M C Mehta v. UOI (Oleum gas leak)

Court: Supreme Court

Citation: 1987 SCR (1) 819, AIR 1987 965

Coram: Bhagwati, P.N. (Cj), Misra Rangnath, Oza, G.L., Dutt, M.M., Singh, K.N.

Facts:

The leakage of Oleum gas from a unit of Sriram Foods and Fertiliser Industries in December 1985 affected several people and caused one person to die in the heart of the city of Delhi. M.C.Mehta, a Supreme Court advocate, moved the Supreme Court to demand compensation for the damages incurred and pleaded that it should not be permitted to reopen the closed establishments. 

The petition presented a range of decisive questions concerning the true scope of Articles 21 and 32 of the Constitution, the laws and principles regulating the liability of large companies engaged in the manufacture and selling of hazardous goods, the basis on which harm should be quantified in the event of such liability, and whether such industries should be allowed to operate in densely populated areas.

The workers’ union also intervened and voiced itself emphatically against the permanent closure of the unit and argued that some 4000 workers would be thrown out of jobs if the plant were not permitted to operate. Similarly, the Shriram Unit called for the restart of the industry on the basis of the company’s economic loss and the chlorine shortage in the Delhi water supply sector.

Issues:

Whether such hazardous industries to be allowed to operate in such areas.

If they are allowed to work in such areas, whether any regulating mechanism to be evolved.

Decision:

In view of the complicated issue, the Supreme Court acknowledged that it was a challenging situation as to how the balance should be tipped because, according to the Court, either way could have significant repercussions and, with some reluctance, the court decided that, subject to a long list of conditions, caustic chlorine plants should be allowed to restart.

However, by means of compensation claims brought by the Oleum gas victims, the Court directed the management to deposit a amount of Rs. 20,00,000. The management was also asked to give a Rs. 15,00,000 bond guarantee. In this case, the Court has laid down the concept of absolute liability for the use of dangerous chemicals in the case of injury.

Furthermore, the Court directed the Government of India to establish a national policy for the location of chemical and other hazardous industries in areas where the population is scarce and there is little danger or risk to the environment, and when hazardous industries are located in such areas, all care must be taken to ensure that large human habitation does not grow around them. Preferably, there should be a 1 to 5 km green belt around such dangerous areas.