The Rule of Absolute Liability -

THE RULE OF ABSOLUTE LIABILITY
(THE RULE IN M.C MEHTA v. UNION OF INDIA)

In the landmark decision of M.C. Mehta v. Union of India, the Supreme Court established the doctrine of Absolute Liability, departing from the English rule of strict liability in Rylands v. Fletcher.
Following the 1985 oleum gas leakage in Delhi, the court observed that traditional strict liability allowed hazardous industries to escape liability through defenses such as third-party sabotage.
Chief Justice Bhagwati held that hazardous or inherently dangerous enterprises owe a non-delegable duty of care and are absolutely liable for harm caused, without exceptions or defenses of due diligence.
The court justified this on two grounds: enterprises operating risky ventures for profit must treat compensation as an overhead cost, and they alone possess the technical and financial capacity to prevent such hazards.
Compensation should also reflect the magnitude and financial capacity of the enterprise to ensure an effective deterrent.
This principle has also been applied to high-voltage electricity suppliers, who may be held absolutely liable for harm caused by the uncontrolled discharge of electrical energy.

Following the principles established by the Supreme Court regarding hazardous activities, the Orissa High Court in Pramila Khatua v. CESU of Orissa held the Electricity Supply Unit (ESU) strictly liable to compensate the petitioner following her husband’s death by electrocution.
A live electric wire had snapped from an overhead main line and lay concealed beneath grass in a field, causing the fatal accident when the victim came into contact with it.
The High Court emphasized that electricity suppliers have an essential duty to properly maintain power transmission lines and implement robust safety measures to prevent live wires from falling or coming into contact with any person or animal.

Reaffirming the Absolute Liability doctrine established in the Oleum Gas Leak case (M.C. Mehta v. Union of India), the Supreme Court in Indian Council For Enviro-Legal Action v. Union of India addressed severe environmental damage caused by ‘H’ acid and sulphuric acid plants in Bichhri village.
Toxic discharges and uncollected sludge polluted local land and water sources, leading to a Public Interest Litigation under Article 32 alleging violation of the villagers’ Right to Life under Article 21.
The Supreme Court upheld the petition and reaffirmed its duty to protect fundamental rights and compel government agencies to enforce statutory duties.
Applying Absolute Liability and the “Polluter Pays” principle, the Court ordered the Central Government to determine the full cost of environmental restoration and sludge removal.
It directed the attachment of the companies’ factories, plant machinery, and immovable assets to recover the required amount for restoration.
Describing the polluting units as “rogue industries”, the Court ordered their immediate closure and directed them to pay ₹50,000 in litigation costs to the petitioner.

In Klaus Mittelbachert v. East India Hotels Ltd., the Delhi High Court applied the principle of absolute liability in the hospitality sector.
A German co-pilot staying at Hotel Oberoi Inter-continental, a five-star hotel in New Delhi, suffered severe injuries after diving into the swimming pool due to defective structural design and insufficient water levels.
The injuries caused long-term paralysis and ultimately led to his death 13 years later.
The court held that luxury five-star hotels charging premium prices owe an extraordinarily high degree of care to guests and that latent defects in their structure or services attract absolute liability.
The plaintiff was awarded ₹50 lakhs in compensation for the fatal accident.

On the night of December 2–3, 1984, a massive leak of toxic Methyl Isocyanate (MIC) gas from the Union Carbide India Ltd. (UCIL) pesticide plant in Bhopal killed at least 3,000 people and affected over 600,000 others with severe, long-term health complications.
To protect the victims, the Government of India enacted The Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985, granting the Central Government exclusive authority to represent all claimants.
Although the government initially filed suit in a New York federal court, the case was dismissed under forum non conveniens and returned to India.
The District Court of Bhopal ordered UCC to pay ₹350 crore in interim relief, later reduced to ₹250 crore by the Madhya Pradesh High Court.
Crucially, M.C. Mehta v. Union of India established Absolute Liability, removing traditional defenses under Rylands v. Fletcher and making enterprises engaged in inherently dangerous activities fully responsible for resulting harm.

Following over four years of legal proceedings, the Supreme Court of India finalized a settlement on February 14–15, 1989, in Union Carbide Corporation v. Union of India, ordering UCC to pay $470 million (approximately ₹750 crore) in compensation.
The fund covered permanent and temporary disabilities, severe injuries, fatal claims, medical rehabilitation, and minor injuries or property losses.
The Supreme Court upheld the settlement under civil procedure and contract laws, holding that the punitive capacity-proportional damages rule from M.C. Mehta did not apply to the negotiated compromise, while directing a specialized hospital and claim adjudication framework for victims.
However, administrative execution was severely delayed, with a 74% rejection rate and projections of a 15-year delay.
After interim monthly relief was reduced in April 1993, the Supreme Court on April 30, 1993, directed that the entire $470 million settlement and accumulated interest be distributed as direct compensation to approximately 600,000 victims.
These failures contributed to the enactment of the Public Liability Insurance Act, 1991, providing immediate insurance-backed relief for victims of hazardous industrial operations.