Principle Of Absolute Lilability 551g21

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 indepth 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.

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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 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.

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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 age 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

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

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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 of such hazardous or inherently dangerous activity as an appropriate item of its over-heads; and

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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 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 7

(1868) LR 3 HL 330 AIR 1987 SC 1086

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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 9

AIR 1990 SC 1480 AIR 1996 SC 1446

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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

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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

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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.

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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 17

(1868) LR 3 HL 330 Ibid.

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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 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 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 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 19

(1868) LR 3 HL 330 (1868) LR 3 HL 330

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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 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 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

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prosperous the enterprise, greater must be the amount of compensation payable by it for the harm caused on 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.

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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 issibility (or rather the inissibility) 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

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AIR 1990 SC 273

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

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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 ed 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 (1868) LR 3 HL 330 23 Ibid 22

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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 thereof, the Supreme Court in Union Carbide Corporation v. Union of India24 ed 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.

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

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What stands out regarding the humane aspect surrounding this case is that despite the provisions clearly set out by the Supreme Court, both the istration 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 it 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.

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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!

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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) ed 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

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AIR 1990 SC 1480

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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

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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 s 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 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

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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 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 istration 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 istration and the Indian legal system failed them, miserably. 29

AIR 1987 SC 1086

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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 AIR 1996 SC 1446 32 AIR 1987 SC 1086 31

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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 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

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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

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Action case (Justice B.P. Jeevan Reddy) and the Vellore Citizens’ Welfare Forum case34 (Justice Kuldip Singh) — rationalized, or qualified, the principles in 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.

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MANU/SC/0686/1996

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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.

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AIR 1997 Delhi 201

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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 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 37

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

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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 39

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

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(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 bestknown 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 41

http://law.wustl.edu/journal/53/200_.pdf Ibid.

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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 ‘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

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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 ed 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 44

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

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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 ading 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 [1993] 1 W.L.R. 125 47 [1995] 1 A.C. 444 46

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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

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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.

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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

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