Absolute Liability

In one line

An enterprise that carries on a hazardous activity is liable for the harm an accident in it causes, with no exceptions and no excuse of care taken.

In the wording a student can write in an exam: the rule of absolute liability laid down in M.C. Mehta v. Union of India is that an enterprise engaged in a hazardous or inherently dangerous activity which poses a potential threat to the health and safety of 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, and if harm results it is absolutely liable to compensate all those affected, it being no answer that it took all reasonable care and that the harm occurred without negligence on its part; the liability is not subject to any of the exceptions to the rule in Rylands v. Fletcher, and the measure of compensation must be related to the magnitude and capacity of the enterprise so that it has a deterrent effect.

The case

Facts. M.C. Mehta v. Union of India, AIR 1987 SC 1086, decided on 20 December 1986. Oleum gas escaped from one of the units of Shriram Foods and Fertiliser Industries in a densely populated part of Delhi. Applications for compensation were made in a public interest petition already pending about the same plant. The Court had to decide the measure of liability of an enterprise carrying on a hazardous or inherently dangerous industry when an accident in it kills or injures people, and in particular whether the rule in Rylands v. Fletcher applied.

Held. The Court set out the rule in Rylands v. Fletcher, its requirement of a non-natural use and its exceptions, and then declined to apply it. A rule evolved in the nineteenth century, before these developments of science and technology, could not guide a modern economy; law has to grow to meet new situations; and Indian courts cannot allow their judicial thinking to be constricted by the law as it prevails in England or in any other foreign country, since India no longer needs the crutches of a foreign legal order. It then laid down four propositions.

One. An enterprise engaged in a hazardous or inherently dangerous activity owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone.

Two. The enterprise must conduct the activity with the highest standards of safety, and if any harm results it is absolutely liable to compensate, and it is no answer that it took all reasonable care and that the harm occurred without any negligence on its part.

Three. The liability is not subject to any of the exceptions which operate against the rule of strict liability in Rylands v. Fletcher.