DHARMASHASTRA NATIONAL LAW UNIVERSITY,
JABALPUR, M.P
ACADEMIC YEAR 2024-25
SUBJECT: LAW OF TORTS
PROJECT TOPIC: ABSOLUTE LIABILITY
SUBMITTED BY: SUBMITED TO:
Vanshika Chhingawat Dr. Praveen Tripathi,
BALLB/122/24 Associate Professor (Law)
& Isha Paliwal, Teaching
Associate (Law)
INTRODUCTION
PROBLEM SCENERIO
The problem circles around Shakti Fertilizers Ltd., a company operating in the
outskirts of Jabalpur, Madhya Pradesh. They stored and used Methyl isocyanate
(MIC), a highly toxic substance essential for making fertilizers and pesticides.
One day, a malfunction in the cooling system in one of the MIC storage tanks
caused a dangerous rise in temperature inside the tank, resulting in a
catastrophic gas leak in the village. There was delay on part of company in the
maintenance of storage tanks and cooling systems due to budget constraints.
As the toxic gas escaped in the nearby village, the residents experienced severe
health symptoms, like breathlessness, chest pain, and vomiting, while others got
injured from falls and stampedes. The livestock grazing nearby also died.
Emergency services rushed to the scene, but by the time the leak was contained,
hundreds of villagers had been hospitalized, some were left with long-term
respiratory issues, some lost their animals and others suffered loss due to crop
failure.
In light of the extensive damage and suffering, the affected villagers filed a
lawsuit against Shakti Fertilizers, seeking compensation based on the principle
of absolute liability.
SCOPE OF ANALYSIS
This project examines the legal implications of the Shakti Fertilizers Ltd. gas
leak through the lens of tort law, focusing on absolute liability. It analyses
different issues for evaluating the liability of the company through statutory
provisions and case laws relevant to the problem provided. Finally, a conclusion
will be drawn, offering recommendations for resolving the case, and the
potential remedies or defences available.
ISSUES TO BE DISSCUSED
1. Can Shakti Fertilizers Ltd. be held absolutely liable for the gas leak despite
claims of unforeseen circumstances?
2. Does adherence to environmental regulations and internal safety measures
provide a valid defence against absolute liability?
3. How the failure to conduct timely maintenance on the MIC storage tank and
cooling system affect the company's liability?
4. What compensation are villagers entitled to for health damage, crop losses,
and livestock death, and how does absolute liability impose a higher
accountability standard?
5. What is the distinction between strict liability and absolute liability in
inherently hazardous industries?
JURISPRUDENTIAL FRAMEWORK OF THE TORT
The principle of absolute liability has got its roots to English common law,
where the concept began with strict liability in the case of Ryland’s v. Fletcher
(1868) for dangerous activities. However, it was felt that the rule of strict
liability did not fully meet the needs of a modern industrial society with highly
developed scientific knowledge and technology where hazardous and inherently
dangerous industries were necessary to be carried on as part of the development
programme. The doctrine of absolute liability gained prominence in the
nineteenth century especially in cases involving hazardous industries which
dealt with explosives and toxic substances. Courts adopted the concept of
absolute liability to establish duty on those individuals or entities that profit
from such dangerous items or activities and hold them fully responsible for any
harm caused, even in cases of intentional harm or actual negligence. Over time,
jurisdictions worldwide have expanded absolute liability to environmental and
public safety matters, emphasizing responsibility without requiring proof of
fault.
In the context of India, a more stringent rule than the rule of strict liability was
laid down by the Supreme Court in the case of M.C. Mehta v. Union of India.
The court laid down the rule as follows: “Where an enterprise is engaged in a
hazardous or inherently dangerous activity and harm results to anyone on
account of an accident in the operation of such hazardous or inherently
dangerous activity resulting, for example, in 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
with the tortious liability of strict liability.
ABSOLUTE LIABILITY
Absolute liability is a legal doctrine that holds a party responsible for damages
caused by their activities, regardless of fault or intent, particularly applicable to
inherently dangerous activities where harm is a foreseeable consequence,
emphasizing the responsibility to prevent such harm.
ESSENTIALS OF ABSOLUTE LABILITY
Inherently Dangerous Activity or substance:
The activity or substance in question must involve a high degree of risk or have
the power to be potentially destructive to harm public or the environment. The
defendant must be involved in dealing with a substance or conducting an
activity which is inherently hazardous or dangerous.
Damage:
There must be actual harm or damage caused to the plaintiff resulting from the
escape, affecting individuals or their property. The escape of the hazardous
substance must result in some damages.
No Defences:
Absolute liability does not allow for defences. The defendant can’t use
negligence, fault, or any other defence to avoid liability. This rule is not only
strict but also absolute as it is subject to no exceptions.
ANALYSING THE ISUUES:
1. It was stated in the M.C Mehta v. Union of India that if an enterprise is
permitted to carry on an hazardous activity for its profit, the law must presume
that such permission is conditional on the enterprise absorbing the cost of any
accident arising on account of such hazardous activity as an appropriate item of
its over-heads.
Shakti Fertilizers Ltd. dealt with MIC, a toxic and hazardous substance which
escaped as a form of leak, due to the negligent behaviour of the company in
delaying the maintenance of storage tanks and cooling systems. And due to this
leak, severe damage to the life and property was caused.
The fundamental nature of absolute liability suggests that defences like
unforseeability does not hold weight. The company bears a non-delegable duty
to ensure the highest safety standards due to the potential for catastrophic harm
to individuals and the environment.
2. In the case of Indian Council for Enviro-Legal Action v. Union of India
(1996), the Supreme Court made it clear that industries engaged in hazardous
activities cannot claim the defences of unforseeability. Merely showing that
they complied with environmental laws or safety regulations does not absolve
them of responsibility. Absolute liability calls for highest standard of care,
aimed at preventing harm from inherently dangerous activities.
Shakti Fertilizers Ltd.'s adherence to environmental regulations and internal
safety measures is unlikely to serve as a valid defence against absolute liability,
because they remain responsible for any harm consequent to their activities
because absolute liability does not allow for any defences. The postponement of
maintenance on the MIC storage tank is critical. This negligence suggests a
failure to uphold the non-delegable duty of care, exposing the company to
liability. The potential for a gas leak from a malfunctioning storage system
should be considered foreseeable in an operation handling toxic substances.
3. The negligence of the industries in the case of Indian Council for Enviro-
Legal Action v. Union of India (1996), was crucial in the judgement.. The
Court’s judgment reinforced the idea that industries handling hazardous
materials have an absolute and non-delegable duty to ensure public safety,
Given that storing and handling MIC is inherently dangerous, the mere fact that
harm resulted from an accident related to this activity may suffice for liability.
However, the company's postponement of maintenance is critical. This is a clear
failure to take necessary precautions, undermining the argument that the
incident was purely unforeseen. The failure to act on known risks is likely to be
seen as a breach of their duty of care. The company’s inactions directly
contributed to the risk of harm, i.e. inadequate maintenance, leaving the
company fully liable.
4. The Public Liability Insurance Act, 1991 mandates industries handling
hazardous substance to maintain insurance, for providing immediate relief to the
victims of the industrial accidents.
The Supreme Court of India in the case Shri Satyawati v. Union of India (2003),
directed that the industries involved in the release of toxic chemicals should be
held strictly liable for the damage caused to the local community, environment,
and wildlife, regardless of whether the damage was foreseeable or the company
was negligent.
The villagers can claim compensation for hospitalizations, medical treatments,
and long-term health care resulting from exposure to MIC. Compensation for
emotional distress such as psychological trauma can be sought. If any villagers
are unable to work due to health problems, they may claim damages for lost
wages and future earning potential.
Farmers can seek compensation for crops that were destroyed due to the toxic
gas leak. If the contamination affects soil health, the villagers may claim future
losses related to reduced agricultural productivity.
Compensation for the immediate loss of livestock due to the gas exposure
would include the market value of the animals that died and further damages
related to the economic impact of losing these animals.
5. The Court clarified in the Bhopal Gas Tragedy Case that absolute liability
goes beyond strict liability because the latter requires an escape of the
hazardous substance to trigger liability, whereas absolute liability is triggered
by the mere use or storage of hazardous substances, with no escape or
negligence required.
The strict liability rule limits only to non-natural uses of land, while the
principle of absolute liability applies even to natural uses.
As clarified in Bharat Petroleum Corporation lt. v. Union of India (2003),
absolute liability does not allow for exceptions, while strict liability does. It was
upheld that absolute liability removes the ability to defend against claims based
on unforeseeable events or any other defences.
CONCLUSION
In light of the facts presented, Shakti Fertilizers Ltd. should be held absolutely
liable for the gas leak and its tragic repercussions. Given the inherently
hazardous nature of their operations involving MIC, the company had a duty to
ensure complete safety, which they failed to meet, by not conducting timely
maintenance of storage tanks and cooling systems exacerbating their lack of due
diligence. . Negligence in maintenance strengthens the villagers' case by
indicating a lack of preventive action and due diligence.
The company cannot use adherence to safety regulations or unforeseen
circumstances as a defence, because absolute liability does not recognise
exceptions for inherently dangerous industries and it requires companies to go
beyond standard regulatory compliance to ensure zero risk of harm. The damage
caused to villagers and the negligence in company’s actions demonstrate a
direct link establishing causation for their claims. They can seek compensation
for medical expenses, pain and suffering, long-term health effects, destruction
of crops, and the market value of livestock dead.
REFERENCES
1 M.C. Mehta v. Union of India, SCC 395 AIR 1987 SC 965.
2. M.C. Mehta v. Union of India, ( 1987) 1 SCC 395, p. 421. Approved ( except
as to quantum of damages) in Charan Lal Sahu v. Union of India, AIR 1990 SC
1480 pp. 1531, 1549, 1550: ( 1990) 1 SCC 613
3. Public Liability Insurance Act, 1991, No. 6 of 1991, Acts of Parliament,
1991.
4. Indian Council for Enviro-Legal Action v. Union of India, (1996) 3 SCC 212
(India)
5. Bharat Parmar & Aayush Goyal, Absolute Liability: The Rule of Strict
Liability in Indian Perspective, MANUPATRA, (available at
https://docs.manupatra.in/newsline/articles/Upload/2D83321D-590A-4646-
83F6-9D8E84F5AA3C.pdf
6. Shri Satyawati v. Union of India, (2003) 5 SCC 95 (India).
7. Union Carbide Corporation v. Union of India, (1989) 1 SCC 674 (India).
8. Bharat Petroleum Corporation Ltd. v. Union of India, (2003) 2 SCC 473
(India).
9. Ryland’s v. Fletcher, (1868) L.R. 3 H.L. 330 (H.L.)
I also acknowledge the use of ChatGPT in assisting with research, drafting, and
refining ideas for this project, which helped streamline the process and enhance
its quality.
