To address the unique dangers posed by large-scale hazardous chemical enterprises, the Indian judiciary departed from colonial common law to formulate a strict, no-exception liability standard.
1. Evolution: Strict Liability vs. Absolute Liability
| Strict Liability (Rylands v. Fletcher, 1868) | Absolute Liability (M.C. Mehta v. UOI, 1987) |
|---|---|
| Applies when a non-natural user of land keeps something dangerous that escapes and causes damage. | Applies to enterprises engaged in hazardous or inherently dangerous activities. |
| Subject to five major exceptions: Act of God, Plaintiff's fault, Act of third party, Consent, or Statutory authority. | No exceptions permitted. The enterprise holds an absolute, non-delegable duty to ensure no harm occurs. |
| Compensation is calculated based on actual damage suffered. | Compensation is correlated to the magnitude, size, and wealth of the enterprise (deep pockets = higher damages). |
2. The Oleum Gas Leak Case: M.C. Mehta v. Union of India (1987)
Following a gas leak at the Shriram Food and Fertilizer plant in Delhi, Chief Justice P.N. Bhagwati formulated the doctrine of Absolute Liability, declaring that India could not rely on outdated 19th-century English precedents to govern modern industrial hazards.
3. The Bhopal Gas Tragedy Case
In Union Carbide Corporation v. Union of India (1989), the Supreme Court applied absolute liability principles to the devastating Methyl Isocyanate leak, approving a $470 million settlement and reinforcing that multinational parent corporations cannot escape liability by hiding behind local subsidiaries.