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M.C. Mehta v. Union of India (1986): Oleum Gas and Absolute Liability

In the oleum gas leak case the Supreme Court held that hazardous enterprises are absolutely liable for harm from accidents, with no strict-liability exceptions and deterrent compensation.

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Quick answer

No. In M.C. Mehta v. Union of India (the oleum gas leak case, decided on 20 December 1986), a five-judge bench of the Supreme Court held that an enterprise carrying on a hazardous or inherently dangerous activity is absolutely liable to compensate everyone harmed by an accident in that activity. It cannot escape by proving that it took all reasonable care or was not negligent. Unlike the English rule of strict liability, this liability is not subject to any of the exceptions recognised in Rylands v. Fletcher.

The case

Case

M.C. Mehta v. Union of India, Writ Petition (Civil) No. 12739 of 1985, Supreme Court of India, 20 December 1986, reported as AIR 1987 SC 1086 and (1987) 1 SCC 395. Bench: P.N. Bhagwati, C.J., Ranganath Misra, G.L. Oza, M.M. Dutt and K.N. Singh, JJ. While a public interest petition under Article 32 seeking closure of the Shriram Foods and Fertilizers Industries units in Delhi was pending, oleum gas escaped from one of its units on 4 and 6 December 1985. Applications for compensation were referred to a larger bench, which laid down the rule of absolute liability.

The rule of absolute liability

  • An enterprise engaged in a hazardous or inherently dangerous industry owes an absolute and non-delegable duty (a duty it cannot pass on to anyone else) to the community, including workers and people living nearby.
  • It must carry on the activity with the highest standards of safety. If harm results, it must compensate, even if it took all reasonable care and the harm occurred without any negligence on its part.
  • The liability is not subject to the exceptions of strict liability, such as act of God, act of a stranger, the plaintiff's own default, consent and statutory authority.
  • Reasons: an enterprise permitted to carry on a dangerous activity for profit must absorb the cost of accidents as part of its overheads, and it alone has the resources to discover and guard against the hazards.
  • The measure of compensation must be related to the magnitude and capacity of the enterprise, so that it has a deterrent effect. The larger and richer the enterprise, the greater the compensation.

Strict liability and absolute liability compared

PointStrict liability (Rylands v. Fletcher)Absolute liability (M.C. Mehta)
Applies toEscape of a dangerous thing brought onto land for a non-natural useEnterprises carrying on hazardous or inherently dangerous activities
ExceptionsAct of God, act of a stranger, plaintiff's default, consent, statutory authorityNone
Defence of reasonable careNot a defenceNot a defence
CompensationCompensatoryLinked to the enterprise's size and capacity, with a deterrent effect

Example

Example

Zoya's company runs a highly hazardous chemical plant. During its operations toxic gas escapes, and Farhan and other residents nearby are injured. The company argues that its machinery was well maintained and that employees followed every safety procedure. Under the M.C. Mehta rule that is no answer. The enterprise must compensate those harmed, and the amount should reflect the company's size and capacity.

Points to note

  • The Court left open whether Shriram was "State" under Article 12. Instead of deciding compensation itself, it directed the Delhi Legal Aid and Advice Board to file compensation suits for the victims.
  • The rule is limited to hazardous or inherently dangerous activities. It does not convert every ordinary workplace accident into absolute liability.
  • The same no-fault idea now appears in statute: under Section 17(3) of the National Green Tribunal Act, 2010, the Tribunal "shall, in case of an accident, apply the principle of no fault" when deciding relief or compensation claims under Section 17.

For a wider explanation of the doctrine, see Concept of Absolute Liability.

Exam point

Exam point

M.C. Mehta v. Union of India (1986, oleum gas leak, five judges): a hazardous enterprise is absolutely liable for harm from accidents, with no Rylands v. Fletcher exceptions, and compensation is linked to its magnitude and capacity.

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Frequently asked questions

What is the rule of absolute liability laid down in M.C. Mehta v. Union of India?

An enterprise engaged in a hazardous or inherently dangerous activity owes an absolute and non-delegable duty to the community. If an accident in that activity causes harm, it must compensate everyone affected, even if it took all reasonable care and was not negligent.

How is absolute liability different from strict liability?

Strict liability under Rylands v. Fletcher allows exceptions such as act of God, act of a stranger, the plaintiff's default, consent and statutory authority. Absolute liability allows none of them, and compensation must be linked to the enterprise's magnitude and capacity so that it deters.

When was the oleum gas leak case decided?

The oleum gas escaped from a Shriram unit in Delhi on 4 and 6 December 1985. A five-judge bench led by P.N. Bhagwati, C.J. delivered the judgment on 20 December 1986; it is reported as AIR 1987 SC 1086.

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