The Oleum gas leak happened at Shriram Food and Fertiliser Industries, a branch of Delhi Cloth Mills Ltd., in the crowded area of Kirti Nagar, Delhi. The gas leak caused serious harm to people living nearby. In response, a lawyer named M.C. Mehta filed a writ petition in the Supreme Court on December 4 and 6, 1985, under Articles 21 and 32 of the Constitution. He asked the Court to shut down the Shriram Caustic Chlorine and Sulphuric Acid Plant because it was dangerous to public health. While the case was still being heard, another gas leak happened from one of the units. After this second leak, the Delhi Legal Aid and Advice Board and the Delhi Bar Association filed applications asking for compensation for the victims affected by the gas leak.
Issue before the Court
The main issues in the case were:
- Jurisdiction under Article 32: Whether the Supreme Court can grant compensation for the violation of fundamental rights directly under Article 32.
- Applicability of Article 21 to a Private Company: Whether the right to life under Article 21 can be enforced against Shriram, a private company engaged in an industry affecting public interest and safety.
- Liability of Hazardous Enterprises: What level of liability applies to companies involved in dangerous industries whether the Rylands v. Fletcher rule is sufficient or a stricter principle should be applied.
Analysis of the Court
Justice P.N. Bhagwati in this case emphasized that shutting down hazardous industries is not a practical solution, as it would harm the nation’s economic growth and lead to mass unemployment. For instance, closing Shriram alone would affect over 4,000 workers. Although such industries are dangerous, completely shutting them down is nearly impossible. So, instead of closure, the court focused on reducing risks.
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The government allowed Shriram to function under 11 strict conditions. These included regular pollution checks by the Central Pollution Control Board, creating a safety board for workers, spreading awareness about hazards, using protective gear, and setting up emergency systems like loudspeakers for gas leaks. Also, Shriram employees had to take responsibility for any accidents, promising compensation in case of harm to people.
The court ruled that hazardous industries cannot use the usual legal exceptions from the Rylands v. Fletcher case. Instead, the court applied the principle of absolute liability, meaning companies are fully responsible for any harm caused, regardless of fault. Only natural disasters or actions by unknown third parties could be exceptions but that wasn’t the case here.
The key takeaway from this case is the establishment of absolute liability for industries dealing with hazardous substances. It also introduced the "deep pocket" theory i.e those who can afford to pay should bear the burden. Additionally, the court interpreted Article 21 of the Indian Constitution to include the right to live in a clean and healthy environment.
Concluding Remark
This case is a landmark because it was the first time an Indian company (Shriram Food & Fertilizers Ltd.) was held legally responsible for harming the environment and ordered to pay compensation. The decision came just before the Environment Protection Act, 1986, and set a crucial example for future environmental laws. The Supreme Court didn’t shut down the industry outright, recognizing that industries are vital for national growth. Instead, it imposed tighter safety rules to prevent disasters like the Oleum gas leak while allowing development to continue. The Court balanced three key things: protecting people’s right to a safe and healthy environment, ensuring industries operate responsibly, and supporting economic progress. It stressed that while industries are important, they can’t ignore their duty to avoid harming communities or the environment. This case reminds us that sustainable development isn’t a choice it’s a necessity for a society that values both growth and the well-being of its people.
