{"id":230910,"date":"2020-06-15T14:25:16","date_gmt":"2020-06-15T08:55:16","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=230910"},"modified":"2020-07-14T18:56:14","modified_gmt":"2020-07-14T13:26:14","slug":"bhopal-to-vizag-a-jurisprudential-analysis-of-the-tortious-liability-for-companies","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2020\/06\/15\/bhopal-to-vizag-a-jurisprudential-analysis-of-the-tortious-liability-for-companies\/","title":{"rendered":"Bhopal to Vizag – A jurisprudential analysis of the tortious liability for companies"},"content":{"rendered":"

<\/b>I. Introduction<\/b><\/span><\/p>\n

\u201cTort\u201d is a wrongful act or an infringement of a right leading to legal liability for which civil courts award compensation. The law of Torts is an uncodified law which is based on equity, justice and good conscience.<\/span><\/p>\n

In its incipient stage, the English legal system was haphazard and was conducted on a case-to-case basis. Judges were asked to travel in each relevant region to comprehend the local laws which had developed over two centuries. Subsequently, based on their findings, the English judiciary introduced and implemented the said laws, by way of judgments, into the English legal system, which are now called legal precedents. These precedents form a part of the Common Law system.<\/span><\/p>\n

The law of torts in India is based on the principles of the English Common Law. However, it has been modified to meet the local requirements. Some of the important principles of torts include negligence, nuisance, trespass, vicarious liability, strict and absolute liability. In context of the present article, we shall focus upon the concepts of strict and absolute liability vis-\u00e0-vis the two notable industrial disasters in India.<\/span><\/p>\n

<\/i><\/b>a)\u00a0 Doctrine of Strict Liability<\/i><\/b><\/span><\/p>\n

The doctrine of \u201cstrict liability\u201d evolved in\u00a0 <\/span>Fletcher<\/i> v. Rylands<\/i>[1]<\/strong><\/span>. In this case, Rylands hired contractors to build a reservoir on his land. While building it, the contractors discovered some flaws and left them unfixed. After some time, <\/span>Rylands\u2019s reservoir burst and flooded Fletcher’s adjoining mine causing \u00a3937 worth of damage.<\/span>\u00a0 <\/span>Blackburn, J. opined that any person who for his own purposes brings on his land and collects and keeps there anything likely to do mischief, if it escapes must keep it at his peril and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape[2]<\/span><\/strong>.<\/span><\/p>\n

<\/i><\/b>b) Doctrine of Absolute Liability<\/i><\/b><\/span><\/p>\n

The principle of \u201cabsolute liability\u201d was first ever applied by the Supreme Court of India in M.C. Mehta<\/i> v. Union of India<\/i> [3]<\/span><\/strong>(popularly known as Oleum gas leak case<\/i>). I<\/span>n this case, oleum gas leaked from a fertilizer plant of Shriram Foods and Fertilizers, Delhi and caused damage to several people.\u00a0<\/span>A pending public interest litigation (PIL) by M.C. Mehta provided the opportunity to the Court to pass a series of orders dealing with the after-effects of gas leak. In this case, the Court disapproved the application of the principle of strict liability. The Supreme Court opined that: <\/span><\/p>\n

\u201ca<\/i><\/span>n enterprise which is engaged in a 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 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. The enterprise must be held to 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<\/i>.\u201d[4]<\/span><\/strong><\/span><\/p>\n

<\/b>II. Bhopal Gas Tragedy<\/b><\/span><\/p>\n

Union Carbide India Limited\u2019s (UCIL) plant at Bhopal was designed by its holding company Union Carbide Corporation (UCC), USA and was built in 1969 for making pesticides, produced by reacting Methyl Isocyanate and Alpha Naphthol. An incident of gas leak took place in the Bhopal pesticide plant of UCIL on the night of 2-3 December, 1984 causing severe loss to the lives of people in the vicinity. People were exposed to this gas all around the city and the immediate effects were coughing, vomiting, severe eye irritation and a feeling of suffocation. Thousands of people died immediately, and lakhs of people sustained permanent injuries.<\/span><\/p>\n

The doctrine of \u201cabsolute liability\u201d was invoked in this case. In cases, where absolute liability is considered, liability of the company can be fixed even if there is no negligence on the part of the accused company.<\/span><\/p>\n

In addition to the aforesaid, <\/span>the Indian Government filed a case in the US Court for a claim of $3.3 billon against Union Carbide Corporation. By 1986 all these litigations in the US District were transferred to India on the grounds of forum non conveniens<\/i>.[5]<\/span><\/strong><\/span><\/p>\n

Meanwhile, the <\/span>Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985[6]<\/span><\/strong> was passed by Parliament\u00a0 <\/span>to confer certain powers on the Central Government to secure that claims arising out of, or connected with, the Bhopal gas leak disaster, are dealt with speedily, effectively, equitably and to the best advantage of the claimants and for matters incidental thereto. This Act made the Union Government representative of the victims of the tragedy and allowed them to file suits on their behalf. Along with this, an out of court settlement between the Government of India and Union Carbide was arrived at, which fixed the liability of the company to pay $470 million as per the full and final settlement of all claims, rights and liabilities arising out of that disaster. All in all, it was a bad move, as the settlement limited the liabilities for the claims which were filed later. It is a hard fact, but it is as clear as broad daylight that $470 million dollars were not sufficient to compensate all the injured. In fact, it is hardly 15% of the original claim of $3.3 billion.<\/span><\/p>\n

The compensation awarded was around Rs. 1 lakh for the families of the people who lost their lives, Rs. 50,000 for permanently injured and Rs. 25,000 for temporarily injured. <\/span><\/p>\n

<\/b>III. Vizag Gas Tragedy<\/b><\/span><\/p>\n

A similar incident of gas leak happened recently in Vishakhapatnam (Vizag), Andhra Pradesh on 7th May, 2020. Styrene gas leaked from the chemical plant owned by a South Korean company LG Polymers India Private Ltd. with similar repercussions on lives of the people living in the vicinity. The immediate worry was that this may be a repetition of the Bhopal Gas Tragedy of 1984. People in the neighbouring areas were evacuated immediately for preventing the damage. Even though this gas leakage was less dangerous than the leak at the Union Carbide factory in Bhopal, 13 people still lost their lives and many people were affected by it.<\/span><\/p>\n

The Andhra Pradesh Government announced compensation of Rs. 1 Crore to the families of the people who had lost their lives, Rs. 10 Lakhs to the victims undergoing treatment on ventilators and Rs. 1 Lakh to the other victims who were hospitalised. It was made clear by the Government that the aforesaid compensation would be in addition to the compensation by LG Polymers.<\/span><\/p>\n

Furthermore, the High Court of Andhra Pradesh took suo motu cognizance of the incident and\u00a0 <\/span>vide order dated 07-05-2020[7]<\/span><\/strong>,\u00a0 <\/span>directed the State to take all necessary steps to mitigate the loss that may be caused due to this incident. Consequently, the National Green Tribunal (NGT) also took suo motu cognizance of the incident and directed[8]<\/span><\/strong> the company to deposit an initial amount of Rs 50 crores with the District Magistrate, Visakhapatnam. The Civil Appeal[9]<\/span><\/strong> preferred against this Order before the Supreme Court has been kept pending. However the Supreme Court neither issued notice nor, did it interfere with impugned order of the NGT. <\/span><\/p>\n

The National Green Tribunal invoked the principle of \u2018strict liability\u2019 against LG Polymers for adversely affecting the public health and environment through its failures. However, in our opinion, considering the facts and circumstances of the case of LG Polymers, it is evident that the nature of the substance used and the activities of both the companies (UCIL and LGPI) are similar in nature, and thereby, <\/span>the principle of absolute liability should have been applied in this case too.<\/span><\/p>\n

The company had submitted an affidavit to the State Environment Impact Assessment Authority on 10<\/span>th<\/sup><\/span> May, 2019 admitting that the unit did not have \u2018environment clearance substantiating the produced quantity issued by the competent authority for continuing operations\u2019 from the Ministry of Environment and Forests (MoEF). That affidavit was transferred to the Centre by the State for consideration. The affidavit submitted by the company proves the fact that there was clear hobnobbing and negligence of the government officials who were involved and designated by the respective government departments to ensure compliance of the environmental laws, and thereafter issue commencement certificate. The affidavit also brings out the fact that LG Polymers did not have the requisite permissions and clearances right from the inception[10]<\/span><\/strong>. However, the chemical plant carried on the industrial activities without any mandatory clearance and the facts prove that the industry was even de-listed as it refused expansion as per the directions of the ministry, yet it carried on the production and the negligence of the authorities, both at the Centre and at the State, proved costly and thirteen precious lives were lost and it is historically proven since the Bhopal gas tragedy, such poisonous gases gets into the genes and affects future generations also.<\/span><\/p>\n

In the instant case, the erring government officials should be taken to task immediately by the High Court and departmental inquiries should be initiated against such erring officials and it should be seen that the people responsible in our system along with the Directors of the Company, are awarded the maximum punishment for such deliberate negligent act, which claimed innocent lives. Only then, it can act as a deterrent for other erring officials and erring companies who act in such brazen defiance of the statutory norms. This incident proves the very fact that no matter how much we try, until and unless we raise our voice against corruption, innocent lives will continue to get sacrificed.<\/span><\/p>\n

The <\/span>Andhra Pradesh High Court in Poisonous gas leakage in Visakhapatnam <\/i>v. State of Andhra Pradesh<\/i>[11]\u00a0 <\/span><\/strong><\/span>vide order dated 22-05-2020 issued the following directions: The Government was ordered to seize the company premises of the LG Polymers chemical plant, Vizag and the directors were not allowed to enter the premises. In addition to this, assets, fixture, machinery and contents were not allowed to be shifted without Court\u2019s permission. The Directors of the Company were ordered to surrender their passports and hence, they were not allowed to leave the country without the Court\u2019s permission.<\/span><\/p>\n

<\/b>IV. Conclusion<\/b><\/span><\/p>\n

On an analysis of the given circumstances, it is proved that the management of the company (LG Polymers) did not comply with the necessary environmental laws which were necessary for a Grade-A chemical plant and the affidavit submitted on 10.5.2019 to the State Department is a blatant admission of the same. The chemical plant was functioning even after de-listing from the Ministry of Environment and Forests (MOEF). It restarted its functions without the clearance from MoEF and the requisite permissions and licenses. Moreover, the government department and officials concerned who were entrusted and empowered to give such clearances did not scrutinise the very fact that the Company was de-listed for non-compliance and the affidavit dated 10.05.2019 admits such default on the part of the company and yet the plant started its operations. This act is nothing but a glaring example of corruption and scant regard for the rules, regulations or the safety of people. <\/span><\/p>\n

Furthermore, the Constitution of India ensures checks and balances on the part of executives and citizens of the country. The Directive Principles of State Policy in Part-IV of the Constitution ensure that the necessary safeguards should be taken for environmental protection[12]<\/span> <\/strong>and even the Supreme Court in a catena of decisions, has interpreted the\u00a0 <\/span>right to clean environment as a facet of Article 21 of the Constitution of India. The legislations pertaining to environmental law ensure that necessary prerequisites are in place.<\/span><\/p>\n

The situation as it existed in 1986 has not changed much even after thirty-four years. The attitude of big companies seems to be of non-compliance and the government officials appear to be turning a blind eye to such companies at the cost of human lives. The law must ensure that such cases are treated with the utmost seriousness and urgency and that all the erring officials and directors of the company, should be punished appropriately so that justice prevails and a zero tolerance attitude is cemented for such cases.<\/span><\/p>\n

\n

*Partner, L&L Partners, New Delhi<\/span><\/p>\n

**Senior Associate, L&L Partners<\/span><\/p>\n

***Intern, L&L Partners<\/span><\/p>\n

[1]<\/span><\/strong> (1866) LR 1 Ex 265.<\/span><\/p>\n

[2] <\/span><\/strong>Fletcher v. Rylands ,<\/span> (1866) LR 1 Ex 265<\/span><\/p>\n

[3] <\/span><\/strong>(<\/span>1987) 1 SCC 395<\/a>\u00a0<\/span><\/p>\n

[4] <\/span><\/strong>M.C. Mehta v. Union of India, (<\/a><\/span>1987) 1 SCC 395<\/span><\/a><\/p>\n

[5] <\/span><\/strong>Forum Non Conveniens<\/i><\/span> is a doctrine which allows a Court with jurisdiction over a case to dismiss it because the convenience of the parties and the interest of justice would be better served if the case were brought in a court having proper jurisdiction in another venue.<\/span><\/p>\n

[6] <\/span><\/strong>Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985<\/a>\u00a0<\/span><\/p>\n

[7]<\/span><\/strong> Poisonous gas leakage in Visakhapatnam, In re v. State of Andhra Pradesh, Suo Motu WP (PIL) No. 112 of 2020<\/span><\/p>\n

[8]<\/span><\/strong> Gas Leak at LG Polymers Chemical Plant in RR Venkatapuram Village Visakhapatnam in Andhra Pradesh, In re., 2020 SCC OnLine NGT 128<\/a> <\/span><\/p>\n

NGT vide order dt. 1-6-2020 [Gas Leak at LG Polymers Chemical Plant in Vishakhapatnam, In re, 2020 SCC OnLine NGT 129<\/a>] has since directed the appropriation of Rs 50 crores deposited by LG Polymers, towards part liability and interim compensation to be spent for restoration of environment and compensation for victims.\u00a0<\/span><\/p>\n

[9] <\/span><\/strong>LG Polymers India Pvt. Ltd. v. Andhra Pradesh Pollution Control Board, Civil Appeal Diary No. 11327\/2020, order dated 19-5-2020<\/span><\/p>\n

[10]. <\/span><\/strong>https:\/\/www.thehindu.com\/news\/cities\/Visakhapatnam\/lg-polymers-did-not-have-environmental-clearance-alleges-hrf\/article31561365.ece<\/a><\/p>\n

[11]. <\/span><\/strong>Suo Motu WPs (PIL) Nos. 112, 117 & 119 of 2020<\/span><\/p>\n

[12]<\/span><\/strong>. Article 48-A of the Constitution of India, 1950 (inserted vide 42<\/span>nd<\/sup><\/span> Amendment Act, 1976)<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

by Wasim Beg *, Swarnendu Chatterjee** & Kritika Khanna***<\/p>\n","protected":false},"author":8808,"featured_media":230911,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[42503,1191],"tags":[36338,2728,41948,40865,3065,41947,3255,41946],"class_list":["post-230910","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-analysis","category-op-ed","tag-bhopal-gas-tragedy","tag-compensation","tag-gas-laek","tag-legal-liability","tag-negligence","tag-poisonous-gas-leakage","tag-tort","tag-vizag-gas-tragedy"],"yoast_head":"\nBhopal to Vizag - A jurisprudential analysis of the tortious liability for companies | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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Venkata Ramana, J. while pronouncing the grant of bail to certain persons from the management of LG Polymer in the Styrene Gas Leakage Matter, quoted the following: 'Life's Good'. It is always so, on this beautiful planet, the Earth. 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