The Oleum Gas Leak incident being similar in nature brought back the horrors of the Bhopal gas disaster, as a large number of people including both working people and the public were affected only after one year of the Bhopal gas tragedy and was closely monitored as an example as to how the courts should deal with companies accountable for environmental disasters. The complicated legal proceedings around the Bhopal Gas Tragedy is sadly an example of what should not be done in this situation. Oleum gas from Shriram Foods and Fertilizers which was a fertilizer plant leaked causing harm to numerous people. The Ryland v. Fletcher rule was applied in this case. J. Bhagwati stated that the above rule has been 100 years old and is not enough to decide cases such as these, as science has improved a lot in these years, which is why the Supreme Court went a little further and implemented the absolute liability rule.
Brief Facts of the case
In the centre of a population of 200,000 people in the area of Kirti Nagar, Shriram’s Food and Fertiliser factory, Delhi was situated, which produced products like hard technical oil and glycerin soaps. M.C. Mehta, a social activist lawyer, submitted before the Supreme Court a writ petition seeking an order for closure and relocation of the Shriram Caustic Chlorine and Sulphuric Acid Plant to an area where no real danger to the people’s health and security will exist. Pending disposal of the petition, the Supreme Court allowed the plant to restart its capacity and work. On 4 and 6 December 1985, Oleum gas leaked from one of its units during the pending lawsuit, causing substantial harm to local residents as a result of the plant’s gas leakage. As stated by the petitioner, a lawyer who practised in the Tis Hazari Courts also died as a result of oleum gas inhalation. As a result of the collapse of the structure on which it was built, the leakage resulted from the bursting of the tank containing oleum gas, and it generated fear among the citizens residing there. The people had hardly recovered from the shock of this tragedy when, within two days, another leakage occurred, though this time a minor one, due to the escape of oleum gas from a pipe’s joints, after which the claims for compensation were filed, for the people who had suffered damage as a result of Oleum Gas escape, by the Delhi Legal Aid & Advice Board and the Delhi Bar Association.
The oleum gas leak case led to various issues to come into the light, which was, Whether these harmful industries should be permitted to operate in these areas?
Whether a regulating mechanism should be established if they are permitted to function in such areas?
How should the liability and amount of compensation be determined in such cases?
How does Article 32 of the Constitution extend in these cases?
Whether the rule of Absolute Liability or Ryland v Fletcher is to be followed?
Whether ‘Shriram’ could be considered to be a ‘State’ within the ambit of Article 12?
Rule of Law
The Gas Leak case in Shriram was a very important case in environmental advocacy, as it dealt with Shri Ram Food and Fertilizers, one of India’s largest and richest manufacturing establishments against the Supreme Court, the representative of the people. The Supreme Court considered strict liability insufficient to protect citizens’ rights in a developed economy such as India thereby substituting it with the ‘absolute liability principle’. It set the Indian Supreme Court to be the protector of the environment and under Article 21, not only of the fundamental right to life but also of a pollution-free and safe life. There were many significant points of this case worth noticing. The court also performed the function of an extra-parliamentary body by insisting that the concept of absolute liability be used and thus set a precedent for future cases to come
Showing extreme concerns for the safety of the people of Delhi from the leakage of hazardous chemicals, J. Bhagwati stated the proposal to eliminate toxic and hazardous factories could not be followed because they still contribute to improving the quality of life. Industries must, therefore, be established even if they are harmful as they are necessary to economic and social development. He was of the view that the risk or danger factor towards the public can only be hoped to be reduced by taking all the measures required to position these industries in an environment where the public is least vulnerable and the safety requirements are maximized in such industries. It was also noted that permanent factory closure would result in the unemployment of 4,000 workers in the caustic soda factory and which would add to the social poverty problem. Consequently, the court ordered that the factory be opened temporarily under 11 conditions and appointed a committee of experts to control the activity of the industry. The court held that all exceptions to the rule set out in Rylands v. Fletcher are not applicable to hazardous industries. The Court adopted the principle of absolute responsibility. The exception available for this case was the act of a third party or natural calamity but the court interpreted that as the leakage was caused due to human and mechanical errors the possibility of an act of third party and natural calamity is out of scope and hence the principle of absolute liability is applicable here. An industry that engages in hazardous activities that pose a potential danger to the health and safety of those who work and live nearby is obliged to ensure that there is no harm to anybody. This industry must perform its operations with the highest safety requirements, and the industry must be completely responsible to compensate for any harm caused by them, as a part of the social cost for carrying such hazardous activities on its premises.
The decision had to be made in such a manner so as not to hinder the economic development of the country and also to ensure justice for the victims. Only a few months before the Environment (Protection) Act, 1986 came into force did this incident become a guiding force for the implementation of such an effective law. The case set a precedent for all the industries to establish more stringent safety measures. The gas leak case of Shriram was also noteworthy because it was the first time that a company had been held exclusively responsible for an incident and had to pay compensation irrespective of its claims in defence. The reasons for the decision have also been found not only on a legal basis but also on a scientific basis, which is why a special judicial function has been undertaken by the Supreme Court. The decision was made also in view of the importance of industrialization and the fact that it may eventually result in accidents.