at hand, the chemical industries operating in the village of Bichhri

(District Udaipur) and the surrounding areas were producing “H” acid (the

manufacture of which is banned in western countries), and oleum (the concrete form

of Sulphuric acid). The industry was producing such toxic compounds without a

permit, which caused serious harm to the surrounding environment. Also the

30 AIR 1990 SC 148031 AIR 1996 SC 144632 AIR 1987 SC 1086

23

wastewater products percolated into the ground and polluted the subterranean water

supply and caused many health related disorders to the villagers nearby, and some of

the villagers died because of the pollution in the water. From 1989-92, the Court

regularly issued notices to the Industry ordering it to control and store the sludge, but

they largely went unheeded. In 1994, the National Environment Engineering

Research Institute (NEERI) reported the pollution being caused by the industry and in

1996.

A writ petition concerning the above stated matter was file before the Supreme Court

under Art. 32 by way of social action litigation on behalf of the villagers affected by

the pollution resulting in invasion on their right to life, enshrined in Art. 21 of the

Constitution. The writ petition was directed against the Central and the State

Government and the State Pollution Control Board to compel them to perform their

statutory duty. It was held by the SC that the writ petition was maintainable as the

Supreme Court had power and duty to intervene and protect right to life of the

citizens.

The Supreme Court directed the Central Government to recover the costs of the

remedial measures from the private companies. The Central government was to

determine the amount required for carrying out the remedial measures including the

removal of sludge lying in and around the complex of the respondent companies.

The factories, plants, machinery, and all other immovable assets of the respondent

companies were ordered to be attached and the amount so determined and recovered

was ordered to be utilized by the Ministry of Environment and Forests, Government

of India (M.E.F.) for carrying out all remedial measures to restore soil, water sources

and the environment in general of the affected area to its former condition.

On account of their continuous, persistent, and insolent violations of law, the

respondent industries, were characterized by the SC as “rogue industries”, industries

which had heaped loads of untold miseries upon poor, unsuspecting villagers; which

24

had led to the spoiling of their lands, water sources, and the entire surrounding

environment. The Supreme Court also noted that it might be a good idea to establish

environmental courts so as to monitor such rogue industries and also so that the

environmental matters can get the constant and proper consideration they deserve.

In this case, the Supreme Court also explicitly recognized the principle of “polluter

pays”. There basically exist three principles that have been identified while dealing

with rogue industries.

The Precautionary Principle33

This principle elucidates the anticipation and prevention of environmental harm. Lack of

full scientific certainty, it holds, shall not be used as a reason for postponing measures to

prevent environmental degradation. It is better to err, in Justice Jagannadha Rao’s words,

on the side of caution than to allow environmental harm, which may become irreversible.

The Polluter Pays Principle

As its name implies, this principle demands that the financial costs of preventing or

remedying damage caused by pollution must be borne by the polluter. The connection of

this principle with science, its limitations or achievements, is rather unclear.

Principle Reversing the Burden of Proof

In environmental cases, this principle is generally taken to be an extension of the first, the

Precautionary Principle.

All the three principles were bodily lifted from international law, where they had only

recently been established courtesy the developed North, and read into the environmental

law of India by the Supreme Court in 1996. In two leading environmental cases decided

that year. Neither of them — the case at hand i.e. the Indian Council for Enviro-Legal

33 MANU/SC/0686/1996

25

Action case (Justice B.P. Jeevan Reddy) and the Vellore Citizens’ Welfare Forum case34

(Justice Kuldip Singh) — rationalized, or qualified, the principles in terms of the

“uncertainty of scientific proof and its changing frontiers from time to time” (Justice

Jagannadha Rao). The court was making law and making it openly, regardless of the

fallibility of human knowledge and the lack of specialization.

34 MANU/SC/0686/1996

26

ABSOLUTE LIABILITY – THE SECOND

DIMENSION

There is another important aspect from which we can analyze the absolute liability rule.

This particular facet of the rule was in evidence in the case of Klaus Mittelbachert v. East

India Hotels Ltd.35. In this case a German co-pilot, who stayed in New Delhi in Hotel

Oberoi Inter-Continental, five-star hotel, was badly injured when he dived in the hotel

swimming pool due to defective design of the swimming pool and insufficient amount of

water in it. The injuries resulted in his paralysis and ultimate death after 13 years of the

accident.

It was held that a five-star hotel charging high or fancy prices from its guests owes a high

duty of care to its guests. A latent defect in its structure or service attracts absolute

liability. The high price tag hanging on its service pack attracts and casts an obligation to

pay exemplary damages, if an occasion may arise for the purposes.

Thus we see that the application of the rule is not limited to environmental matters. It can

also be applied elsewhere when there is a danger to a person’s health and safety and the

defendant is totally at fault.

35 AIR 1997 Delhi 201

27

ABSOLUTE LIABILITY – THE AMERICAN

POSITION

In America the Rylands v. Fletcher36 position was adopted as soon as the case was

dealt with in England. The first American jurisdiction to apply the Rylands doctrine

was Massachusetts. Soon, the principle of strict liability as laid down in Rylands was

adopted in almost all the American jurisdictions, excluding Maine, New Hampshire,

New York, Oklahoma, Rhode Island, Texas, and, for all practical purposes,

Wyoming.37 The reason given for rejecting by these 7 states the rule of strict liability

was that a burden would be placed upon the development of industry and economy.

However, even in these jurisdictions, the doctrine was adopted though under a

different name such as nuisance or absolute nuisance.

However, it is interesting to note that the American Courts have always been prone to

use the terms strict liability and absolute liability rather interchangeably. The clear

line of distinction that was created by Chief Justice Bhagwati while evolving the rule

of absolute liability does not exist in the case of American jurisprudence. Both

Massachusetts and Minnesota while dealing with cases where the rule essentially to

be applied was strict liability, have used the term absolute liability in affixing liability

on people where the escape of thing due to the non-natural use of land caused

damage.

Many states have accepted the strict liability rule as a doctrine applicable principally

to cases where there is escape and consequential damage caused by water. However,

some states have made categorical exceptions and explanations to the rule, perhaps

because the imposition of liability without the proof of fault is a very harsh remedy.

36 (1868) LR 3 HL 33037 http://law.wustl.edu/journal/53/200_.pdf

28

One can witness a recurring theme in reported cases regarding the court’s acceptance

of the principle of absolute liability for activities involving heightened danger, but

emphatic rejection of the Rylands rule, which these courts described as the imposition

of liability only in cases which involved the failure of a water impoundment facility.

Thus, these courts have at the same time paradoxically accepted and rejected Rylands.

However, some basic changes were made to the application of the rule over a period

of time to incorporate the changing economic conditions. The changes were brought

out in the Restatement of Torts (First) and (Second)38. Accordingly, section 519 of the

Restatement (Second) states that:

(1) One who carries on an abnormally dangerous activity is subject to liability for

harm to the person, land or chattels of another resulting from the activity,

although he has exercised the utmost care to prevent the harm.

(2) This strict liability is limited to the kind of harm, the possibility of which

makes the activity abnormally dangerous.

Section 520 of the Restatement (Second) provides39:

In determining whether an activity is abnormally dangerous, the following factors

are to be considered:

(a) Existence of a high degree of risk of some harm to the person, land or chattels

of others;

(b) Likelihood that the harm that results from it will be great;

(c) Inability to eliminate the risk by the exercise of reasonable care;

(d) Extent to which the activity is not a matter of common usage;

(e) Inappropriateness of the activity to the place where it is carried on; and

38 http://law.wustl.edu/journal/53/200_.pdf39 ibid.

29

(f) Extent to which its value to the community is outweighed by its dangerous

attributes.

Thus, the American jurisprudence was moving from the original principle of

absolute or strict liability to a much more stringent rule, expanding the scope of

liability.

Many states went to the extent of codifying the principle of absolute liability.

Louisiana, with its unique approach towards law amongst other states can be said

to have most far-reaching codified liability scheme. Article 667 of the Louisiana

Civil Code40 establishes the statutory basis of the Rylands principle as:

“Although a proprietor may do with his estate whatever he pleases, still he can not

make any work on it, which may deprive his neighbor of the liberty of enjoying

his own, or which may be the cause of any damage to him.”

It is to be noted that while the Louisiana code does not explicitly establish

absolute liability, the Louisiana courts have interpreted it that way. The best-

known example of statutory absolute liability for property damages may be said to

be the clean-up provisions in the Comprehensive Environmental Response,

Compensation and Liability Act. Other examples include Utah’s Hazardous

Substances Mitigation Act, which establishes absolute liability for investigation

and the Wyoming Environmental Quality Act of 197341, which establishes

absolute liability for the discharge of pollution into state waters.

The American courts have largely followed a similar line of thought as the Indian

Courts and have brought environment pollution under the ambit of strict (or

absolute) liability. The disposals of hazardous wastes from industries, which are

aware of the hazardous and inherently dangerous nature of the industry, have been

held to be liable under the rule of strict or absolute liability. However, instead of

40 http://law.wustl.edu/journal/53/200_.pdf41 Ibid.

30

establishing a new head of torts like the Indian courts, the American legal

framework has decided to address the issue by evolving the principle established

by Rylands v. Fletcher42 itself, there being no clear distinction between the use of

the terms ‘absolute’ and ‘strict’ liability.

Therefore, we see that although the name remains the same, the principle has been

evolved from the principle affixing liability in the case of escape of water from a

reservoir to one that is the cornerstone for environment protection laws, in India

as well as in America. The general underlying principles remain the same – the

principles of “polluter pays”, rogue industries etc., principles that are so very

essential in maintaining the sanctity of the environment in post-modern

industrialized era.

42 (1868) LR 3 HL 330

31

ABSOLUTE LIABILITY – THE BRITISH

STAND

The position regarding the principle of absolute liability in England cannot be said to

be very distinct. There is no clear cut marking line between the principles of absolute

liability and strict liability. While absolute liability continues to be used as a

substitute for strict liability, the principles have been evolved by the British courts to

deal with the post-modern, industrialized era. It is also interesting to note that the

British courts have given the same definition to absolute liability, which had been

evolved for strict liability in Rylands v. Fletcher43. Apart from that, the principles

remain basically the same.

In a multitude of cases decided by the English Courts involving both the principles of

environmental pollution as well as strict/absolute liability, the distinction between the

two has become more and more blurred. In Empress Car Company (Abertillery) Ltd

v. National Rivers Authority44 was held that a company would be liable for the

leakage of diesel into a river, even though the leakage had been caused by a third

party. The facts of the case go like this: The company maintained a diesel tank in a

yard which was drained directly into the river. The tank was surrounded by a bund to

contain spillage, but the company had overridden this protection by fixing an

extension pipe to the outlet of the tank so as to connect it to a drum standing outside

the bund. It appears to have been more convenient to draw oil from the drum than

directly from the tank. The outlet from the tank was governed by a tap, which had no

lock. On 20 March 1995 the tap was opened by a person unknown and the entire

contents of the tank ran into the drum, overflowed into the yard and passed down the

drain into the river. The Crown Court found that there was a history of local

opposition to the company's business. The tap might have been turned on by a

malicious intruder, an aggrieved visitor or an upset local person.

43 (1868) LR 3 HL 33044 Manu/EG/00027/1998

32

The contention of the company was that the pollution was caused by an act of a

stranger and hence they could not be held liable. The House of Lords however

dismissed the appeal. Lord Hoffman, in his judgment, identifies two main cases from

which the principles to impose liability can be derived:

In Price v. Cromack45 [1975] 1 W.L.R. 988 the defendant maintained two lagoons on

his land into which, pursuant to an agreement, the owners of adjoining land

discharged effluent. The lagoons developed leaks, which allowed the effluent to

escape into the river. Lord Widgery C.J. said that the escape had not been caused by

anything, which the defendant had done. There was no "positive act" on his part. The

effluent came onto the land by gravity and found its way into the stream by gravity

"with no act on his part whatever"

The same principle was applied in the second of these cases. The second case is

Wychavon District Council v. National Rivers Authority46 [1993] 1 W.L.R. 125. The

council maintained the sewage system in its district as agent for the statutory

authority, the Severn Trent Water Authority. It operated, maintained and repaired the

sewers. As sewage authority, it received raw sewage into its sewers. On the occasion

in question one of the sewers became blocked. The sewage flowed into the storm

water drainage system and into the River Avon. The Divisional Court held that the

Council had not done any positive act, which caused the pollution. If it had known of

the blockage it might have been liable for "knowingly permitting" but it could not be

liable for causing.

However, the House of Lords thought otherwise. Applying the principle identified in

National Rivers Authority v. Yorkshire Water Services Ltd.47 [1995] 1 A.C. 444 the

House was invited to say that the law had "taken a wrong turning" in the requirement

of a "positive act" as formulated in Price v. Cromack and Wychavon District Council

45 [1975] 1 W.L.R. 98846 [1993] 1 W.L.R. 12547 [1995] 1 A.C. 444

33

v. National Rivers Authority. Lord Mackay of Clashfern L.C., said that he regarded

those cases as turning on their own facts but added that the word "cause" should be

used in its ordinary sense and that "it is not right as a matter of law to add further

requirements." In Attorney-General's Reference (No. 1 of 1994)48 [1995] 1 W.L.R.

599, it was said that the insistence in Price v. Cromack and Wychavon District

Council v. National Rivers Authority on a positive act as the immediate cause of the

escape was a "further requirement" which should not have been added. The only

question was whether something, which the defendant had done, whether

immediately or antecedently, had caused the pollution. The appeal filed by the

company to the House of Lords was not allowed. But what is more interesting to note

is principle identified in the judgment:

“While liability under section 85(1) is strict and therefore includes liability for

certain deliberate acts of third parties and (by parity of reasoning) natural events, it

is not an absolute liability in the sense that all that has to be shown is that the

polluting matter escaped from the defendant's land, irrespective of how this

happened. It must still be possible to say that the defendant caused the pollution.”

Thus, the House of Lords has held that corporations can be held “strictly” or

“absolutely” liable for causing pollution even if they are not at fault or even if the

pollution is caused due to the act of a third party/stranger or the Act of God. This is

an explicit departure from the original line where the rule was that under strict

liability, one could take the defense of Act of God, or the act of a stranger/third party.

48 [1995] 1 W.L.R. 599

34

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 bank on for keeping establishments producing

hazardous and inherently dangerous products at bay. With the demise of the rule of strict

liability in the post-modern, industrialized 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; as exemplified in the cases discussed above; makes the existence of such a rule

all the 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 is still a bit dubious with the interchangeable use of

the words “strict” and “absolute”; the rule has been able; to a very large extent; to help

society counter environmental pollution.

35

BIBLIOGRAPHY

BOOKS:

1. Bangia, R.K., Law Of Torts, 184-190, (Faridabad: Allahabad Law Agency, 2002)

2. RatanLal & DhirajLal, “Law of Torts”, (G. P. Singh, Nagpur: Wadhwa and

Company Law Publishers, 2002).

CASES ANALYSED:

1. MC Mehta v. Union of India AIR 1987 SC 1086

2. Union Carbide Corporation v. Union of India AIR 1990 SC 273

3. Charan Lal Sahu v. Union of India AIR 1990 SC 1480

4. Indian Council for Enviro-Legal Action v. Union of India AIR 1996 SC 1446

5. Empress Car Company (Abertillery) Ltd v. National Rivers Authority

Manu/EG/00027/1998

WEB-SITES:

1. www.westlaw.com

2. www.manupatra.com

3. www.google.com

4. www.altavista.com

5. www.law.wustl.edu/journal/53/200_.pdf

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