“Shriram Food and Fertilisers Gas Leak Case”


Shriram gas leak case is a notable case in the field of environmental activism. This case marks the Supreme Court as the protector of the people against big industry located near Kirti Nagar. A year after the Bhopal gas leak, the Shriram gas leak occurred, causing massive damage at that time. People barely got up after the horrific Bhopal gas leak, another gas leaked, which shows the failure of justice and authorities at that time. Shriram gas leak case is also special because in this case, the court has held the industry completely responsible for the loss due to the escape of hazardous substances from its premises. And the concept of absolute liability was implied here. 


Shriram Food and Fertilizer is an alternative to the Delhi textile mill which is a privately owned company that produces hard technical oils and glycerine soaps. In the highly populated area of Kirti Nagar, where approx. 200,000 people reside, Shriram food and fertilizer was situated and manufactures caustic chlorine and oleum. Shriram food and fertilizer were spread over 76 acres of land and all the units of the factory were set up on one campus. According to the nature of the factory and the chemical process, it develops huge pollution which causes a public nuisance. An environmental activist M.C. Mehta filed a Public Interest Litigation (PIL) (No. 12,739, 1985) and asked the Supreme Court to close or move the industry.

A month after the filing of the petition, on 4 and 6 December 1985, a leak of oleum gas from one of its units resulted in the death of a lawyer practicing in Tis Hazari court and causing damage to many locals.As a consequence of the collapse of the structure of the building in one of the tanks which contained oleum gas burst out and after two days, one more minor leak was observed due to a fault in pipe joints. After which compensation was asked from the company for the people who suffered the damage by environmental activist M.C. Mehta. 

Immediate action was taken after two leaks and an order was passed by the Delhi Magistrate as per sub-section (1) of Section 133 of the Code of Criminal Procedure. It was ordered to Shriram food and fertilizer to shut the occupation and manufacturing of harmful substances which include chlorine, oleum, Super Chlorine, phosphate, etc, at their place in Delhi. And immediately stop facility of such hazardous substance in Delhi within 7 days or appear in court on 17th December 1985 for showing the cause why this order should not be enforced.

The Supreme Court said that the issue should be presented before a larger bench. As issue raises the question of the interpretation of Article 21 and Article 32 of the Indian Constitution. The court had to define Article 32 to determine if a writ with compensation could be granted and Article 21, which establishes the right to protect life and liberty, was also interpreted as being necessary for the public interest in relation to private companies.


Justice J. Bhagwati, while showing great concern for the people of Delhi, stated that the total elimination of hazardous chemical factories is not a solution as they contribute to social and economic development. And the complete closure of the factory would only result in unemployment and job losses of about 4000 workers in the caustic soda factory. Since hazardous chemical factories are harmful to the public, but cannot be closed completely, it can be expected that the hazard can be reduced by taking all preventive measures. As result, the company was allowed to open under 11 conditions and a committee was formed to oversee all the activities of the company.

Some of the most important provisions enacted by the government: –

  1. In accordance with the Water Act (Prevention and Control of Pollution) of 1974 and the Air Act (Prevention and Control of Pollution) of 1981, the Central Pollution Control Board shall establish an inspector to verify the level of pollutants.
  2. Establishing an employee’s safety board.
  3. Industry to publicly disclose the effects and proper chlorine treatment.
  4. Train and educate workers in terms of plant safety through audio-visual facilities and install loudspeakers in case of gas leakage to alert neighbors.
  5. Equipment such as helmets and belts should be used by workers.
  6. Shriram’s employees shall provide the Chairman of Delhi Cloth Mills Limited with the undertaking that the employees will be responsible for the liability paid for any accident or damage resulting in death or injury to workers or individuals living nearby in connection with the gas escape.

These provisions have been formulated in response to the reports of the Manmohan Singh Committee and Nilay Choudhary Committee in order to ensure continued safety and compliance standards and procedures, thus reducing the possible danger and risk to workers. Furthermore, enterprises cannot escape liability by proving that they are not irresponsible about the hazardous material or that they have taken all necessary and sufficient measures to deal with it. 

In addition to issuing guidelines, the court noted that under Article 32 and the Supreme Court, new techniques and methods for upholding fundamental rights could be established. The power under Article 32 in the event of a threat to fundamental rights does not apply only to preventive actions, but also to remedial acts where rights have already been violated, as found in the case of Bandhua Mukti Morcha v. Union of India. Furthermore, the court has held that it has the power to grant remedial relief in situations where a fundamental right infringement is egregious and affects a significant number of citizens or people who are vulnerable and backward.

The court also looked at the Industrial Policy Resolution of 1956, which divided the industries into three classes based on the position the government could play in each of them. The first was solely the state’s fault. The Court also applied Industrial Policy Resolution 1956, which split the industries into three classes based on their position in each of them. The first, the state is alone liable. The second category were those sectors that were eventually state-owned, of which the State usually took the initiative to start new projects but would still have to supplement the State’s efforts by funding and starting up businesses or by involving the State. The third group would encompass all other sectors which would normally be left to the effort and organizations of the private sector.

An analysis of the provisions in the Policy Resolution Acts finds that the operations of manufacturing chemicals and fertilizers are regarded as a critical part of the public sector, the activities of the state itself, with State funding and under state supervision, should eventually be carried out during the interim term by the state itself. Though the court did not finally determine if a private company was covered by Article 12 of the Indian Constitution, it emphasized that it would be necessary to do so in the future.

The concept of absolute liability was implemented. Rylands v. Fletcher’s rule cannot be applied in the case of hazardous chemical factories because third-party work and natural disasters are out of bounds The leak was caused by a human and mechanical error that did not involve any third party or natural disaster, so the principle of absolute liable is applicable. Any industry that is involved in any hazardous activity that may harm public health is obliged to take reasonable care and cause no harm to anyone. Any Industries should compensate for the loss caused due to escape of its hazardous substance, as a part of the social cost for storing such hazardous substance in its premises. 

Shriram’s case is very important in the advocacy of the environment, as it shows the Supreme Court as the representative of the people against the biggest establishment Shriram Food and Fertilizers. The Supreme Court applied the principle of absolute liability as it conserved the principle of strict liability insufficient for the protection of citizens. Under Article 21, the Supreme Court not only protects the fundamental right to life, but also the pollution-free and safe environment. Prior to this case, India also uses the concept of strict liability which states that if an owner/operator is responsible for the unnatural use of his land in spite of his negligence or misconduct, he/she is held liable but this has principle have defense of “Act of God”. Strict liability is replaced by absolute liability as strict liability has limited provisions as well. 


The decision was made in such a way that no resistance was provided to the victims in economic development and justice. The case set a precedent for establishing strict security measures for all industries. This case is notable because it was the first case where the company is solely responsible for the loss, regardless of the claimed loss. The decision made by the Supreme Court includes all legal aspects, economic and all social factors, which made the Supreme Court the protector of public rights and the environment.

Drishti Chhattani
I am a law student pursuing BBA LL.B at ITM University, Raipur. I have a desire to serve the community and to be part of our justice system. I’d always been interested in corporate law and civil law. I love reading, writing, and researching.