Source: https://indiankanoon.org/doc/1486949/
Timestamp: 2019-04-20 14:27:54+00:00

Document:
'other authority'--Extent of availability of Article 21.
Rylands v. Fletcher--Whether applicable in India.
in to the present context, Court should evolve new law.
Court of India not bound to follow.
against a breach of the fundamental right already committed.
Halsburry Laws of England, Vol. 45 Para 1305, relied upon.
liability merely because it has not been so done in England.
the  harm  occurred  without any  negligence  on  its  part.
for the purpose of Indian Courts, especially in view of Art.
ORIGINAL JURISDICTION: Writ Petition (Civil) No. 12739 of 1985.
(Under Article 32 of the Constitution of India.) Petitioner-in-person.
B. Datta, Additional Solicitor General, A.B. Diwan, F.S. Nariman, B.R.L. lyengar, Hardev Singh, Hemant Sharma, C.V.S. Rao, R.D. Aggarwal, Ms. S. Relan, R.S. Sodhi, S. Sukumaran, Ravinder Narain, D.N.	Mishra, Aditya	Narayan, Ms.	Lira Goswami, S. Kachwaha, Mohan, Ravinder Bana, K.C. Dua, K. Kumaramangalam, O.C. Jain and K.R.R. Pilai for the Respond- ents.
Raju Ramachandran for the Intervener.
Soli J. Sorabji for Citizens Action Committee. The Judgment of the Court was delivered by BHAGWATI, CJ. This writ petition under Article 32 of the Constitution has come before us on a reference made by a Bench of three Judges. The reference was made because	cer- tain questions of seminal importance and high constitutional significance were raised in the course of arguments when the writ petition was originally heard. The facts giving rise to the writ petition and the subsequent events have been	set out in	some detail in the Judgment given by the Bench of three Judges on 17th February 1986, and it is therefore	not necessary to reiterate the same. Suffice it to	state	that the Bench of three Judges 826 permitted Shriram Foods and Fertiliser Industries (hereinaf- ter referred to as Shriram) to restart its power plant as also plants for manufacture of caustic	chlorine including its by-products and recovery plants like soap, glycerine and technical hard oil, subject to the conditions set out in the Judgment. That would have ordinarily put an end to the	main controversy raised in the writ petition which was filed in order to obtain a direction for closure of the various units of Shriram on the ground that they were hazardous to	the community and	the only point in dispute which	would	have survived would have been whether the units of Shriram should be directed to be removed from the place where they	are presently situate and relocated in another place where there would not be much human habitation so that there would	not be any real danger to the health and safety of the people. But while the writ petition was pending there was escape of oleum gas from one of the units of Shriram on 4th and	6th December, 1985	and applications were filed by the Delhi Legal Aid & Advice Board and the Delhi Bar Association	for award of compensation to the persons who had suffered	harm on account of escape of oleum gas. These applications	for compensation raised a number of issues of great constitu- tional	importance and the Bench of three Judges therefore formulated the	issues and asked the petitioner and those supporting him	as also Shriram to file their respective written	submissions so that the Court could take up	the hearing	of these applications for compensation. When these applications for compensation came up for hearing it	was felt that since the issues raised involved	substantial questions of law relating to the interpretation of Articles 21 and 32 of the Constitution, the case should be referred to a larger Bench of five Judges and this is how the	case has now come before us.
Mr. Diwan, learned counsel appearing on behalf of Shri- ram raised a preliminary objection that the Court should not proceed	to decide these constitutional issues	since there was no claim for compensation originally made in the	writ petition and these issues could not be said to arise on	the writ petition. Mr. Diwan conceded that the escape of oleum gas took place subsequent to the filing of the writ petition but his argument was that the petitioner could have applied for amendment of the writ petition so as to include a claim for compensation for the victims of oleum gas but no	such application for amendment was made and hence on the	writ petition as it stood, these constitutional issues did	not arise for consideration. We do not think this	preliminary objection raised by Mr. Diwan is sustainable. It is undoubt- edly true that the petitioner could have applied for amend- ment of the writ petition so as to include a claim	for compensation but merely because he did 827 not do	so, the applications for compensation made by	the Delhi Legal Aid & Advice Board and the Delhi Bar Association cannot	be thrown out. These applications for	compensation are for enforcement of the fundamental right to life	en- shrined in Article 21 of the Constitution and while dealing with such applications, we cannot adopt a hypertechnical approach which would defeat the ends of justice. This Court has on numerous occasions pointed out that where there is a violation of a fundamental or other legal right of a person or class of persons who by reason of poverty or disability or socially or economically disadvantaged position cannot approach a Court of law for justice, it would be open to any public	spirited individual or social action group to bring an action for vindication of the fundamental or other legal right of such individual or class of individuals and	this can be done not only by filing a regular writ petition	but also by addressing a letter to the Court. If this Court is prepared to accept a letter complaining of violation of	the fundamental right of an individual or a class of individuals who cannot approach the Court for justice, there is no reason	why these applications for compensation	which	have been made for enforcement of the fundamental right of	the persons	affected by the oleum gas leak under	Article 21 should	not be entertained. The Court while dealing with an application for enforcement of a fundamental right must look at the	substance and not the form. We cannot therefore sustain the preliminary objection raised by Mr. Diwan. The first question which requires to be considered is as to what is the scope and ambit of the jurisdiction of	this Court under Article 32 since the applications for compensa- tion made by the Delhi Legal Aid and Advice Board and	the Delhi Bar Association are applications sought to be main- tained	under that Article. We have already had occasion to consider the ambit and coverage of Article 32 in the Bandhua Mukti Morcha v. Union of India & Ors.,  2 SCR 67	and we wholly endorse what has been stated by one of us namely, Bhagwati, J. as he then was in his judgment in that case in regard	to the true scope and ambit of that Article. It	may now be taken as well settled that Article 32 does not merely confer	power on this Court to issue a direction, order or writ for enforcement of the fundamental rights but it	also lays a constitutional obligation on this Court	to protect the fundamental rights of the people and for that purpose this Court has all incidental and ancillary powers including the power to forge new remedies and fashion new strategies designed to' enforce the fundamental rights. It is in reali- sation of this constitutional obligation that this Court has in the	past innovated new methods and strategies for	the purpose of securing enforcement of the fundamental rights, 828 particularly in the case of the poor and the disadvantaged who are denied their basic human rights and to whom freedom and liberty have no meaning.
Thus it was in S,P. Gupta v. Union of India,  Supp. SCC 87 that this Court held that "where a legal wrong or a legal injury is caused to a person or to a	determinate class of persons by reason of violation of any constitution- al or legal right or any burden is imposed in contravention of any constitutional or legal provision or without authori- ty of law or any such legal wrong or legal injury or illegal burden	is threatened, and any such person or	determinate class of persons is by reason of poverty or disability or socially or economically disadvantaged position unable to approach the court for relief, any member of the public or social	action	group can maintain an	application for an appropriate direction, order or writ in the High Court under Article	226 and in case of breach of any fundamental right of such person or class of persons, in this	Court under Article	32 seeking judicial redress for the legal wrong or injury	caused to such person or determinate class of	per- sons." This Court also held in S.P. Gupta's case (supra) as also in the People's Union for Democratic Rights and Ors. v. Union of India,  1 SCR 456 and in Babdhua Mukti	Mor- cha's case (supra) that procedure being merely a hand-maden of justice it	should not stand in the way of access to justice to the weaker sections of Indian humanity and there- fore where the poor and the disadvantaged are concerned	who are barely eking out a miserable existence with their sweat and toil and who are victims of an exploited society without any access to	justice, this Court will not insist on a regular	writ petition	and even a letter addressed by a public	spirited individual or a social action group acting probono publico would suffice to ignite the jurisdiction of this Court. We wholly endorse this statement of the law in regard	to the broadening of locus standi and what-has	come to be known as epistolary jurisdiction.
So	far as the power of the court under Article 32 to gather	relevant material bearing on the issues	arising in this kind of litigation, which we may for the sake of	con- venience call.social action litigation, and	to appoint Commissions for this purpose is concerned, we endorse.	what one of us namely, Bhagwati, J., as he then was, has said in his Judgment in Bandhua Mukti Morcha's case (supra). We need not repeat what has been stated in that judgment.' It	has our full approval.
We are also of the view that this Court under Article 32(1) is free 830 to devise any	procedure appropriate	for the particular purpose	of the proceeding, namely, enforcement of a funda- mental	right and under Article 32(2) the Court has	the implicit power to issue whatever direction, order or writ is necessary in a given case, including	all incidental or ancillary power necessary to secure	enforcement of	the fundamental right. The power of the Court is not only	in- junctive in ambit, that is, preventing the infringement of a fundamental right, but it is also remedial in scope	and provides relief against a breach of the fundamental right already committed vide Bandhua Mukti Morcha's case (supra). If the Court were powerless to issue any direction, order or writ in cases where a fundamental right has already	been violated, Article 32 would be robbed of all its efficacy, because	then the situation would be that if a	fundamental right is threatened to be violated, the Court	can injunct such violation but if the violator is quick enough to	take action	infringing the fundamental right, he would escape from the net of Article 32. That would, to a large extent, emasculate the fundamental right guaranteed under Article 32 and render it impotent and futile. We must, therefore,	hold that Article 32 is not powerless to assist a person when he finds that his fundamental right has been violated. He	can in that event seek remedial assistance under Article 32. The power of the Court to grant such remedial relief may include the power to award compensation in appropriate cases. We are deliberately using the words "in appropriate cases" because we must make it clear that it is not in every	case where there is a breach of a fundamental right committed by	the violator that compensation would be awarded by the Court in a petition under Article 32. The infringement of the funda- mental	right must be gross and patent, that is, incontro- vertible and ex facie glaring and either such	infringement should be on a large scale affecting the fundamental rights of a large number of persons, or it should appear unjust or unduly	harsh or oppressive on account of theft	poverty or disability or socially or economically, disadvantaged posi- tion to require the person or persons affected by	such infringement to initiate and pursue action in the civil courts.	Ordinarily, of course, a petition under Article 32 should	not be used as a substitute for enforcement of	the right to claim compensation for infringement of a fundamen- tal right through the ordinary process of civil court. It is only in exceptional cases of the nature indicated by us above, that compensation may be awarded in a petition under Article 32. This is the principle on which this Court award- ed compensation in Rudul Shah v. State of Bihar, (AIR	1983 SC 1086). So also, this Court awarded compensation to	Bhim Singh,	whose fundamental right to personal	liberty	was grossly	violated by the State of Jammu and Kashmir. If we make a	fact analysis of the cases where compensation	has been 831 awarded	by this Court, we will find that in all the cases, the fact of infringement was patent and incontrovertible, the violation	was gross and its magnitude was such as to shock the conscience of the court and it would have	been gravely	unjust	to the person whose fundamental right	was violated, to require him to go to the civil court for claim- ing compensation.
The	next question which arises for consideration on these applications for compensation is whether Article 21 is available against Shriram which is owned by	Delhi Cloth Mills Limited, a public company limited by shares and which is engaged in an industry vital to public interest and	with potential to affect the life and health of the people.	The issue of availability of Article 21 against a private corpo- ration engaged in an activity which has potential to affect the life and health of the people was vehemently argued by counsel for the applicants and Shriram. It was	emphatically contended by counsel for the applicants, with the analogical aid of the American doctrine of State Action and the func- tional	and control test enunciated by this Court in	its earlier decisions, that Article 21 was available, as Shriram was carrying on an industry which, according to the Govern- ment's	own declared industrial policies, was ultimately intended to be carried out by itself, but instead of	the Government immediately embarking on that industry, Shriram was permitted to carry it on under the active	control	and regulation of the Government. Since the Government intended to ultimately carry on this industry and the mode of carry- ing on the industry could vitally affect public interest, the control of the Government was linked to regulating	that aspect of the functioning of the industry which could vital- ly affect public interest. Special emphasis was laid by counsel	for the applicants on the regulatory mechanism provided under	the Industries Development and Regulation Act, 1951 where industries are included in the schedule if they vitally affect public interest. Regulatory measures are also to be found in the Bombay Municipal Corporation	Act, the Air and Water Pollution Control Acts and now the recent Environment Act, 1986. Counsel for the applicants	also pointed	to us	the sizable aid in loans, land and other facilities granted by the Government to Shriram in carrying on the	industry. Taking aid of the American State Action doctrine, it was also argued before us on behalf of	the applicants that private activity, if supported, controlled or regulated by the State may get so entwined with govern- mental	activity as to be termed State action and it would then be subject to the same constitutional restraints on the exercise of power as the State.
On the other hand, counsel for Shriram cautioned against expanding Article 12 so as to bring within its ambit private corporations. He contended that control or regulation of a private	corporations functions by the State under general statutory law such as the Industries Development and Regula- tion Act, 1951 is only in exercise of police power of regu- lation	by the State. Such regulation does not	convert	the activity of the private corporation into that of the State. The activity remains that of the private corporation,	the State in its police power only regulates the manner in which it is to be carried on. It was emphasised that control which deems a corporation, an agency of the State, must be of	the type where the State controls the management policies of the Corporation, whether by sizable representation on the board of management	or by necessity of prior approval of	the Government before any new policy of management is adopted, or by any other mechanism. Counsel for Shriram also pointed out the inappositeness of the State action doctrine to	the Indian	situation. He said that in India the	control	and function test have been evolved in order to determine wheth- er a particular authority is an instrumentality or agency of the State and hence 'other authority' within the meaning of Article 12. Once an authority is deemed to he 'other author- ity' under Article 12, it is State for the purpose of	all its activities	and functions and the	American functional dichotomy by which some functions of an authority can be termed State action and others private action, cannot oper- ate here. The learned counsel also pointed out	that those rights	which are specifically intended by the	Constitution makers	to be available against private parties are so	pro- vided in the Constitution specifically such as Articles	17, 23 and 24. Therefore, to so expand Article 12 as to bring within its ambit even private corporations would be against the scheme of the Chapter on fundamental rights. In	order to deal with these rival contentions we think it is necessary that we should trace that part of the devel- opment	of Article 12 where this Court embarked on the	path of evolving criteria by which a corporation could be termed 'other authority' under Article 12.
obedience of which would be publishable as a criminal	of- fence,	that would be an indication that the concerned	au- thority	is 'State'. Shah, J., who delivered	a separate judgment agreeing with the conclusion reached by the majori- ty, preferred to give a slightly different meaning to	the expression 'other authorities'. He said that	authorities, constitutional	or statutory, would fail within the expres- sion "other authorities" only if they are invested with	the sovereign power of the State, namely, the power to	make rules and regulations which have the force of law. The ratio of this decision may thus be stated to be that a constitu- tional or statutory authority would be within the expression "other	authorities" if it has been invested with statutory power to issue binding directions to	third parties,	the disobedience of which would entail penal consequences or it has the sovereign power to make rules and regulations having the force of law.
This test was followed by Ray, C J, in Sukhdev v. Bhagat Ram,  1 SCC 421. Mathew, J. however, in the same	case propounded a broader test. The learned Judge emphasised that the concept of 'State' had undergone	drastic	changes in recent	years and today 'State' could not be conceived of simply	as a coercive machinery wielding the thunderbolt of authority; rather it has to be viewed mainly as a service corporation. He expanded on this dictum by stating that	the emerging principle appears to be that a public	corporation being an instrumentality or agency of the 'State' is subject to the same constitutional limitations as the	'State'	it- self. The preconditions of this are two, namely, that	the corporation is the creation of the 'State' and that there is existence of power in the corporation to invade the consti- tutional rights of the individual. This Court in Ram	anna Shetty v. International Airport Authority,  3 SCR 1014 accepted and adopted the rational of	instrumentality or agency	of State put forward by Mathew, J., and spelt	out certain	criteria with whose aid such an inference could be made. However, before we come to these criteria we think it necessary to refer to the concern operating	behind	the exposition of the broader test by Justice Mathew which is of equal relevance to us today, especially considering the fact that the definition under Article 12 is. an inclusive	and not an exhaustive definition. That concern is the need to curb arbitrary and unregulated power wherever and howsoever reposed.
sive or exhaustive test which would adequately answer	this question. There is no out and dried formula	which would provide	the correct division of corporations	into those which are instrumentalities or agencies of Government	and those which are not. The Court said whilst formulating	the criteria that analogical aid can be taken from the concept of State Action as developed in the United States wherein the U.S. Courts have suggested that a	private agency if supported by extra-ordinary assistance given by the State may be subject to the same constitutional limitations as the State.	It was pointed out that the State's general common- law and statutory structure under which its people carry on their private	affairs, own property and enter into	con- tracts,	each enjoying equality in terms of legal capacity, is not such assistance as would transform private conduct into State Action. "But if extensive and unusual financial assistance is	given and the purpose	of such assistance coincides with	the purpose for which	the corporation is expected to use the assistance and such purpose is of public character, it may be a relevant circumstance supporting an inference that	the corporation is an	instrumentality or agency of the Government".
On	the question of State control, the Court in	R.D. Shetty's case	(supra) clarified that some control by	the State would not be determinative of the question, since	the State has considerable measure of control under its police power over all types of business organisations. But a find- ing of	State financial support plus an unusual degree of control over the management and policies of the	corporation might lead to the characterisation of the operation as State Action.
Whilst deliberating on the functional criteria namely, that the corporation is carrying out a	governmental func- tion. the Court emphasised that classification of a function as governmental should not be done on earlier	day percep- tions but on what the State today views as an indispensable part of its activities, for the State may deem it as essen- tial to its economy that it owns and operate a railroad, a mill or an irrigation system as it does to own and operate bridges street lights or a sewage disposal plant. The Court also reiterated in R.D. Shetty's case (supra) what	was pointed	out by Mathew, J. in Sukhdev	v. Bhagatram	that "Institutions engaged in matters of high public interest or public	functions are by virtue of the nature of the func- tions performed government agencies. Activities which	are too fundamental to the society are by definition too impor- tant not to be considered government functions." The above discussion was rounded off by the Court in R.D.
"Where constitutional fundamentals vital to the	maintenance of human rights are at stake, functional realism and	not facial	cosmetics must be the diagnostic tool for constitu- tional law must seek the substance and not the form. Now it is obvious that the Government may through the instrumental- ity or agency of natural persons or it may employ the	in- strumentality or agency of judicial persons to carry out its functions. It is really the Government which acts through the instrumentality or agency of the corporation and	the juristic veil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the	Government ..... (for	if the Government acting through its officers is subject to certain constitu- tional	limitations it must follow a fortiorari that	the Government acting through the instrumentality or agency of a corporation should be equality subject to the same limita- tions".
On the canon of construction to be adopted for	interpreting constitutional guarantees the Court pointed out: "....	constitutional guarantees ... should not be allowed to be emasculated in their application by a narrow and	con- structed judicial interpretation. The Courts should be anxious to enlarge the scope and width of the fundamental 836 rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, so as to subject the Government in all its myriad activi- ties, whether through natural persons or through corporate entities to the basic obligation of the fundamental rights." In this case the Court also set at rest the controversy as to whether the manner in which a corporation is brought into existence had any relevance to the question whether it is a State instrumentality or agency. The Court said that it is immaterial for the purpose of determining whether a corpora- tion is an instrumentality or agency of the State or	not whether it is created by a Statute or under a statute:	"the inquiry has to be not as to how the juristic person is	born but why it has been brought into existence. The	corporation may be a statutory corporation created by statute or it	may be a Government company or a company formed under the Compa- nies Act, 1956 or it may be a society registered under	the Societies Registration Act, 1860 or any other similar stat- ute". It would come within the ambit of Article 12, if it is found to an instrumentality or agency of the	State on a proper assessment of the relevant factors.
"It is dangerous to exonerate corporations from	the need to have constitutional conscience, and so that inter- pretation, language permitting, which	makes	governmental agencies whatever their main	amenable to constitutional limitations must be adopted by the court as	against	the alternative of permitting them to flourish as an imperium in imperio". Som Prakash v. Union of India,  1 SCC 449. Taking the above exposition as our guideline, we	must now proceed to examine whether a private corporation such as Shriram	comes	within the ambit of Article 12 so as to be amenable to the discipline of Article 21.
In	order to assess the functional	role allocated to private corporation engaged in the manufacture of chemicals and fertilisers we need 837 to examine the Industrial Policy of the Government and	see the public interest importance given by the State to	the activity carried on by such private corporation. Under the Industrial Policy Resolution 1956 industries were classified into three categories having regard to	the part which the State would play in each of them. The first category was to be the exclusive responsibility of	the State. The second category comprised those industries which would be progressively State owned and in which the State would therefore generally take the initiative in establish- ing new undertakings but in which private enterprise would also be expected to supplement the effort of the State by promoting and development undertakings either on its own or with State participation. The third category would include all the remaining industries and their	future	development would generally be left to the initiative and enterprise of the private sector. Schedule B to the Resolution enumerated the industries.
Appendix I	to the Industrial Policy Resolution,	1948 dealing with the problem of State participation in industry and the conditions in which private enterprise should be allowed	to operate stated that there can be no	doubt	that the State must play a progressively active role in	the development of industries. However under the present condi- tions,	the mechanism and resources of the State may	not permit it to function forthwith in Industry as widely as may be desirable.	The Policy declared that for some time to come, the State could contribute more quickly to the	in- crease	of national wealth by expanding its present activi- ties wherever it is already operating and by concentrating on new units of production in other fields.
On these considerations the Government decided that	the manufacture of	arms and ammunition,	the production	and control of atomic energy and the ownership and management of railway	transport would be the exclusive monopoly of	the Central Government. The establishment of new undertakings in Coal, Iron and Steel, Aircraft manufacture, Ship building, manufacture of telephone telegraph and	wireless apparatus and mineral oil were to be the exclusive responsibility of the State except where in national interest the State itself finds it necessary to secure the co-operation	of private enterprise subject to control of the Central Government.
ral Government	was found necessary in	national interest. Among the eighteen industries so mentioned as requiring such Central	control. heavy chemicals and fertilisers stood included.
In order to carry out the objective of the Policy Reso- lution	the Industries (Development and Regulation) Act of 1951 was enacted which, according to its objects and	rea- sons, brought	under central control the development	and regulation of a number of important industries the activi- ties of which affect the country as a whole and the develop- ment of which must be governed by economic factors of	all India import.	Section	2 of the Act declares	that it is expedient in the public interest that the Union should	take under its control the industries specified in the First Schedule. Chemicals and Fertilisers find a place in	the First Schedule as Items 19 and 18 respectively. If an analysis of the declarations in the Policy Resolu- tions and the Act is undertaken, we find that the activity of producing chemicals and fertilisers is deemed by	the State to be an industry of vital public interest, whose public	import	necessitates that the	activity should be ultimately carried out by the State itself, in the interim period	with State support and under State control, private corporations may also be permitted to supplement the State effort. The argument of the applicants on the basis of	this premise was that in view of this declared industrial policy of the State, even private corporations manufacturing chemi- cals and fertilisers can be said to be engaged in activities which are so fundamental to the Society as to be necessarily considered government	functions. Sukhdev v.	Bhagat	Ram, Ramanna Shetty and Ajay Hasia (supra).
It	was pointed out on behalf of the applicants that as Shriram	is registered under the InduStries Development	and Regulation Act 1951, its activities are subject to extensive and detailed control and supervision	by the	Government. Under the Act a licence is necessary for the establishment of a new industrial undertaking or expansion of capacity or manufacture of	a new article by an	existing industrial undertaking carrying on any of the Scheduled Industries included in the First Schedule of the Act.	By refusing licence	for a particular unit, the Government	can prevent over concentration in a particular region or over-investment in a particular industry. Moreover, by its power to specify the capacity in the licence it can also prevent	over-devel- opment	of a particular industry if it has already reached target	capacity. Section 18 G of the Act empowers the	Gov- ernment	to control the supply, distribution, price etc. of the articles manufactured by a scheduled 839 industry and under Section 18A Government can assume manage- ment and control of an industrial undertaking engaged in a scheduled industry if after investigation it is found	that the affairs of the undertaking are being managed in a manner detrimental to	public interest and under Section 18AA in certain	emergent cases, take-over is allowed even without investigation.	Since Shriram is carrying on	a scheduled industry, it is subject to this stringent system of regis- tration	and licensing. It is also amenable.	to various directions that may be issued by the Government from time to time and it is subject to the exercise of the powers of	the Government under Sections 18A, and 18G.
ness of the doctrine of State action in the Indian context because, according to him, once an authority	is brought within	the purview of Article 12, it is State for all	in- tents and purposes and the functional dichotomy in America where certain activities of the same authority may be	cha- raterised as State action and others	as private action cannot be applied here in India. But so far as this argument is concerned, we must demur to it and point out that it is not correct to say that in India once a corporation is deemed to be 'authority', it would be subject to the consti- tutional limitation of fundamental rights in the performance of all its functions and that the appellation of 'authority' would stick to such corporation, irrespective of the func- tional context.
Before we part with this topic, we may point out	that this Court has throughout the last few years expanded	the horizon	of Article 12 primarily to	inject	respect	for human-rights and social conscience in our corporate struc- ture. The purpose of expansion has not been to destroy	the raison	d'eter of creating corporations but to	advance	the human rights jurisprudence. Prima facie we are not inclined to accept the apprehensions of learned counsel for Shriram as well-founded when he says that our including within	the ambit of Article 12 and thus subjecting to the discipline of Article 21, those private corporations whose activities have the potential of affecting the life and health of the	peo- ple, would deal a death blow to the policy of	encouraging and permitting private entrepreneurial activity. Whenever a new advance is made in the field of human rights, apprehen- sion is always expressed by the status quosits that it	will create enormous difficulties in the way of smooth function- ing of the system and affect its stability. Similar appre- hension was voiced when this Court In Ramanna Shetty's	case (supra) brought public sector corporations within the scope and ambit of Article 12 and subjected them to the discipline of fundamental rights. Such apprehension expressed by those who may be affected by any new and innovative expansion of human rights need not deter the Court	from widening	the scope of human rights and expanding their reach ambit, if otherwise it is possible to do so without doing violence to the language of the constitutional provision. It is through creative interpretation and bold innovation that the human rights jurisprudence has been developed in our country to a remarkable extent and this forward march of the human rights movement cannot be allowed to be halted by unfounded appre- hensions expressed by status quoists. But we do not propose to decide finally at the present stage whether a private corporation like Shriram would fall within the scope	and ambit of Article 12, because we have not had sufficient time to consider and reflect on this question in	depth-	The hearing of this case before us 842 concluded only on 15th December 1986 and we are called	upon to deliver our judgment within a period of four days, on 19th December 1986. We are therefore of the view that	this is not a question on which we must make any definite	pro- nouncement at this stage. But we would leave it for a proper and detailed consideration at a later stage if	it becomes necessary to do so.
We	must also deal with one other	question which	was seriously debated before us and that question is as to	what is the measure of liability of an enterprise which is	en- gaged in an hazardous or inherently dangerous industry, if by reason of an accident occurring in such industry, persons die or	are injured. Does the rule in Rylands	v. Fletcher apply or is there any other principle on which the liability can be	determined? The rule in Rylands v. Fletcher	was evolved	in the year 1866 and it provides that a person	who for his own purposes being on to his land and collects	and keeps there anything likely to do mischief if	it escapes must keep it at his peril and, if he falls to	do so, is prima facie liable for the damage which is	the natural consequence of its escape. The liability under this rule is strict	and it is no defence that the thing escaped without that person's wilful act, default or neglect or even that he had no	knowledge of its existence. This rule laid down a principle of liability that if a person who brings on to his land and collects and keeps there anything likely to do harm and such thing escapes and does damage to another, he is liable to compensate for the damage caused. Of course,	this rule applies only to non-natural user of the land and it does not apply to things naturally on the land or where	the escape	is due to an act of God and an act of a stranger or the default of the person injured or where the thing which escapes	is present by the consent of the person injured or in certain cases where there is statutory authority.	Vide Halsbury Laws of England, Vol. 45 para	1305.	Considerable case law has developed in England as to what is natural	and what is non-natural use of land and what are precisely	the circumstances in which this rule may be displaced. But it is not necessary for us to consider these decisions laying down the parameters of this rule because in a modern industrial society	with highly developed scientific knowledge	and technology where hazardous or inherently dangerous indus- tries are necessary to carry out part of the developmental programme. This rule evolved in the 19th Century at a	time when all these developments of science and technology	had not taken place cannot afford any guidance in evolving	any standard of liability consistent with	the constitutional norms and the needs of the present day economy	and social structure. We need not feel inhibited by this rule which was evolved in this context of a totally different kind of 843 economy. Law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country. As new situations arise the law has to be evolved in order to meet the chal- lenge of such new situations. Law cannot afford to remain static.	We have to evolve new principles and lay down	new norms Which would adequately deal with the new problems which arise in a highly industrialised economy. We cannot allow our judicial thinking to be constricted by reference to the law as it prevails in England or for the matter of that in any other foreign country. We no longer need	the crutches of a foreign legal order. We are certainly prepared to receive light from whatever source it comes but we	have to build up our own jurisprudence and we cannot	countenance an argument that merely because the new law does not recog- nise the rule of strict and absolute liability in cases of hazardous or dangerous liability or the rule as laid down in Rylands	v. Fletcher as is developed in	England recognises certain limitations and responsibilities. We in India cannot hold our hands back and I venture to evolve a new. principle of liability which English courts have not done. We have to develop	our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual	situation which has arisen and which is likely to arise in future on account of hazardous or inherently	dan- gerous	industries which are concommitant to an industrial economy, there is no reason why we should hesitate to evolve such principle of liability merely because it has not	been so done in England. We are of the view that an 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 nondelegable 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. Since the	persons harmed on account	of the hazardous or inherently	dangerous activity carried	on by the enterprise would not be in a position to isolate the process of operation from the hazardous prepara- tion of substance or any other related element that caused the harm must be held strictly liable for causing such	harm as a part of the social cost for carrying on the hazardous or 844 inherently dangerous activity. If the enterprise is permit- ted to carry on an hazardous or inherently dangerous activi- ty for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of	any accident arising on account of such hazardous or inherently dangerous activity as an appropriate item of its over-heads. Such hazardous or inherently dangerous activity for private profit	can be tolerated only on condition that	the enter- prise engaged	in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of	the carrying on of such hazardous or inherently dangerous activ- ity regardless of whether it is carried on carefully or not. This principle is also sustainable on the ground that	the enterprise alone has the resource to discover	and guard- against	hazards or dangers and to provide warning against potential hazards. We would therefore hold that where an enterprise is engaged in a hazardous or inherently dangerous activity and harm results to anyone on account of an acci- dent in the operation of such hazardous or inherently	dan- gerous	activity resulting, for example, in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident	and such liability is not subject to any of the exceptions which operate vis-a-vis the tortious principle of strict liability under the rule in Rylands v. Fletcher (supra). We	would also like to point out that the	measure of compensation in the kind of cases referred to in the preced- ing paragraph must be co-related to the magnitude and capac- ity of the enterprise because such compensation must have a deferent effect. The larger and more prosperous the enter- prise,	the greater must be the amount of compensation	pay- able by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise.
Since we are not deciding the question as	to whether Shriram is an authority within the meaning of Article 12 so as to	be subjected to the discipline	of the	fundamental right under Article 21, we do not think it would be justi- fied in setting up a special machinery for investigation of the claims for compensation made by those who	allege	that they have been the victims of oleum gas escape. But we would direct that Delhi Legal Aid and Advice Board to take up	the cases of all those who claim to have suffered on account of oleum gas and to file actions on their behalf in the appro- priate court for claiming compensation against Shriram. Such actions	claiming compensation may be filed by the Delhi Legal Aid and Advice Board.within two months from 845 today and the Delhi Administration is directed	to provide the necessary funds to the Delhi Legal Aid and Advice Board for the purpose of filing and prosecuting such actions.	The High Court will nominate one or more Judges as may be neces- sary for the purpose of trying such actions so that they may be expeditiously disposed of. So far as the issue of reloca- tion and other issues are concerned the writ petition	will come up for hearing on 3rd February, 1987.

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