BLS LLB 5 Years Sem 5 Torts 2025-26 - ATKT 75/25 Question Paper with Solutions

No fault liability is liability to pay compensation for death or injury arising out of the use of a motor vehicle without the claimant having to plead or prove any wrongful act, neglect or default on the part of the owner or driver.

Under the Motor Vehicles Act, 1988 as originally enacted it was provided by Section 140, with structured compensation under Section 163A. The Motor Vehicles (Amendment) Act, 2019 replaced both with a new Section 164, under which compensation of Rs. 5 lakh is payable in the case of death and Rs. 2.5 lakh in the case of grievous hurt, and the claimant shall not be required to plead or establish any wrongful act, neglect or default.

Section 2(11) of the Consumer Protection Act, 2019 defines "deficiency" as any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force, or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service, and includes:

1. any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and
2. deliberate withholding of relevant information by such person to the consumer.

Nervous shock is a recognisable psychiatric illness caused by the defendant's wrongful act without any direct physical impact on the plaintiff. What must be proved is a medically recognised condition, such as post-traumatic stress disorder or clinical depression; mere grief, sorrow, fright or distress is not enough.

It may be caused intentionally, as in Wilkinson v Downton (1897), or negligently, in which case the ordinary requirements of duty, breach and damage apply.

Section 2(5) of the Consumer Protection Act, 2019 defines "complainant" as meaning:

1. a consumer;
2. any voluntary consumer association registered under any law for the time being in force;
3. the Central Government or any State Government;
4. the Central Authority, that is the Central Consumer Protection Authority;
5. one or more consumers, where there are numerous consumers having the same interest;
6. in case of death of a consumer, his legal heir or legal representative; or
7. in case of a consumer being a minor, his parent or legal guardian,

who or which makes a complaint.

Constitution: Section 165 of the Motor Vehicles Act, 1988. A State Government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals for such area as may be specified, for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of or bodily injury to persons arising out of the use of motor vehicles, or damage to any property of a third party so arising, or both. A person is qualified for appointment only if he is or has been a Judge of a High Court, or is or has been a District Judge, or is qualified for appointment as a Judge of a High Court or as a District Judge.

Application: Section 166. May be made by the person injured, by the owner of the property, by all or any of the legal representatives of a deceased, or by a duly authorised agent; where some but not all of the legal representatives apply, the others must be impleaded as respondents. It may be filed where the accident occurred, or where the claimant resides or carries on business, or where the defendant resides. Section 166(3), as substituted in 2019, requires the application within six months of the accident, and Section 166(4) treats a police accident report under Section 159 as an application.

No fault liability. Section 164, substituted in 2019 for the former Sections 140 and 163A, gives Rs. 5 lakh for death and Rs. 2.5 lakh for grievous hurt, the claimant not being required to plead or establish any wrongful act, neglect or default. Section 161 provides hit and run compensation of Rs. 2 lakh and Rs. 50,000, and Section 164B creates a Motor Vehicle Accident Fund.

Bar of civil jurisdiction: Section 175. Where a Tribunal has been constituted, no civil court has jurisdiction over a claim it may adjudicate, and no injunction may be granted.

Appeal: Section 173. To the High Court within ninety days, except where the amount in dispute is less than Rs. 1 lakh; and where the appellant is the person required to pay, on deposit of Rs. 25,000 or fifty per cent of the award, whichever is less.

3. Re-entry on land. A person wrongfully dispossessed may re-enter peaceably. He may not use force amounting to a breach of the peace; if he cannot enter peaceably his remedy is a summary suit under Section 6 of the Specific Relief Act, 1963, brought within six months, in which possession is restored without any enquiry into title.

4. Recaption of goods. The owner of goods wrongfully taken may retake them from the wrongdoer, peaceably and without unnecessary force. He may enter the wrongdoer's land to do so, but the land of an innocent third party only after request and refusal.

5. Abatement of nuisance. The person injured may remove or end the nuisance himself, for example by cutting overhanging branches or removing an obstruction. The right is heavily hedged: notice must ordinarily be given before entering the wrongdoer's land, except in an emergency; no more damage may be done than is necessary; and where two methods are available, the less mischievous must be chosen.

The consequence of exceeding the right is severe: the person exercising it becomes a wrongdoer himself. Hamps v Darby [1948] 2 KB 311 is the illustration. A landowner whose drying grain was being eaten by a neighbour's racing pigeons shot four and wounded a fifth without first firing a scaring shot, and was held liable: a less drastic means was available and untried. He had perfectly good remedies in distress damage feasant and in a suit for damages, and by reaching for the most drastic he turned a trifling loss into a substantial liability. Bird v Holbrook (1828) makes the same point about self-defence: a spring gun set without notice is not private defence, and the trespasser it injured recovered.

Why the law tolerates self-help at all. Every item on the list deals with an ongoing state of affairs: a trespasser presently on the land, goods presently in the wrong hands, a nuisance presently continuing, an animal presently eating the crop. None of them yields compensation, because compensation is never urgent and can wait for a judgment. Where the wrong is complete and the remedy is money, the law insists on a court.

2. Unfair contracts: complaints against unfair contracts where the value of the consideration does not exceed Rs. 10 crore.
3. Appellate: appeals against the orders of any District Commission within the State.
4. Revisional: power to call for the records of and pass appropriate orders in any consumer dispute pending before or decided by a District Commission where it appears that it has exercised a jurisdiction not vested in it, failed to exercise one so vested, or acted illegally or with material irregularity.

Other powers. Section 48, power to transfer a complaint from one District Commission to another within the State; Section 49(2), power to declare a term of a contract null and void where it is found to be an unfair contract; Section 50, power to review its own order where there is an error apparent on the face of the record.

The Commission has the powers of a civil court in respect of summoning and enforcing attendance, examining witnesses on oath, discovery and production of documents, receiving evidence on affidavit, requisitioning test reports and issuing commissions, and its proceedings are judicial proceedings under Sections 193 and 228 of the Indian Penal Code.

Defamation is the publication of a statement which tends to lower a person in the estimation of right-thinking members of society generally, or to make them shun or avoid him, or to expose him to hatred, contempt or ridicule, without lawful justification. The interest protected is reputation, that is what others think of the plaintiff.

Defamation is classified in three ways: by the form of publication, by the manner in which the defamatory meaning is conveyed, and by whether the proceeding is civil or criminal.

A. By form: libel and slander.

Libel is defamation in a permanent form addressed to the eye: writing, print, a picture, a caricature, a photograph, a statue, an effigy, a film or a broadcast.

Slander is defamation in a transient form addressed to the ear: spoken words or a gesture.

B. By the manner of the meaning: direct and by innuendo.

Words may be defamatory on their face, requiring no explanation, or by innuendo, that is by a secondary meaning conveyed to persons who know extrinsic facts, which the plaintiff must plead and prove, together with publication to persons who knew them.

Cassidy v Daily Mirror Newspapers (1929): a photograph captioned as announcing a man's engagement defamed his actual wife. Tolley v J S Fry and Sons (1931): an amateur golfer in a chocolate advertisement was defamed in the eyes of those who knew the rules of amateur status.

Modern pleading distinguishes the true or legal innuendo, which depends on extrinsic facts, from the false or popular innuendo, which is merely the inference any ordinary reader would draw and is part of the ordinary meaning.

C. Civil and criminal defamation.

The governing principle. A master is vicariously liable for the fraud of his servant committed in the course of employment, and it makes no difference that the servant acted for his own benefit and not for the master's. That is the holding in Lloyd v Grace, Smith and Co [1912] AC 716, where a solicitor's managing clerk fraudulently induced a widow client to convey her cottages to himself and absconded with the proceeds; the firm was held liable, the House of Lords rejecting the earlier view that a master answers only for frauds from which he benefits.

If Sagar was acting in the course of his employment, the company is liable.

He would be, if receiving premiums in cash was part of his duties as a senior clerk, or if the company held him out as having authority to receive them, or if it knowingly permitted its clerks to collect premiums from policyholders. The reasoning is that of Lloyd v Grace, Smith: the employment created the opportunity for the fraud, and as between an innocent policyholder and the employer who put the man in that position, the loss falls on the employer.

2. the problem stresses that he was "also her neighbour", which suggests she dealt with him as a neighbour rather than as the company's officer; and
3. she took no receipt, being content with a promise to bring one the next day. A person paying an insurance premium to a company ordinarily receives a receipt at once, and the absence of one is evidence that the transaction was not one the company was conducting.

On that footing Sagar was on a frolic of his own: Storey v Ashton (1869), where a carman, his round finished, drove off on a private errand and the master was not liable; and Beard v London General Omnibus Co (1900), where the act was of a different kind from the one employed for.

Conclusion. The company is liable if Meera proves that receiving premiums was within Sagar's actual or ostensible authority. If she cannot, her remedy is against Sagar personally, in deceit and for conversion of the money, and by prosecution for criminal breach of trust under Section 405 of the Indian Penal Code and cheating under Section 415.

b) What remedy is available to Meera?

1. Against the insurance company, if vicarious liability is established.

• Conversion of the money, or the alternative restitutionary claim in quasi-contract for money had and received, by waiving the tort, which is worth doing because the measure is his gain; and
• criminal complaint for criminal breach of trust and cheating.

3. A complaint to the insurance regulator and the ombudsman.

• To the Insurance Regulatory and Development Authority of India under the IRDAI Act, 1999, since misappropriation of a premium by an official is a matter of regulatory concern and touches Section 64VB; and
• to the Insurance Ombudsman under the Insurance Ombudsman Rules, 2017, which is free, quick and expressly covers disputes about premium paid or payable and the repudiation or lapse of a policy.

4. Practical steps which decide such cases: produce any entry in a passbook or diary, any message or call record with Sagar, evidence that she had paid premiums to him before and that the company had accepted them, and evidence of the company's practice of allowing collection by staff. Each of those goes to ostensible authority, which is the issue on which the case turns.

The facts of the case. On 26 August 1928 Mrs May Donoghue went to the Wellmeadow Cafe in Paisley with a friend, who bought her a bottle of ginger beer. The bottle was of dark opaque glass and was sealed, so its contents could not be examined. She drank part of it, and when the remainder was poured into a glass the decomposed remains of a snail floated out. She suffered shock and severe gastro-enteritis and sued the manufacturer, with whom she had no contract at all.

Held, by a majority of three to two, that the manufacturer owed her a duty of care. Lord Atkin's neighbour principle:

"You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour", a neighbour being anyone "so closely and directly affected by my act that I ought reasonably to have them in contemplation".

The narrower rule, which applies here, has three limbs, and each is satisfied:

1. The product was sold in a form showing that the manufacturer intended it to reach the ultimate consumer in the form in which it left him. A sealed bottle of a cold drink is the paradigm.

• In tort, for negligence, on Donoghue v Stevenson.
• Under the Consumer Protection Act, 2019, for a defect in goods under Section 2(10). Riya is a consumer under Section 2(7); and note that even though her friend may have paid, she is a user with the approval of the buyer, which is the statutory answer to the privity problem.
• Under product liability, Chapter VI (Sections 82 to 87). Under Section 84 a product manufacturer is liable where the product contains a manufacturing defect, deviates from manufacturing specifications, or does not conform to an express warranty, and Section 84(2) makes him liable on an express warranty even if he proves he was not negligent or fraudulent. This is the strongest route where harm has been suffered, "harm" being defined in Section 2(22) to include illness and mental agony attendant on personal injury.
• Under the Food Safety and Standards Act, 2006: a bottled drink containing a dead insect is unsafe food within Section 3(1)(zz), with penalties under Sections 50 to 59, and a complaint lies to the Food Safety Officer.

2. The cafe owner.

• Contract, on the implied conditions in the Sale of Goods Act, 1930: Section 16(1), fitness for the particular purpose made known to the seller, and Section 16(2), merchantable quality. Note the proviso to Section 16(2): the implied condition does not extend to defects which an examination ought to have revealed, and a sealed opaque bottle reveals nothing, so the proviso does not help him.
• The Food Safety and Standards Act, 2006, under which a person who sells unsafe food is liable independently of the manufacturer.

3. Practically, Riya should join both in one complaint. They are, in respect of her injury, answerable on concurrent grounds, she may recover from whichever can pay, and the cafe's remedy is over against its supplier on the contract of sale.

1. Medical treatment is a "service" within the definition, now Section 2(42) of the Consumer Protection Act, 2019. The definition is inclusive and there is nothing in it to exclude medical practitioners.
2. It is not a "contract of personal service", which is the phrase the definition excludes. That phrase imports a master and servant relationship, and a doctor treating a patient is engaged under a contract for services, in which the patient controls what is done but not how.
3. Where a hospital renders service free of charge to everybody, the patient is not a consumer; where it charges, he is; where it charges some and treats others free, the patient treated free is a consumer as a beneficiary; and where the fee is paid by an insurer or employer, the patient is a consumer.
4. The existence of a statutory Council with disciplinary powers does not oust the consumer forum, because the Council can punish professional misconduct but cannot award compensation.

• The Indian case on these exact facts is Achutrao Haribhau Khodwa v State of Maharashtra (1996) 2 SCC 634, where a mop was left in the abdomen during a sterilisation operation, peritonitis followed and the patient died; the Supreme Court applied res ipsa loquitur, held the doctors negligent, and held the State vicariously liable, rejecting the plea of sovereign immunity.
• V Kishan Rao v Nikhil Super Speciality Hospital (2010) 5 SCC 513 holds that expert evidence is not required in every case, particularly where res ipsa loquitur applies.

The hospital is liable as well as the surgeon, vicariously for the negligence of the surgeons, anaesthetists, nurses and technicians it employs, and directly for any failure of its own systems, such as the absence of a swab count protocol.

b) Advise Mr. Khanna regarding the remedies available to him under law.

1. A complaint before the Consumer Commission.

• Where: under Section 34(2) before the District Commission where he resides or personally works for gain, or where the hospital carries on business, or where the cause of action arose.

3. A complaint to the State Medical Council under the National Medical Commission Act, 2019 and the professional conduct regulations, for professional misconduct. The Council may warn, suspend or remove the practitioner from the register, but it cannot award compensation, which is why this is a supplementary and not an alternative remedy.

4. Criminal proceedings under Section 304A of the Indian Penal Code for a rash or negligent act, though only in an extreme case: Jacob Mathew requires the negligence to be of a gross degree for criminal liability, and directs that an FIR against a doctor should ordinarily not be registered without an independent and competent medical opinion. On these facts, where the patient survived, this route is unlikely and unnecessary.

5. Practical steps. Obtain the complete medical records, which the hospital is bound to supply, the X-ray showing the retained gauze, the operation notes and swab count record of the first surgery, and the discharge summary and operation notes of the second. The swab count record is the single most important document, because its absence or falsity is decisive.

These are the facts of Rylands v Fletcher (1868) LR 3 HL 330 itself, with the names changed. The defendant, a mill owner, engaged independent contractors who were competent engineers to construct a reservoir on his land. In the course of the work they came upon disused mine shafts filled with earth, which they did not block properly. Neither they nor the defendant knew that these shafts communicated with the workings of the plaintiff's coal mine on adjoining land. When the reservoir was filled, water escaped down the shafts and flooded the mine. The defendant himself was guilty of no negligence. He was held liable.

Blackburn J stated the rule in the Court of Exchequer Chamber:

"We think that the true rule of law is that the person who for his own purposes brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape."

His own freedom from negligence is irrelevant. That is the whole point of strict liability. Liability attaches because he collected the dangerous thing for his own purposes, not because he did anything carelessly.

Employing competent independent contractors is no defence. This is the single most important feature of Rylands v Fletcher and the fact the examiner has planted. The general rule is that an employer is not liable for the torts of an independent contractor, but that rule does not apply to a liability which is strict and a duty which is non-delegable. Agarwal cannot escape by pointing to the engineers, though he has his own remedy over against them for their negligence.

Alternative grounds. The escape of water into an adjoining mine is also a private nuisance, being an unreasonable interference causing material physical injury to property, for which the character of the locality is no defence: St Helen's Smelting Co v Tipping (1865). And there is an independent claim in negligence against the contractors, who found the old shafts and did not properly check them.

Mr Birju's damages cover the flooding damage to the mine and the workings, and the consequential loss of the stoppage of his work, that is loss of production and profit for the period.

Added by Lord Cairns LC. The use must be special and attended with increased danger, and not the ordinary use of land or such use as is proper for the general benefit of the community. The test moves with social conditions: Rickards v Lothian (1913).

The five exceptions, any one of which defeats the claim:

1. Plaintiff's own default, and damage due to the abnormal sensitivity of his property: Ponting v Noakes (1894);
2. Act of God: Nichols v Marsland (1876);
3. Consent of the plaintiff, covering the common benefit cases: Carstairs v Taylor (1871);
4. Act of a third party, that is the unforeseeable act of a stranger over whom the defendant has no control: Box v Jubb (1879); and
5. Statutory authority: Green v Chelsea Waterworks Co (1894).

None of the five is available to Mr Agarwal. Birju did nothing; there was no natural catastrophe; he did not consent; the contractors were his own contractors and not strangers; and no statute authorised the reservoir.

Donoghue v Stevenson (1932) shows why the difference matters: the consumer of the ginger beer had no contract with the manufacturer and would have had no remedy at all on a contractual analysis; she succeeded in tort, because the duty was owed to persons generally.

They are not mutually exclusive. A surgeon who operates carelessly commits both; a carrier who damages goods commits both. The plaintiff may choose, and the choice matters for limitation, for remoteness, and for whether exemption clauses apply.

D. Tort and breach of trust.

The Consumer Protection Act, 2019 retains and restructures the three-tier machinery: the District Commission in each district, the State Commission in each State, and the National Commission, with a further appeal to the Supreme Court.

1. District Consumer Disputes Redressal Commission (Sections 28 to 41).

Establishment, Section 28. The State Government shall, by notification, establish a District Commission in each district, and may establish more than one in a district.

Composition, Section 29. A President and not less than two members as may be prescribed by the Central Government; the qualifications, method of recruitment, procedure of appointment, term of office, resignation and removal are prescribed under Section 30. Under the 1986 Act the President had to be qualified to be a District Judge, with two members, one of whom shall be a woman.

2. State Consumer Disputes Redressal Commission (Sections 42 to 52).

Establishment, Section 42, by the State Government. Composition: a President and not less than four or such higher number of members as prescribed in consultation with the Central Government. Under the 1986 Act the President had to be a Judge or former Judge of a High Court.

Jurisdiction, Section 47: original, above Rs. 50 lakh and up to Rs. 2 crore; unfair contracts, up to Rs. 10 crore; appellate, over the District Commissions in the State; revisional, where a District Commission has exercised a jurisdiction not vested in it, failed to exercise one so vested, or acted illegally or with material irregularity.

Section 48, transfer of a case within the State; Section 49(2), power to declare an unfair contract term void; Section 50, review.

Appeal, Section 51. To the National Commission within thirty days from an order in original jurisdiction, on deposit of fifty per cent; the proviso limits an appeal from an appellate order to a question of law.

3. National Consumer Disputes Redressal Commission (Sections 53 to 67).

• Grounds, Section 2(6): unfair contract, unfair or restrictive trade practice, defect in goods, deficiency in services, charging in excess, hazardous goods or services, and a product liability action.
• Reliefs, Section 39: removal of the defect, replacement, return of the price, compensation including punitive damages, removal of the deficiency, discontinuance of an unfair or restrictive trade practice, cessation of a misleading advertisement, withdrawal of hazardous goods, a corrective advertisement, payment to the Consumer Welfare Fund where the loss is suffered by a large number of consumers not readily identifiable, and costs.
• Mediation, Section 37 and Chapter V (Sections 74 to 81): reference with the parties' written consent; a recorded settlement is not appealable.
• Limitation, Section 69: two years, extendable for sufficient cause with reasons recorded.
• Enforcement, Section 71: enforceable as a decree of a civil court, with a certificate of recovery to the Collector for recovery as arrears of land revenue.
• Penalty, Section 72: imprisonment of one month to three years, or fine of Rs. 25,000 to Rs. 1 lakh, or both.

Held. Liable for the whole loss. Damage from the falling plank was foreseeable; destruction by fire was not. But the fire was the direct consequence, and that sufficed. Scrutton LJ: if the act would or might probably cause damage, the fact that the damage it in fact causes is not the exact kind one would expect is immaterial, so long as it is directly traceable.

Criticism. The rule was unjust to defendants, making liability turn on the accident of physical sequence rather than on anything the defendant could have contemplated.

C. The modern test: reasonable foreseeability. The Wagon Mound (1961).

Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd, The Wagon Mound (No. 1) [1961] AC 388 (PC), overruled Re Polemis.

Facts. The appellants' ship was taking on furnace oil in Sydney Harbour; through the carelessness of their servants oil was spilled and drifted about 200 yards to the respondents' wharf, where welding was in progress. Work was stopped and resumed on advice that furnace oil could not be ignited on water. Two days later molten metal fell on cotton waste floating on the oil, which acted as a wick, ignited the oil, and the wharf was destroyed.

Doughty v Turner Manufacturing Co [1964] 1 QB 518: an asbestos cover fell into molten liquid, producing a chemical eruption. Not liable: injury by splashing was foreseeable, injury by chemical reaction was a different kind.

F. The eggshell skull rule survives.

Once damage of a foreseeable kind is established, the defendant takes his victim as he finds him and answers for its full extent. Smith v Leech Brain and Co [1962] 2 QB 405, decided after Wagon Mound: a negligent burn on the lip caused a pre-malignant condition to become cancerous and the workman died; the employers were liable for the death. Dulieu v White and Sons (1901): it is no answer that the sufferer had an unusually thin skull or weak heart.

G. Intervening cause: novus actus interveniens.

A free, deliberate and informed act of a third party or of the plaintiff generally breaks the chain, but not where the defendant's duty was precisely to guard against that act: Stansbie v Troman (1948), the decorator who left the house unlocked and was liable for the theft; Home Office v Dorset Yacht Co (1970), the escaping borstal boys.

H. The Indian position.

Even where the plaintiff proves every ingredient of a tort, the defendant may escape liability by establishing a general defence, that is one available across the law of torts rather than peculiar to a single tort.

1. Volenti non fit injuria (consent). No injury is done to one who is willing. Where the plaintiff has freely and voluntarily, with full knowledge of the nature and extent of the risk, agreed to run it, no action lies.

Two elements: knowledge and consent, both required; mere knowledge will not do, so scienti non fit injuria is not the law. Smith v Baker (1891): a workman who knew stones were being swung over his head and worked on had not consented, a man under economic compulsion not being a volunteer. Hall v Brooklands Auto Racing Club (1933): a spectator at a motor race had accepted the risks inherent in the spectacle. Padmavati v Dugganaika (1975 ACJ 222).

4. Act of God (vis major). An operation of natural forces without human intervention, so extraordinary that no human foresight could reasonably anticipate it. Nichols v Marsland (1876) succeeded; Greenock Corporation v Caledonian Railway (1917) failed; Ramalinga Nadar v Narayana Reddiar (AIR 1971 Ker 197): the act of a mob is the act of man. Unlike inevitable accident, act of God is an exception to Rylands v Fletcher.

5. Private defence. Reasonable and proportionate force to protect one's own person or property, or another's. Setting a spring gun without notice is not private defence.

6. Mistake. As a rule mistake, of fact or of law, is no defence: a person who enters land honestly believing it his own is still a trespasser. The exceptions are torts in which the state of mind is an ingredient, notably malicious prosecution and deceit, and qualified privilege in defamation.

A partial defence: contributory negligence, which now reduces the damages in proportion to the plaintiff's share of responsibility rather than defeating the claim: the Law Reform (Contributory Negligence) Act, 1945, and in India Municipal Corporation of Greater Bombay v Laxman Iyer (2003) 8 SCC 731.

12. Necessity distinguished from the two defences it is confused with. Private defence answers a danger created by the plaintiff himself; necessity answers a danger created by neither party, and the person harmed is usually innocent; inevitable accident denies that the harm was intended or careless at all. The distinction decides which facts must be proved.

A. What absolute liability is.

Absolute liability is liability without fault and without exception: an enterprise carrying on a hazardous or inherently dangerous activity is liable to compensate everyone harmed by an accident in the operation of that activity, and none of the exceptions which qualify strict liability is available to it. It was laid down by the Supreme Court in M C Mehta v Union of India (1987) 1 SCC 395.

B. The rule it replaced.

Rylands v Fletcher (1868) LR 3 HL 330 established strict liability. Blackburn J: "the person who for his own purposes brings on his land and collects and keeps there anything likely to do mischief if it escapes must keep it in at his peril, and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape." Lord Cairns LC added the requirement of a non-natural use of land.

Held. Bhagwati CJ, delivering the judgment, held that the Court was not bound to follow the nineteenth century rule in Rylands v Fletcher, which had evolved in a different social and economic context in the England of the industrial revolution, and that Indian law must evolve new principles and lay down new norms adequate to the problems of a highly industrialised economy. He laid down:

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 activity, resulting for example in the escape of toxic gas, the enterprise is strictly and absolutely liable to compensate all those affected, and such liability is not subject to any of the exceptions which operate against the rule in Rylands v Fletcher.

The measure of compensation. It must be correlated to the magnitude and capacity of the enterprise, because it must have a deterrent effect: the larger and more prosperous the enterprise, the greater the amount payable.

D. The rationale: the reasons given and the reasons behind them.

6. Deterrence. This is why the Court tied the quantum to the capacity of the enterprise. A fixed sum would be a licence fee for a large company and a death sentence for a small one, and neither would deter; making the award proportionate to size gives every enterprise the same incentive to take precautions.

E. The three differences from strict liability.

F. The later development.