- Edited and Published by S.K Nair Director Edutech Foundation - Bangalore
The eerie recollections of Bhopal Gas Tragedy have been triggered with the gas leak at LG Polymers Private Limited at Vishakapatnam, India. Located at Vishakapatnam, Hindustan Polymers was 100% acquired by South Korean battery giant LG Chemical Ltd and thereafter was renamed as LG Polymers Private Limited (“LG Polymers”). On 7th of May, 2020 there was a gas leakage from LG Polymers plant due to which people in and around Gopalapatnam area where LG Polymers is located, complained of breathlessness, nausea, eye irritation, rashes, many of them fell unconscious on the ground and a few others lay dead due to inhalation of the poisonous gas alleged to be Styrene. A number of people including children died and thousands of others were hospitalised and many others had to be immediately evacuated from the vicinity of Gopalapatnam.
While the State government has announced steps to tackle the situation and compensation packages to affected families, the National Green Tribunal (“NGT”) took suo moto cognizance of the said matter. The NGT Act, 2010 (“NGT Act”) does not confer powers on the NGT to take suo moto cognizance and the question on whether or not NGT can take suo moto cognizance is still pending before the Honourable Supreme Court of India. However, incidents such as the LG Polymers case demonstrates the need for NGT being entrusted with such suo moto cognizance powers and necessitates consequent amendments to the NGT Act. In the LG Polymers case by way of its order dated 8th of May, 2020 (“Order”), the NGT directed LG Polymers to deposit Rupees 50 Crore as an initial deposit having regard to the prima facie damage to life, public health and environment and also constituted a 6 member committee to provide a report on the matter, especially with respect to the sequence of events; causes of failure of persons and authorities; extent of damage of life (human and non-human), public health, environment including water, soil and air; steps to be taken for providing compensation to the victims and restitution of the damaged property and environment with costs involved therein; remedial measures to prevent recurrence and other incidental issues. The NGT in its Order states that the issue ‘clearly attracts strict liability’ against the enterprise engaged in hazardous or inherently dangerous industry.
The concept of ‘strict liability’ was formulated in the landmark matter of Rylands v Fletcher, where the House of Lords laid down that if a person brings on to his land and collects and keeps anything likely to do harm, and such thing escapes and does damage to another, he is liable to compensate for the damage caused. The rule applies only to a non-natural user of land and the only exceptions to applicability of this rule is (i) Act of God/ Third Party, or (ii) Default of the person injured, or (iii) Consent - where the thing which escapes is present by the consent of the injured person, (iv) Statutory authority - where the act in question was carried out as required by the statutory authority.
However, in the matter of MC Mehta v Union of India, the Supreme Court formulated the concept of absolute liability or no-fault liability, while deciding the issue of Oleum gas leakage at the plant of Shriram Foods and Fertiliser Industries in Delhi. The Supreme Court, in this matter differentiated between strict liability and absolute liability, highlighting the need for the concept of absolute liability in view of the fast-paced growth of industrialisation. The Supreme Court, while formulating the concept of absolute liability stated that the exceptions allowed under strict liability should not apply in the case of absolute liability. The Supreme Court held “an enterprise engaged in 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, such enterprise owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. Such enterprise should be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account 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”. It was held that any enterprise which is permitted to carry on hazardous or inherently dangerous activity for its profit, the law must presume that the said permission is conditional on the enterprise absorbing the cost of any accident arising out of such hazardous or inherently dangerous activity, as an appropriate item of its over-head costs. The Supreme Court went on to finally hold “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 vis-a-vis the tortious principle of strict liability under the rule in Rylands v. Fletcher”. The Rylands v Fletcher rule was therefore declared to be obsolete considering the fast-paced industrialisation. Compensation under strict liability will be in accordance with the nature and quantum of damages caused, whereas the concept of absolute liability requires the enterprise to indemnify, compensate the affected in an exemplary manner, depending on the magnitude and financial capability of the enterprise, so that a deterrent effect is created. As opposed to strict liability, under the concept of absolute liability, it is not of any importance or consequence whether or not the enterprise was negligent or had taken reasonable diligence or precautionary measures.
The position on absolute liability upheld by the Supreme Court of India in the matter of MC Mehta v Union of India, was subsequently applied to a number of cases included the Union Carbide Corporation v Union of India or the Bhopal Gas Tragedy case, Uphaar Tragedy Case. Further, the NGT Act under Sections 17 and 20 mandate the applicability of principles of no-fault liability, polluter pays, sustainable development and precautionary principle, while deciding cases. This being the case, while NGT has directed LG Polymers to deposit an amount of Rupees 50 crore as an initial deposit, the usage of the words “strict liability” by the NGT in its Order is unclear, since the law and precedent on the subject matter is quite clear.
While the NGT has also formed a committee to look into the details of the gas leak incident, it is also of high importance to understand whether LG Polymers had procured the necessary environmental authority approvals and whether the same were subsisting. In addition to the liability which is cast on the business enterprises and the inherent social responsibility of the said enterprise, it is also essential to take a look at whether there was lapse on the part of the authorities in the said incident, in which case the liability of the authorities should also be evaluated. This is very relevant since such lapses on the part of authorities costs a number of innocent lives and also have a heavy bearing on the environment.
India set a precedent in MC Mehta v Union of India, by adopting the rule of absolute liability and making erring hazardous industries absolutely liable. The Constitution Bench, led by the then Chief Justic PN Bhagwati, while upholding the principle of absolute liability held “We in India cannot hold our hands back, and I venture to evolve a new principle of liability which English courts have not done. We have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concomitant to an industrial economy, there is no reason why we should hesitate to evolve such principle of liability merely because it has not been so done in England”. It is yet to be seen on how the matter unfurls, upon further findings and reports from the committee formed by the NGT.
This being said, it is a matter of genuine hope that the usage of the words ‘strict liability’ by the NGT in its Order was a matter of oversight and that India does not take a zillion steps backwards from the significant precedent of absolute liability set by the Supreme Court of India in MC Mehta v Union of India.
Sahana Chandrika
Advocate
