UNIVERSITY OF PETROLEUM &ENERGY STUDIES

COLLEGE OF LEGAL STUDIES

B.A. LLB (HONS.), CRIMINAL LAW BATCH-2

SEMESTER-1

ACADEMIC YEAR 2O18-2019

PROJECT

FOR

LEGAL METHODS

On the topic: MC MEHTA V. UNION OF INDIA

Under Supervision of: Prof. YASHA SHARMA

NAME-SIMANT PRIYADARSHI

SAP ID-500071320

ROLL NO-137
 TABLE OF CONTENTS

1.INTRODUCTION
2.FACTS OF THE CASE
3.ISSUE
4.JUDGEMENT
5.CONCLUSION
INTRODUCTION
Almost exactly a year after the Bhopal gas leak, there were two instances of oleum gas from a
unit of Shriram Foods and Fertilizer Industries (Shriram) in Delhi. A handful of people were
affected and one person even died as a result. Delhi’s citizens were understandably in a state
of panic. The District Magistrate of Delhi responded by passing an order telling Shriram to stop
manufacturing and processing toxic chemicals and gases. M.C. Mehta filed a writ petition in
the Supreme Court concerning the norms that should be used to determine the liability of
organizations engaged in manufacturing and selling hazardous materials. The first question
before the court, however, was whether Shriram’s caustic chlorine plant should have been
allowed to restart operations simply because it employed over 4000 people. A three-judge
bench permitted the plant to restart subject to eleven prescribed conditions. The other questions
raised involved issues of constitutional significance and were referred to a five-judge bench of
the court. Until M.C. Mehta v. Union of India, the English principle of strict liability laid down
in Rylands v. Fletcher was the law governing industrial accidents in India. According to this
principle, a person who introduces anything hazardous likely to harm people and property
should it escape to his land, must do so at his own peril. He would be prima facie answerable
for all damage caused by the natural consequences of such escape of hazardous material. Over
the years, this rule was diluted by several exceptions including a natural calamity, an act of
sabotage and consent of the plaintiff carved out by English courts. A five-judge bench of the
Supreme Court increased the threshold of tortious liability when it held that an enterprise
engaging in any harmful or inherently dangerous activity had an absolute and ‘non-delegable’
duty to ensure that no one was harmed, and if anyone was harmed, they were to be
compensated.38 In asserting this duty, the Supreme Court did not accept the exceptions which
had evolved in English jurisprudence. This ruling was significant in that the Supreme Court
coupled Indian seasoning with English principles to regulate an environment in which
industrial growth was not matched with necessary legal reform.
FACTS OF THE CASE
M.C. Mehta case is the famous tort law case which brought in the principle of absolute liability.
Shriram Food and Fertilizer Industry, a subsidiary of Delhi Cloth Mills Limited, was engaged
in the manufacture of dangerous chemical. On December 1985, large amounts of oleum gas
leaked form one of the units in the heart of Delhi which resulted in the death of several persons.
The leakage, resulted from the bursting of a tank containing oleum gas, was caused by
mechanical and human errors. It created a scare among the people residing nearby and within
two days, another leakage, a minor one, broke out as a result of oleum gas escaping from the
joints of pipe. On 6th December 1985, the District Magistrate, Delhi ordered Shriram to stop
the manufacturing and processing of hazardous chemicals and fertilizers at their establishment
in Delhi and to remove such chemicals and gases from Delhi. At this particular point, M.C.
Mehta moved to Supreme Court to file PIL and claim for compensation for the losses caused
and also demanded that the closed establishment should not restart.

ISSUE: -

Whether article 21 was available against Shriram and whether Shriram owned by Delhi cloth
Mill’s ltd. Public co. Comes within the meaning of state under the article 12?

JUDGEMENT: -
The Supreme Court held that Shriram is required to obtain a license under the Factories Act
and is subject to the directions and orders of the authorities under the Act. It is also required to
obtain a license for its manufacturing activities from the Municipal authorities under the Delhi
Municipal Act, 1957. It is subject to extensive environment regulation under the Water
(Prevention and Control of Pollution) Act, 1974 and as the factory is situated in an air pollution
control area, it is also subject to the regulation of the Air (Prevention and Control of Pollution)
Act, 1981. It is true that control is not exercised by the Government in relation to the internal
management policies of the company. Bhagwati thereafter stated that, “We in hold our hands
back and I venture to evolve a new principle of liability which English Courts have not done.
We have to develop our own law and if we find that it is necessary to construct a new principle
of liability to deal with an unusual situation which has arisen and which is likely to arise in
future on account of hazardous or inherently dangerous industries which are concomitant to an
industrial economy, there is no reason why we should hesitate to evolve such principle of
liability merely because it has not been so done in England. 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 nature of the
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 is 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. Since the persons harmed on account of the hazardous or
inherently dangerous activity carried on by the enterprise would not be in a position to isolate
the process of operation from the hazardous preparation of substance or any other related
element that caused the harm the enterprise must be held strictly liable for causing such harm
as a part of the social cost for carrying on the hazardous or inherently dangerous activity.

CONCLUSION: -
If the enterprise is permitted to carry on a 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. The Court also pointed 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 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.