Report No. 186

Hazardous substance.- Absolute liability

Absolute or strict liability is one where fault need not be established. It is no-fault liability.

Initiatives such as the 1993 Lugano Convention on Civil Liability for Damage Resulting from Activities Dangerous to Environment; the European 123Commission Green Paper on environmental liability (1993) and the Chapter on liability for contaminated land of the Swedish Environment Code (2000), suggest that the polluter pays principle calls for the establishment of a strict liability regime. There are four Nuclear Conventions, one of 1960, two of 1963 and another of 1971 which lay down strict liability.

There are others dealing with oil spill-overs of 1969, 1971 and 1992 which too impose strict liability. More recently, in its White Paper on Environmental Liability, the European Commission stressed that liability independent of fault must be favoured for two reasons: first, it is very difficult for plaintiffs to establish fault in environmental liability cases; and secondly, it is the person who undertakes an inherently hazardous activity, rather than the victim or society in general, who should bear the risk of any damage that might ensue.

Our Courts or statutes have, however, not extended the principle of strict liability to all cases where 'Polluter Pays Principle' applies, but have confined such absolute liability only to cases where injury to person or property is occasioned by use of 'hazardous' substances.

In the Oleum Gas Leak case (M.C. Mehta vs. Union of India) AIR 1987 SC 1086, the Supreme Court laid down that an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of persons working in the factory and to those residing in the surrounding areas, owes an absolute and nondelegable duty to the community to ensure that no harm results to any one on account of hazardous or inherently dangerous nature of the activity which it has undertaken.

The enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to 124say that it had taken all reasonable care and that the harm occurred without negligence on its part. The larger and more prosperous the enterprise, greater must be the amount of the compensation payable for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise.

The principles laid down in Ryland vs. Fletcher: LR 3 H.L. 330 were modified. It is no longer permissible in the case of injury by use of hazardous substances, to prove merely that the injury was not foreseeable or that there was no unnatural use of the land or premises by the factory, as was the position under the law laid down in Rylands vs. Fletcher. This principle was reiterated in Indian Council for Environ-Legal Action vs. Union of India 1996(3) SCC 212 (see p 246, para 65) and other cases by the Supreme Court of India.

The above principle (called 'no fault' principle) was, in fact, incorporated in section 3 of the National Environmental Tribunal Act, 1995, read with the special definition of the words 'accident' in section 2 (a) and 'handling' in section 2(e) and 'hazardous substance' in section 2(f) of that Act. Section 2(a) and 2(e) refer to hazardous substances which are used or handled and which cause the 'accident'. Section 2(f) defines 'hazardous substance' as any substance or preparation which is defined as hazardous in the Environment (Protection) Act, 1986 and exceeding such quantity as specified by the Central Government under the Public Liability Insurance Act, 1991. Section 3 states as follows:

"Section 3: Liability to pay compensation in certain cases on principle of no fault: 125(1) Where death of, or injury to, any person (other than a workman) or damage to any property or environment has resulted from an accident, the owner shall be liable to pay compensation for such death, injury or damage under all or any of the heads specified in the Schedule.

(2) In any claim for compensation under subsection (1), the claimant shall not be required to plead and establish that the death, injury or damage in respect of which the claim has been made was due to any wrongful act, neglect or default of any person.

Explanation: (i) 'workman'.......

(ii) 'injuries'.....

(3)................................"

Clause (3) refers to apportionment of liability between different tort feasors. In the Schedule, there are clauses (a) to (n). Clauses (a) to (e) deal with damage to person or property, clause (f) to (n) deal with damage to ecology.