Absolute Liability: The Oleum Gas Leak, and Why India Made Its Own Rule

In one line

India's own rule of liability, made in twelve days after a gas leak in Delhi, with no escape requirement, no exceptions and damages measured by the size of the enterprise.

In exam wording: in M.C. Mehta v. Union of India, AIR 1987 SC 1086, the Constitution Bench held that an enterprise engaged in a hazardous or inherently dangerous industry owes an absolute and non-delegable duty to the community to ensure that no harm results, that if harm does result it is absolutely liable to compensate irrespective of all reasonable care having been taken and of the absence of negligence, that the rule in Rylands v Fletcher affords no guidance in a modern industrial society, and that the measure of compensation must be correlated to the magnitude and capacity of the enterprise.

The facts

The plant. Shriram Foods and Fertiliser Industries, a caustic chlorine and sulphuric acid complex in a densely populated part of Delhi.

The petition. M.C. Mehta had already moved the Supreme Court under Article 32 for the closure and relocation of the plant because it was hazardous to the community.

The leak. While the petition was pending, oleum gas escaped from the plant, affecting a number of persons in the locality. An advocate practising in the Tis Hazari courts died. A second escape followed days later.

The question that produced the rule. The Court had before it an application for compensation, and, in the words of the report, the question was: where an enterprise is engaged in a hazardous or inherently dangerous industry and harm results to anyone on account of an accident in the operation, what is the measure of liability, and does the rule in Rylands v Fletcher apply?

What the Court decided about Rylands v Fletcher

It set the English rule out accurately and then declined to be bound by it, and the reasoning is worth quoting in substance.

The rule as stated. A person who brings onto his land and collects and keeps there anything likely to do harm, which escapes and does damage to another, is liable to compensate. But it applies only to a non-natural user of the land, and it does not apply to things naturally on the land, or where the escape is due to an act of God, an act of a stranger, the default of the person injured, the consent of that person, or, in certain cases, statutory authority.

Why it could not serve. The rule evolved in the nineteenth century at a time when all these developments of science and technology had not taken place, and it 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.