INTRODUCTION

The principle of absolute liability has been derived from one of the most intriguing
chapters of the history of Indian jurisprudence. Its definition as laid down by the then
Chief Justice of India PN Bhagwati revolutionized the entire trend on environmental
protection laws in India. It commenced an entire new chapter in India’s environmental
law history, and brought about a level of maturity in the Indian judiciary never seen
before.

In this research project, the researcher has attempted to analyze the evolution of the
principle of absolute liability. The principle of absolute liability, though not codified, has
evolved through various case laws. In this research project the researcher takes an in-
depth look at the landmark cases that have established the absolute liability as it is today.

Chapter 1 – deals with the first of these landmark cases, the oleum gas leak case –which
led to the establishment of the rule of absolute liability.

Chapter 2 – deals with the case surrounding one of the biggest man-made disasters ever
witnessed in India, the Bhopal Gas Leak Tragedy.

Chapter 3 – comes back to the Bhopal Gas Leak Tragedy, and takes a look at the
controversy surrounding the settlement procedure for the victims of the disaster.

Chapter 4 – goes onto the last in the series of these cases – the Indian Council for
Enviro-Legal Action case – where Justice Jeevan Reddy laid down the famous polluter
pays principle as had already been embodied in International Law.

Chapter 5 – takes a peep into the position of absolute liability with respect to the United
States of America.

1
Chapter 6 – gives a brief tour into the position of absolute liability with respect to
England, the country of the origin of the rule of strict liability.

The researcher has attempted to critically analyze the principle of absolute liability in the
post-modern context, esp. with the scepter of an eminent environmental crisis looming
large over our heads. What one has to remember is the when we talk of absolute liability;
we are not simply talking about the legal aspect of absolute liability. We are dealing with
a much larger canvass; a plethora of human emotions and suffering. The downside of this
rule is that it a principle effective only in disastrous circumstances.

2
 THE RULE OF ABSOLUTE LIABILITY

The rule of strict liability famously laid down by Blackburn J., in Rylands v. Fletcher1,
proved to be rather ineffective with the passage of time to counter the dangerous use of
one’s property or an industry that produced substances or wastes detrimental to public
health. The pre-requirements essential for establishing a liability under the principle of
strict liability viz., the non-natural use of land, use of a dangerous thing, and the element
of escape provided substantial loopholes to the enterprises to escape liability under the
Rylands v. Fletcher2 rule. Moreover, the exceptions provided within the rule (and restated
by the Supreme Court of India in MC Mehta v. Union of India3) afford ample opportunity
to the commercial enterprises to escape liability.

The Supreme Court of India in MC Mehta v. Union of India4 evolved a more stringent
rule of strict liability than the Rylands v. Fletcher5 rule. In this case, which involved the
leakage of and the harm caused by Oleum gas from one of the units of Shriram industries
in Delhi. The court held that keeping in mind the needs and demands of a modern society
with highly advanced scientific knowledge and technology where for the sake of
development program, it was necessary to carry out inherently dangerous or hazardous
industry, a new rule had to be laid down to adequately deal with the problems arising in a
highly industrialized economy. This new rule had to be based on the English rule of strict
liability, but had to be even more austere such that no firm carrying out an inherently
dangerous or hazardous activity might not escape from liability, irrespective of the fact
that whether there was any negligence involved or not.

The court also pointed out that the duty owed by such an enterprise to the society is
“absolute and non-delegable” and that the enterprise cannot escape liability by showing

1
(1868) LR 3 HL 330
2
(1868) LR 3 HL 330
3
AIR 1987 SC 1086
4
AIR 1987 SC 1086
5
(1868) LR 3 HL 330

3
that it had taken all reasonable care and there was no negligence on its part. The basis of
the new rule as indicated by the Supreme Court are two:

• If an enterprise is permitted to carry on an 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 (including indemnification of all
those who suffer harm in the accident) arising on account of such hazardous or
inherently dangerous activity as an appropriate item of its over-heads; and

• The enterprise alone has the resource to discover and guard against hazards or
danger and to provide warning against potential hazards.

The rule in Rylands v. Fletcher6 requires non-natural use of land by the defendant and
escape from his land of the thing, which causes damage. But the rule in MC Mehta v.
Union of India7 is not dependant upon any such conditions. The necessary requirements
for applicability of the new rule are that the defendant is engaged in hazardous or
inherently dangerous activity and that harm results to anyone on account of an accident in
the operation of such hazardous or inherently dangerous activity.

The rule in Rylands v. Fletcher will not cover cases of harm to persons within the
premises for the rule requires escape of the thing, which causes harm from the premises.
The new rule makes no distinction between the persons within the premises where the
enterprise is carried on and persons outside the premises for escape of the thing causing
harm from the premises is not a necessary condition for the applicability of the rule.
Further, the rule in Rylands v. Fletcher, though strict in the sense that it is not dependant
on any negligence on the part of the defendant and in this respect similar to the new rule,
is not absolute as it is subject to many exceptions but the new rule in Mehta’s case is not
only strict but absolute and is subject to no exception.

6
(1868) LR 3 HL 330
7
AIR 1987 SC 1086

4
 Another important point of distinction between the two rules is in the matter of award of
damages. Damages awardable where the rule in Rylands v. Fletcher applies will be
ordinary or compensatory; but in cases where the rule applicable is that laid down in MC
Mehta’s case the court can allow exemplary damages and the larger and more prosperous
the enterprise, the greater must be the amount of compensation payable by it. A small
bump in the road was encountered in Charan Lal Sahu v. Union of India8 and doubts
were expressed as to the quantum of damages payable. But the Supreme Court set all
doubts aside in another landmark decision, Indian Council for Enviro-Legal Action v.
Union of India9 and it was held that the rule laid down in Mehta case was not obiter and
was appropriate and suited to the conditions prevailing in our country.

8
AIR 1990 SC 1480
9
AIR 1996 SC 1446

5
 THE EVOLUTION OF THE RULE OF
ABSOLUTE LIABILITY

THE OLEUM GAS LEAK CASE

INSTIGATION

(PROTESTS IN DELHI AGAINST THE CLOSURE OF THE SHRIRAM UNITS)

For long commercial enterprises had managed to escape the tight noose of liability,
there being no comprehensive common law remedy to cases of mass disasters. Cases
of environmental pollution where industries took no care to ensure that there was no
damage to the environment and hence consequently, to the society. However, the
Supreme Court of India finally managed to “bell the cat” when it evolved a new
principle of liability to deal with cases where the industry being carried out was of a
hazardous and inherently dangerous nature. The new principle of law did not
incorporate the exceptions provided under the Rylands v. Fletcher10 rule, nor was it
necessary to establish the requirements of non-natural use of land, the ‘escape’ of
thing, etc., which had rendered the rule of strict liability useless in the modern era of
rapid economic development.
10
(1868) LR 3 HL 330

6
 The new rule, coined by the then Chief Justice of India, PN Bhagwati, of “Absolute
Liability”, was evolved in the celebrated case of MC Mehta11 v. Union of India12. In
MC Mehta v. Union of India13, the Supreme Court was dealing with claims arising
from the leakage of oleum gas on 4th and 6th December 1985 from one of the units of
Shriram Foods and Fertilizers Industries, in the city of Delhi, belonging to Delhi
Cloth Mills Ltd. As a consequence of this leakage, it was alleged that one advocate
practicing in the Tis Hazari Court had died and several others were affected by the
same.

The action was brought through a writ petition under article 32 of the Indian
Constitution by way of Public Interest Litigation (PIL). The Court had in mind that
within the period of a year, this was the second case of large-scale leakage of deadly
gas in India, as a year earlier due to the leakage of MIC gas from the Union Carbide
plant in Bhopal more than 3000 people had died and lakhs of others were subjected to
various other kinds of diseases. If the rule of strict liability laid down in Rylands v.
Fletcher14 was applied to such situations, then those who had established “hazardous
and inherently dangerous” industries in and around thickly populated areas could
escape the liability for the havoc caused thereby by pleading some exception to the
rule in Rylands v. Fletcher15. For instance, when the escape of the substance causing
damage was due to the act of a stranger, say due to sabotage, there was no liability
under the rule.

Shriram Industries contended in the series of actions brought against it

11
MC Mehta, known to many as the green lawyer, is an apostle for fighting for the cause of environment
protection. In fact his name has become synonymous with Public Interest Litigations (PILs) filed in the
Supreme Court of India to maintain the sanctity of the environment and protect the society from the adverse
consequences of the pollution being caused by the industries in many towns. He has also done
commendable work for the protection of the Taj Mahal. His PIL file before the Supreme Court was
extremely instrumental in the closure of the industries around the Taj, which were causing immense
damage to the Taj.
12
AIR 1987 SC 1086
13
Ibid.
14
(1868) LR 3 HL 330
15
Ibid.

7
 1. That a writ should not issue as it was a public company and not a State.
2. That every breach of the conditions specified in the previous Order should not
warrant closure of the plant.
3. That the Chlorine plant should be allowed to re-start operations.

The Supreme Court ruled negatively on each of the above-mentioned issues. But the
main question before the court was how to affix liability. The Supreme Court took a
bold decision holding that it was not bound to follow the 19th century rule of English
law, and it could evolve a rule suitable to the social and economic conditions
prevailing in India at the present day. It evolved the rule of Absolute Liability as part
of Indian law in preference to the rule of strict liability laid down in Rylands v.
Fletcher16. It expressly declared that the new rule was not subject to any of the
exceptions under the rule in Rylands v. Fletcher17.

After laying down the above-mentioned rule, the court directed that the organizations
that had filed the petition may file actions in appropriate Court within a period of 2
months to claim compensation on behalf of the victim of the gas leak. CJ Bhagwati
observed in this context:

“This rule evolved in the 19th century at a time when all these developments of
science and technology had not taken place 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. We do no feel inhibited by this rule, which
was evolved in the context of a totally different kind of economy. Law has to grow in
order to satisfy the needs of the fast changing society and keep abreast with the
economic developments taking place in this country. As new situations arise, the law
has to be evolved in order to meet the challenge of such new situations. Law cannot
allow our judicial thinking to be constrained by reference to the law as it prevails in
England, or for that matter in any other foreign legal order. We, in India, cannot hold

16
(1868) LR 3 HL 330
17
Ibid.

8
 our hands back and I venture to evolve a new principle of liability which English
Courts have not done.”

The Supreme Court thus evolved a new rule creating absolute liability for the harm
caused by dangerous substances as was hitherto not there. The following statement of
CJ Bhagwati, which laid down the new principle, may be noted:

“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 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 has 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.”

The rule was summed up in the following words, with the assertion that this rule will
not be subject to any of the exceptions recognized under the rule in Rylands v.
Fletcher18:

“We would therefore hold that 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 hazardous or inherently dangerous activity resulting, resulting
for example, in the escape of toxic gas the enterprise is strictly and absolutely liable
to compensate all those who are affected by the accident and such liability is not
subject to any of the exceptions which operate vis-à-vis the tortious principle of strict
liability under the rule in Rylands v. Fletcher19.”
18
(1868) LR 3 HL 330
19
(1868) LR 3 HL 330

9
The Court gave two reasons justifying the rule:

“Firstly, that the enterprise carrying on such hazardous and inherently dangerous
activity for private profit has a social obligation to compensate those suffering there
from, and it should absorb such loss as an item of overheads, and

Secondly, the enterprise alone has the resource to discover and guard against such
hazards and dangers.”

It explained the position in the following words:

“If the enterprise is permitted to carry on any 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.
This principle is also sustainable on the ground that the enterprise also has the
resource to discover and guard against hazards or dangers and to provide warning
against potential hazard.”

The Court also laid down that the measure of compensation payable should be
correlated to the magnitude and capacity of the enterprise, so that the same can have
the deterrent effect. The position was thus stated:

“We would also like to point 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

10
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.”

The Supreme Court through its landmark judgment in the oleum gas leak case broke
the shackles that had been binding the Indian jurisprudence for the past many years. It
evolved a new principle of liability that was in tune with the modern, industrialized
society of the day. It laid down a precedent that was to become the foundation for
many renowned judgments in the years to come. The Supreme Court tightened the
noose on erring industries and evolved the principles, which have laid the foundation
of environment protection in India.

11
 THE BHOPAL GAS TRAGEDY CASE
PROLONGATION

The Bhopal Gas Disaster case (better known in legal circles as Union Carbide
Corporation v. Union of India20) occupies a special position in India’s jurisprudence,
perhaps not only because of the humane aspect of suffering and misery surrounding
the case, but also because of the controversy over the Bhopal Gas Disaster
(Processing of Claims) Act (1985) and the subsequent controversy regarding the
compensation payable to the victims and the admissibility (or rather the
inadmissibility) of the criminal suits. This case created a furor that not only rocked
India, but also left a ripple on the shores of America.

On the night of December 2nd and 3rd 1984, a mass disaster of the order never seen
before was caused by the leakage of Methyl Isocyanate (MIC) and other toxic gases
from a plant set up by Union Carbide India Ltd. (UCIL) for the manufacture of

20
AIR 1990 SC 273

12
pesticides etc. in Bhopal. UCIL is a subsidiary of Union Carbide Corporation (UCC),
a multinational company registered in USA.

The disaster resulted in the deaths of at least 3000 persons and serious injuries to a
very large number of others (estimated to be over 6 lakhs) permanently affecting their
eyes, respiratory system and causing scores of other complications, including damage
to the fetus of pregnant women.

The peculiar problem regarding the claim of compensation was involved because of
such a large number of victims, most of those belonging to the lower economic strata.
On behalf of the victims, a large number of cases were filed in Bhopal, and also in
USA against the UCC. There was an effort for an out of court settlement between the
UCC and the Government of India. But that failed. The Government of India then
proclaimed an Ordinance, and thereafter passed The Bhopal Gas Leak Disaster
(Processing of Claims) Act, 1985. Section 3 of the Act confers exclusive right on the
central government to represent and act in place of every person who has made a
claim or is entitled to make a claim arising out of or connected with the Bhopal Gas
Leak Disaster. Empowered by section 9 of the Act the Government of India also
framed The Bhopal Gas Leak Disaster (Registration and Processing of Claims)
Scheme, 1985.

In pursuance of the power conferred on it u/s 3 the UOI filed a suit on behalf of all
the claimants against the UCC in the United States District Court of New York. All
the suits earlier filed in the USA by some American lawyers were superseded and
consolidated in this action. The UCC pleaded for the dismissal of the suit on the
grounds of forum non conveniens i.e. the suit can be more conveniently tried in India
as apart from many other factors, India was the place of catastrophe, and the plant
personnel, victims, witnesses, documentary and all related witnesses were located
there. The UOI contended that the Indian judiciary has yet to reach the maturity due
to the restraints placed upon it because of the British rule, and the Indian courts are
not up to the task of conducting the said litigation. Judge Keenan accepted the plea of

13
 forum non conveniens put forward by the UCC, rejected the plea of the Union of
India and dismissed the Indian action on that ground.

After the dismissal of the suit in USA, the UOI filed a suit in the District Court of
Bhopal. The District and Sessions Judge, MW Deo ordered the UCC to pay an
interim relief of Rs. 350 crore to the gas victims. On a civil revision petition file by
the UCC in the Madhya Pradesh High Court against the order of the Bhopal District
Court, MR. Justice SK Seth reduced the quantum of “interim compensation” payable
fro Rs. 350 crore to Rs. 250 crore.

On the one hand, the UCC was reported to have decided to go in appeal against the
decision requiring it to pay interim compensation, it has simultaneously devised a
new strategy of out maneuvering the Indian Government by a direct settlement with
the victims, through their lawyers in India and the USA. Against this move of direct
settlement on a prayer by the Union of India the District and Sessions Judge, Bhopal
Mr. MW Deo passed an interim order directing the UCC not to make any settlement
or compromise with any individual until further orders. There were also reports that
the UCC was trying to negotiate with the Govt. of India for an out of court settlement.

It was here, in the context of the legal position of the case, that the Supreme Court
decided to follow the principle in MC Mehta v. Union of India21 where the Supreme
Court had laid down the rule of ‘Absolute Liability’ in preference to the rule of strict
liability laid down in Rylands v. Fletcher22. The UCC, therefore, could not escape the
liability on the ground of sabotage, which it was trying to plead as a defense, which is
permitted under the rule in Rylands v. Fletcher23.

In view of the decision of the Supreme Court in the Mehta case, it was hoped that the
victims of the Bhopal Gas tragedy would be able to get relief, without much further
delay. The recognition of the principle of absolute liability in Mehta case and the

21
AIR 1987 SC 1086
22
(1868) LR 3 HL 330
23
Ibid

14
 grant of interim relief in the Bhopal case provided a faint glimmer of hope that the
Indian judiciary is mature and capable enough to meet out fair and equal justice.

After a long-drawn litigation battle of over 4 years, there was a settlement between
the Union of India and Union Carbon Carbide and in terms thereof, the Supreme
Court in Union Carbide Corporation v. Union of India24 passed an order on February
14 and 15, 1989 directing the payment of a sum of 470 million US $ or its equivalent
nearly 750 crore.

While making the order regarding the settlement, the Supreme Court took into
consideration the material relating to the earlier proceedings in the United States, the
claims and the counter-claims of the parties, and in particular the enormity of human
suffering and the pressing urgency to provide immediate and substantial relief to the
victims of the disaster.

The Supreme Court considered against the various aspects of its earlier decision, in
Union Carbide Corporation v. Union of India25. It was observed that the settlement
for payment of compensation of Rs. 750 crore by the Union Carbide Corporation
cannot be said to be void under the provisions of the Civil Procedure Code, on the
ground that the recording of the settlement was not preceded by a notice to the
persons interested in the suit. It was further observed that the quashing of criminal
proceedings along with the settlement did not amount to compounding of an offence,
and there was not stifling of the prosecution and hence the settlement was not void u/s
23 or 24 of the Indian Contract Act.

Keeping in mind the principle evolved in MC Mehta v. Union of India26, the Supreme
Court, however, took a contrary stand in asserting that the damages in this case could
not be awarded in proportion to the economic superiority of the guilty corporation.

24
AIR 1990 SC 273
25
AIR 1992 SC 248
26
AIR 1987 SC 1086

15
What stands out regarding the humane aspect surrounding this case is that despite the
provisions clearly set out by the Supreme Court, both the administration as well as the
judiciary have not been able to provide proper substantial relief, and compensation to
the Bhopal gas tragedy victims. It shows the rather pathetic state of disaster
management in our country. Moreover, what can be more shameful for a sovereign
nation to admit almost 40 years after its Independence than the fact that its judiciary
is not competent enough a crisis of this magnitude? The amount of damages made
available to the victims as also the time taken to distribute it amongst them has
proved the ineffectiveness of the Indian system to combat and effectively root out
such inherent deficiencies.

“It has to be born in mind that language of the Act does not militate against the
construction but on the contrary Sections 9 & 10 and the scheme of the Act suggests
that the Act contains such an obligation. If it is so read, then only meat can be put into
the skeleton of the Act making it meaningful and purposeful. It is common
knowledge that the victims were poor and impoverished. How could they survive in
the long ordeal of litigation and ultimate execution of the decree of the orders unless
provisions are made for their substance and maintenance, especially when they have
been denied of the right to fight for these claims themselves.”

The debate surrounding the decision given by the Supreme Court in this unusual case
still continues to be debated, and perhaps will always be. Although the Supreme
Court applied the principle laid down in the oleum gas leak case, it shied away from
awarding exemplary damages to the extent that it should have provided. This made
the Supreme Court subject to much criticism in the days following this judgment, and
the myth that the Indian judiciary had matured (following the Mehta judgment)
appeared to have been shattered. But in subsequent judgments delivered by the
Supreme Court on the principle of absolute liability, or on the same line of thought,
the Supreme Court reverted back to its original position.

16
The Bhopal gas tragedy case still remains an enigma for many. Was it an
achievement for a shocked society or was it reality-check for a wayward Judiciary?
This case really encapsulates the pulses running the Indian legal system, the unclear
distinctions; the perplexing judgments; and of course the plethora of human emotions.
What a heady cocktail!

17
 THE BHOPAL GAS TRAGEDY CASE -
II
IMPEDIMENT

The rapid progress of law was brought to a halt, briefly though, by the second of the
Bhopal gas cases. In Charan Lal Sahu v. Union of India27 (also known as Bhopal
case – II). There was wide resentment over the Bhopal Gas Disaster (Processing of
Claims) Act (1985) passed by the Govt. of India, which entitled it to represent the
victims of the Bhopal Gas Tragedy en masse. According to section 3 of the Act, the
Government of India was empowered to represent, and act in place of every person
who has made a claim, or is entitled to make, a claim arising out of, or connected

27
AIR 1990 SC 1480

18
with, the Bhopal gas leak disaster. All suits filed by the victims in America and India
were superseded and consolidated in the action filed by the Union of India.

According to the Act, all criminal proceedings initiated against the Union Carbide
Corporation were quashed and the Government of India, acting as parens patriae,
were allowed to take up the action on behalf of the victims. In this case, the petitioner
challenged the validity of the Bhopal Gas Disaster (Processing of Claims) Act (1985)
in the Supreme Court.

“BHOPAL GAS DISASTER (PROCESSING OF CLAIMS) ACT, 1985 - Sections 3

& 4--Constitution of India, Articles 14 & 226--Claim for compensation by the
victims--Act of 1985 held not unconstitutional--The act was conceived on the noble
promise of giving relief and succor to the dumb tale, meek and impoverished victims
of a tragic industrial gas leak disaster, a concomitant evil on this industrial age of
technological advancement and development. The implementation of the Act must be
with justice which has been done to the victims situated as they were, but it is also
true that justice had not appeared to have been done to the victims as they were but it
is also true that justice has not appeared to have been done and that is partly due to
the fact that the procedure was not equally followed and also partly because of the
atmosphere that was created in the country and attempts were made to shake the
confidence of the people in judicial process and also to undermine the credibility of
the Supreme Court.”

The Court ruled that the act was valid and that the State had rightly taken up the right
to represent the victims, as the majority of the victims were poor and illiterate.
Consequently, it was proper that the Court be allowed to file the suits on their behalf.
The Court also said that the Act dealt only with the question of civil liability and as
such does not curtail or affect the rights with respect to the criminal liability.

“This settlement shall finally dispose of all past, present and future claims, causes of
action and civil and criminal proceedings (of any nature whatsoever wherever

19
 pending) by all India Citizens and all public and private entities with respect to all
past, present and future deaths, personal injuries, health effects, compensation, losses,
damages and civil and criminal complaints of any nature whatsoever against UCC,
Union Carbide India Limited, Union Carbide Eastern, and all of their subsidiaries and
affiliates as well as each of their present and former directors, officers, employees,
agents representatives, attorneys, advocates and solicitors arising out of, relating to or
connected with the Bhopal Gas Leak Disaster, including past, present and future
claims, causes of action and proceedings against each other. All such claims and
causes of action whether within or outside India of Indian citizens, public or private
entities are hereby extinguished, including without limitation each of the claims filed
or to be filed under the Bhopal Gas Leak Disaster (Registration and Processing of
Claims) Scheme 1985, and all such civil proceedings in India arc hereby transferred
to this Court and are dismissed with prejudice, and all such criminal proceedings
including contempt proceedings stand quashed and accused deemed to be acquitted.”

It is important to note in this regard that the Supreme Court held that the
compensation awarded to the victims was justified. This stand taken by the Supreme
Court was contrary to the stand expressed by the same Court in the matter of MC
Mehta v. Union of India28 where it had been said that the damages payable would be
fixed in proportion to the economic capacity of the defendant corporation. On the
other hand, the Supreme Court had refused to adopt a similar line of thought in the
present case. The contention of the petitioner was that

 Firstly, the Government was not entitled to represent the victims before the Court
and hence the settlement was illegal;
 Secondly, the settlement was also not valid because the views of the victims had
not been taken before deciding on the final terms of the settlement.

With regard to the above-mentioned issues, the Supreme Court said that the
Government of India had not violated any law, and any right of the victims by

28
AIR 1987 SC 1086

20
 representing them. It was said that in the background of the preamble to the
Constitution and the mandate of the Directive Principles of State Policy, it was
possible to authorize the Central Government to take over the claims of the victims of
the gas leak to fight against the multi-national corporation in respect of the claims.
This was based on the concept of the maxim salus populi suprema lex – regard for
public welfare is the highest law.

Regarding the views of victims as to the terms of the settlement, the Supreme said
that the purpose of the 1985 Act and principles of natural justice lead to the
interpretation of Section 4 of the Act, that in case of a proposed or contemplated
settlement, notice should be given to the victims or their legal dependants whose
rights are to be affected to ascertain their views. This, however, does not mean that
the consent of all the victims is required for the settlement. The Government of India,
acting as the representative of the victims can place the views of the victims before
the Court; in such a manner as it consider necessary before a settlement is entered
into. Further, it was stated by the Court that the victims had the right to approach the
court at any stage if, it was felt by the victims that their rights were being deprived of
in the action against Union Carbide Corporation.

This judgment is landmark not only for the fact that it underlined the diversion from
the rule set by the Supreme Court in the Mehta case, but also for the fact that it
brought into focus the rights of the victims with regard to the action filed by the
Government of India. It brought into focus the lethargy surrounding both the Indian
administration as well as the Indian legal system. The amount of damages payable to
the victims again brought back the same old question: what is the value of an Indian
life? Is the Indian life so insignificant that a paltry sum of Rs. 3 lakhs is all the
compensation that it deserves? These questions, which many thought, had been
settled finally by MC Mehta v. Union of India29 were again brought up by the victims
of the Bhopal Gas Tragedy through this case. And it would not be unfair to say that
both the Indian administration and the Indian legal system failed them, miserably.

29
AIR 1987 SC 1086

21
22
 THE ‘POLLUTER PAYS’ CASE
CULMINATION

The principle of absolute liability had been primarily evolved in India for the purpose
of environment protection. Both the oleum gas leak case and the Bhopal gas tragedy
case reiterated this fundamental basis. Doubts were expressed as to the amount of
exemplary damages payable in such cases by Charan Lal v. Union of India30, but
these doubts were finally put to rest in Indian Council for Enviro-Legal Action v.
Union of India31. In this case the Supreme Court followed its earlier decision in MC
Mehta v. Union of India32, and imposed a liability on chemical industries carrying on
hazardous and inherently dangerous activities.

In the case at hand, the chemical industries operating in the village of Bichhri
(District Udaipur) and the surrounding areas were producing “H” acid (the
manufacture of which is banned in western countries), and oleum (the concrete form
of Sulphuric acid). The industry was producing such toxic compounds without a
permit, which caused serious harm to the surrounding environment. Also the

30
AIR 1990 SC 1480
31
AIR 1996 SC 1446
32
AIR 1987 SC 1086

23
wastewater products percolated into the ground and polluted the subterranean water
supply and caused many health related disorders to the villagers nearby, and some of
the villagers died because of the pollution in the water. From 1989-92, the Court
regularly issued notices to the Industry ordering it to control and store the sludge, but
they largely went unheeded. In 1994, the National Environment Engineering
Research Institute (NEERI) reported the pollution being caused by the industry and in
1996.

A writ petition concerning the above stated matter was file before the Supreme Court
under Art. 32 by way of social action litigation on behalf of the villagers affected by
the pollution resulting in invasion on their right to life, enshrined in Art. 21 of the
Constitution. The writ petition was directed against the Central and the State
Government and the State Pollution Control Board to compel them to perform their
statutory duty. It was held by the SC that the writ petition was maintainable as the
Supreme Court had power and duty to intervene and protect right to life of the
citizens.

The Supreme Court directed the Central Government to recover the costs of the
remedial measures from the private companies. The Central government was to
determine the amount required for carrying out the remedial measures including the
removal of sludge lying in and around the complex of the respondent companies.

The factories, plants, machinery, and all other immovable assets of the respondent
companies were ordered to be attached and the amount so determined and recovered
was ordered to be utilized by the Ministry of Environment and Forests, Government
of India (M.E.F.) for carrying out all remedial measures to restore soil, water sources
and the environment in general of the affected area to its former condition.

On account of their continuous, persistent, and insolent violations of law, the

respondent industries, were characterized by the SC as “rogue industries”, industries
which had heaped loads of untold miseries upon poor, unsuspecting villagers; which

24
 had led to the spoiling of their lands, water sources, and the entire surrounding
environment. The Supreme Court also noted that it might be a good idea to establish
environmental courts so as to monitor such rogue industries and also so that the
environmental matters can get the constant and proper consideration they deserve.

In this case, the Supreme Court also explicitly recognized the principle of “polluter
pays”. There basically exist three principles that have been identified while dealing
with rogue industries.

• The Precautionary Principle33

This principle elucidates the anticipation and prevention of environmental harm. Lack of
full scientific certainty, it holds, shall not be used as a reason for postponing measures to
prevent environmental degradation. It is better to err, in Justice Jagannadha Rao’s words,
on the side of caution than to allow environmental harm, which may become irreversible.

• The Polluter Pays Principle

As its name implies, this principle demands that the financial costs of preventing or
remedying damage caused by pollution must be borne by the polluter. The connection of
this principle with science, its limitations or achievements, is rather unclear.

• Principle Reversing the Burden of Proof

In environmental cases, this principle is generally taken to be an extension of the first, the
Precautionary Principle.

All the three principles were bodily lifted from international law, where they had only
recently been established courtesy the developed North, and read into the environmental
law of India by the Supreme Court in 1996. In two leading environmental cases decided
that year. Neither of them — the case at hand i.e. the Indian Council for Enviro-Legal

33
MANU/SC/0686/1996

25
Action case (Justice B.P. Jeevan Reddy) and the Vellore Citizens’ Welfare Forum case34
(Justice Kuldip Singh) — rationalized, or qualified, the principles in terms of the
“uncertainty of scientific proof and its changing frontiers from time to time” (Justice
Jagannadha Rao). The court was making law and making it openly, regardless of the
fallibility of human knowledge and the lack of specialization.

34
MANU/SC/0686/1996

26
 ABSOLUTE LIABILITY – THE SECOND
DIMENSION

There is another important aspect from which we can analyze the absolute liability rule.
This particular facet of the rule was in evidence in the case of Klaus Mittelbachert v. East
India Hotels Ltd.35. In this case a German co-pilot, who stayed in New Delhi in Hotel
Oberoi Inter-Continental, five-star hotel, was badly injured when he dived in the hotel
swimming pool due to defective design of the swimming pool and insufficient amount of
water in it. The injuries resulted in his paralysis and ultimate death after 13 years of the
accident.

It was held that a five-star hotel charging high or fancy prices from its guests owes a high
duty of care to its guests. A latent defect in its structure or service attracts absolute
liability. The high price tag hanging on its service pack attracts and casts an obligation to
pay exemplary damages, if an occasion may arise for the purposes.

Thus we see that the application of the rule is not limited to environmental matters. It can
also be applied elsewhere when there is a danger to a person’s health and safety and the
defendant is totally at fault.

35
AIR 1997 Delhi 201

27
 ABSOLUTE LIABILITY – THE AMERICAN
POSITION

In America the Rylands v. Fletcher36 position was adopted as soon as the case was
dealt with in England. The first American jurisdiction to apply the Rylands doctrine
was Massachusetts. Soon, the principle of strict liability as laid down in Rylands was
adopted in almost all the American jurisdictions, excluding Maine, New Hampshire,
New York, Oklahoma, Rhode Island, Texas, and, for all practical purposes,
Wyoming.37 The reason given for rejecting by these 7 states the rule of strict liability
was that a burden would be placed upon the development of industry and economy.
However, even in these jurisdictions, the doctrine was adopted though under a
different name such as nuisance or absolute nuisance.

However, it is interesting to note that the American Courts have always been prone to
use the terms strict liability and absolute liability rather interchangeably. The clear
line of distinction that was created by Chief Justice Bhagwati while evolving the rule
of absolute liability does not exist in the case of American jurisprudence. Both
Massachusetts and Minnesota while dealing with cases where the rule essentially to
be applied was strict liability, have used the term absolute liability in affixing liability
on people where the escape of thing due to the non-natural use of land caused
damage.

Many states have accepted the strict liability rule as a doctrine applicable principally
to cases where there is escape and consequential damage caused by water. However,
some states have made categorical exceptions and explanations to the rule, perhaps
because the imposition of liability without the proof of fault is a very harsh remedy.

36
(1868) LR 3 HL 330
37
http://law.wustl.edu/journal/53/200_.pdf

28
 One can witness a recurring theme in reported cases regarding the court’s acceptance
of the principle of absolute liability for activities involving heightened danger, but
emphatic rejection of the Rylands rule, which these courts described as the imposition
of liability only in cases which involved the failure of a water impoundment facility.
Thus, these courts have at the same time paradoxically accepted and rejected Rylands.

However, some basic changes were made to the application of the rule over a period
of time to incorporate the changing economic conditions. The changes were brought
out in the Restatement of Torts (First) and (Second)38. Accordingly, section 519 of the
Restatement (Second) states that:

(1) One who carries on an abnormally dangerous activity is subject to liability for
harm to the person, land or chattels of another resulting from the activity,
although he has exercised the utmost care to prevent the harm.

(2) This strict liability is limited to the kind of harm, the possibility of which
makes the activity abnormally dangerous.

Section 520 of the Restatement (Second) provides39:

In determining whether an activity is abnormally dangerous, the following factors

are to be considered:

(a) Existence of a high degree of risk of some harm to the person, land or chattels
of others;
(b) Likelihood that the harm that results from it will be great;
(c) Inability to eliminate the risk by the exercise of reasonable care;
(d) Extent to which the activity is not a matter of common usage;
(e) Inappropriateness of the activity to the place where it is carried on; and

38
http://law.wustl.edu/journal/53/200_.pdf
39
ibid.

29
 (f) Extent to which its value to the community is outweighed by its dangerous
attributes.

Thus, the American jurisprudence was moving from the original principle of
absolute or strict liability to a much more stringent rule, expanding the scope of
liability.

Many states went to the extent of codifying the principle of absolute liability.
Louisiana, with its unique approach towards law amongst other states can be said
to have most far-reaching codified liability scheme. Article 667 of the Louisiana
Civil Code40 establishes the statutory basis of the Rylands principle as:

“Although a proprietor may do with his estate whatever he pleases, still he can not
make any work on it, which may deprive his neighbor of the liberty of enjoying
his own, or which may be the cause of any damage to him.”

It is to be noted that while the Louisiana code does not explicitly establish
absolute liability, the Louisiana courts have interpreted it that way. The best-
known example of statutory absolute liability for property damages may be said to
be the clean-up provisions in the Comprehensive Environmental Response,
Compensation and Liability Act. Other examples include Utah’s Hazardous
Substances Mitigation Act, which establishes absolute liability for investigation
and the Wyoming Environmental Quality Act of 197341, which establishes
absolute liability for the discharge of pollution into state waters.

The American courts have largely followed a similar line of thought as the Indian
Courts and have brought environment pollution under the ambit of strict (or
absolute) liability. The disposals of hazardous wastes from industries, which are
aware of the hazardous and inherently dangerous nature of the industry, have been
held to be liable under the rule of strict or absolute liability. However, instead of
40
http://law.wustl.edu/journal/53/200_.pdf
41
Ibid.

30
 establishing a new head of torts like the Indian courts, the American legal
framework has decided to address the issue by evolving the principle established
by Rylands v. Fletcher42 itself, there being no clear distinction between the use of
the terms ‘absolute’ and ‘strict’ liability.

Therefore, we see that although the name remains the same, the principle has been
evolved from the principle affixing liability in the case of escape of water from a
reservoir to one that is the cornerstone for environment protection laws, in India
as well as in America. The general underlying principles remain the same – the
principles of “polluter pays”, rogue industries etc., principles that are so very
essential in maintaining the sanctity of the environment in post-modern
industrialized era.

42
(1868) LR 3 HL 330

31
 ABSOLUTE LIABILITY – THE BRITISH
STAND

The position regarding the principle of absolute liability in England cannot be said to
be very distinct. There is no clear cut marking line between the principles of absolute
liability and strict liability. While absolute liability continues to be used as a
substitute for strict liability, the principles have been evolved by the British courts to
deal with the post-modern, industrialized era. It is also interesting to note that the
British courts have given the same definition to absolute liability, which had been
evolved for strict liability in Rylands v. Fletcher43. Apart from that, the principles
remain basically the same.

In a multitude of cases decided by the English Courts involving both the principles of
environmental pollution as well as strict/absolute liability, the distinction between the
two has become more and more blurred. In Empress Car Company (Abertillery) Ltd
v. National Rivers Authority44 was held that a company would be liable for the
leakage of diesel into a river, even though the leakage had been caused by a third
party. The facts of the case go like this: The company maintained a diesel tank in a
yard which was drained directly into the river. The tank was surrounded by a bund to
contain spillage, but the company had overridden this protection by fixing an
extension pipe to the outlet of the tank so as to connect it to a drum standing outside
the bund. It appears to have been more convenient to draw oil from the drum than
directly from the tank. The outlet from the tank was governed by a tap, which had no
lock. On 20 March 1995 the tap was opened by a person unknown and the entire
contents of the tank ran into the drum, overflowed into the yard and passed down the
drain into the river. The Crown Court found that there was a history of local
opposition to the company's business. The tap might have been turned on by a
malicious intruder, an aggrieved visitor or an upset local person.

43
(1868) LR 3 HL 330
44
Manu/EG/00027/1998

32
 The contention of the company was that the pollution was caused by an act of a
stranger and hence they could not be held liable. The House of Lords however
dismissed the appeal. Lord Hoffman, in his judgment, identifies two main cases from
which the principles to impose liability can be derived:

In Price v. Cromack45 [1975] 1 W.L.R. 988 the defendant maintained two lagoons on
his land into which, pursuant to an agreement, the owners of adjoining land
discharged effluent. The lagoons developed leaks, which allowed the effluent to
escape into the river. Lord Widgery C.J. said that the escape had not been caused by
anything, which the defendant had done. There was no "positive act" on his part. The
effluent came onto the land by gravity and found its way into the stream by gravity
"with no act on his part whatever"

The same principle was applied in the second of these cases. The second case is
Wychavon District Council v. National Rivers Authority46 [1993] 1 W.L.R. 125. The
council maintained the sewage system in its district as agent for the statutory
authority, the Severn Trent Water Authority. It operated, maintained and repaired the
sewers. As sewage authority, it received raw sewage into its sewers. On the occasion
in question one of the sewers became blocked. The sewage flowed into the storm
water drainage system and into the River Avon. The Divisional Court held that the
Council had not done any positive act, which caused the pollution. If it had known of
the blockage it might have been liable for "knowingly permitting" but it could not be
liable for causing.

However, the House of Lords thought otherwise. Applying the principle identified in
National Rivers Authority v. Yorkshire Water Services Ltd.47 [1995] 1 A.C. 444 the
House was invited to say that the law had "taken a wrong turning" in the requirement
of a "positive act" as formulated in Price v. Cromack and Wychavon District Council

45
[1975] 1 W.L.R. 988
46
[1993] 1 W.L.R. 125
47
[1995] 1 A.C. 444

33
 v. National Rivers Authority. Lord Mackay of Clashfern L.C., said that he regarded
those cases as turning on their own facts but added that the word "cause" should be
used in its ordinary sense and that "it is not right as a matter of law to add further
requirements." In Attorney-General's Reference (No. 1 of 1994)48 [1995] 1 W.L.R.
599, it was said that the insistence in Price v. Cromack and Wychavon District
Council v. National Rivers Authority on a positive act as the immediate cause of the
escape was a "further requirement" which should not have been added. The only
question was whether something, which the defendant had done, whether
immediately or antecedently, had caused the pollution. The appeal filed by the
company to the House of Lords was not allowed. But what is more interesting to note
is principle identified in the judgment:

“While liability under section 85(1) is strict and therefore includes liability for
certain deliberate acts of third parties and (by parity of reasoning) natural events, it
is not an absolute liability in the sense that all that has to be shown is that the
polluting matter escaped from the defendant's land, irrespective of how this
happened. It must still be possible to say that the defendant caused the pollution.”

Thus, the House of Lords has held that corporations can be held “strictly” or
“absolutely” liable for causing pollution even if they are not at fault or even if the
pollution is caused due to the act of a third party/stranger or the Act of God. This is
an explicit departure from the original line where the rule was that under strict
liability, one could take the defense of Act of God, or the act of a stranger/third party.

48
[1995] 1 W.L.R. 599

34
 CONCLUSION

The rule of absolute liability has become a messiah for the society, in the sense that it is
one rule that the society can always bank on for keeping establishments producing
hazardous and inherently dangerous products at bay. With the demise of the rule of strict
liability in the post-modern, industrialized era, the rule of absolute liability provides an
effective weapon to the Indian Courts to effectively combat environmental pollution.

The humane aspect of the application of the rule of course, stands out. The untold misery
suffered by the people of Delhi, Bhopal, and many other cities and towns around the
country; as exemplified in the cases discussed above; makes the existence of such a rule
all the more important.

While the courts in America and England have not made any specific rule such as the one
in India, they have evolved their own existing principle of strict/absolute liability to suit
their needs. While the nomenclature is still a bit dubious with the interchangeable use of
the words “strict” and “absolute”; the rule has been able; to a very large extent; to help
society counter environmental pollution.

35
 BIBLIOGRAPHY

BOOKS:

1. Bangia, R.K., Law Of Torts, 184-190, (Faridabad: Allahabad Law Agency, 2002)

2. RatanLal & DhirajLal, “Law of Torts”, (G. P. Singh, Nagpur: Wadhwa and
Company Law Publishers, 2002).

CASES ANALYSED:

1. MC Mehta v. Union of India AIR 1987 SC 1086

2. Union Carbide Corporation v. Union of India AIR 1990 SC 273
3. Charan Lal Sahu v. Union of India AIR 1990 SC 1480
4. Indian Council for Enviro-Legal Action v. Union of India AIR 1996 SC 1446
5. Empress Car Company (Abertillery) Ltd v. National Rivers Authority
Manu/EG/00027/1998

WEB-SITES:

1. www.westlaw.com
2. www.manupatra.com
3. www.google.com
4. www.altavista.com
5. www.law.wustl.edu/journal/53/200_.pdf

36