M.C. Mehta v. Union of India

Facts

The petitioner sought closure of units of Shriram Foods and Fertiliser Industries, owned by Delhi Cloth Mills Limited, as hazardous to the community. While the petition was pending, oleum gas escaped from one of its units on 4 and 6 December 1985. The Delhi Legal Aid and Advice Board and the Delhi Bar Association applied for compensation for those harmed. A three judge Bench had permitted Shriram to restart certain plants subject to conditions, and later referred the compensation applications, which raised questions on Articles 21 and 32, to a five judge Bench. Shriram objected that no compensation claim had been made in the writ petition itself.

Questions before the Court

1. Whether the compensation applications could be entertained though the writ petition did not claim compensation, and what is the scope of the Court's power under Article 32, including to award compensation.
2. Whether a private corporation like Shriram, engaged in an industry vital to public interest and capable of affecting life and health, is 'State' under Article 12 and so bound by Article 21.
3. What is the measure of liability of an enterprise engaged in a hazardous or inherently dangerous industry when an accident causes death or injury.

What the Court held

• The compensation applications sought enforcement of Article 21 and could not be rejected on a hypertechnical objection. A letter to an individual Judge by or for a person in custody, a woman, a child or a deprived class should be entertained, and letters should not be rejected merely for lacking an affidavit.
• Article 32 is remedial as well as injunctive. The Court may award compensation in appropriate cases, where the infringement is gross and patent and either affects many persons or it would be unjust to send the victims to civil courts.
• The Court did not decide whether Shriram falls within Article 12, as it lacked time to consider the question in depth, and left it for later.
• An enterprise engaged in a hazardous or inherently dangerous activity owes an absolute and non-delegable duty to the community. If an accident such as escape of toxic gas causes harm, it is strictly and absolutely liable to compensate all those affected, without the exceptions to the rule in Rylands v. Fletcher.
• Compensation must be correlated to the magnitude and capacity of the enterprise so as to have a deterrent effect. The Delhi Legal Aid and Advice Board was directed to file compensation actions for the victims within two months.

Why it matters

The judgment lays down the principle of absolute liability for enterprises engaged in hazardous or inherently dangerous activities, departing from the rule in Rylands v. Fletcher and its exceptions, and holds that the measure of compensation should reflect the size and capacity of the enterprise. It also confirms that the Court may award compensation under Article 32 in appropriate cases and relaxes formal requirements for letter petitions. The Article 12 question was expressly left open.

In the Court's words

Copied from the official judgment; each passage links to its page.

Provisions interpreted

• Article 21, Constitution
• Article 32, Constitution
• Article 12, Constitution

Related judgments

• Follows Bandhua Mukti Morcha v. Union of India (1983)“we wholly endorse what has been stated by one of us namely, Bhagwati, J. as he then was in his judgment in that case in regard to the true scope and ambit of that Article.” (page 7)
• Followed in Indian Council for Enviro-Legal Action v. Union of India (1996)

Case and bench

Parties

M.C. Mehta v. Union of India

Case

Writ Petition (Civil) No. 12739 of 1985

Decided

20 December 1986

Bench

P.N. Bhagwati (CJ), Ranganath Misra, G.L. Oza, M.M. Dutt, K.N. Singh

Opinions

Unanimous. Judgment of the Court delivered by Bhagwati, C.J.

Questions on this case

10 questions in live Law Maker papers mention this case. A few from free papers:

1. Question 1 · Landmark Judgments Practice Set 1

   With reference to the rule laid down in M.C. Mehta v. Union of India (1986), the Oleum gas leak case, consider the following statements: 1. An enterprise engaged in a hazardous or inherently dangerous activity is absolutely liable to compensate all those affected by an accident in carrying on that activity. 2. The measure of compensation must be correlated to the magnitude and capacity of the enterprise. 3. The enterprise may escape liability by showing that the escape was due to an act of God or the act of a stranger. Which of the statements given above is/are correct?

   1. A. 2 and 3 only
   2. B. 1 only
   3. C. 1 and 2 only
   4. D. 1, 2 and 3
   Show the answer

   C. 1 and 2 only

   The Constitution Bench held that such an enterprise is strictly and absolutely liable and that the liability is not subject to any of the exceptions available under the rule in Rylands v. Fletcher, which rules out statement 3. It also held that compensation must be correlated to the magnitude and capacity of the enterprise so as to have a deterrent effect.

2. Question 2 · Law of Torts Practice Set 1

   In the Oleum Gas Leak case (M.C. Mehta v. Union of India, 1987), the Supreme Court said that compensation payable by an enterprise for harm caused by its hazardous activity must be correlated to:

   1. A. the amount of the enterprise's insurance cover
   2. B. the magnitude and capacity of the enterprise
   3. C. the actual pecuniary loss proved by each victim
   4. D. the market value of the enterprise's factory
   Show the answer

   B. the magnitude and capacity of the enterprise

   The Court held that the measure of compensation must be correlated to the magnitude and capacity of the enterprise so that it has a deterrent effect: the larger and more prosperous the enterprise, the greater the compensation.

3. Question 3 · Law of Torts Practice Set 1

   According to M.C. Mehta v. Union of India (Oleum Gas Leak case, AIR 1987 SC 1086), an enterprise engaged in a hazardous or inherently dangerous activity which causes harm by an accident is:

   1. A. strictly liable, but subject to all the exceptions recognised in Rylands v. Fletcher
   2. B. liable only if negligence in the operation of its plant is proved by the victims
   3. C. liable only where the hazardous activity is a non-natural use of the land it occupies
   4. D. absolutely liable, without any of the exceptions available under Rylands v. Fletcher
   Show the answer

   D. absolutely liable, without any of the exceptions available under Rylands v. Fletcher

   The Constitution Bench held that such an enterprise owes an absolute and non-delegable duty to the community and is 'strictly and absolutely liable', and that this liability 'is not subject to any of the exceptions' which operate under the rule in Rylands v. Fletcher.