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PETITIONER: M.C. MEHTA AND ANR.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT20/12/1986

BENCH: BHAGWATI, P.N. (CJ) BENCH: BHAGWATI, P.N. (CJ) MISRA RANGNATH OZA, G.L. (J) DUTT, M.M. (J) SINGH, K.N. (J)

CITATION:  1987 AIR 1086            1987 SCR  (1) 819  1987 SCC  (1) 395        JT 1987 (1)     1  1986 SCALE  (2)1188  CITATOR INFO :  F          1989 SC1642  (24)  RF         1990 SC 273  (28,43)  E&D        1992 SC 248  (13,14,15,16,28,100)

ACT:     Constitution  of India 1950--Articles 12  &  21--Private corporation-Engaged  in  industry vital to  public  interest with potential to affect life and health of  people--Whether ’other authority’--Extent of availability of Article 21.     Article  32--Jurisdiction and Power of  Court--Not  only injunctive  in ambit--Remedial in scope and provides  relief for  infringement of fundamental right--Power to award  com- pensation.     Public Interest Litigation--Maintainability  of--Whether letters    addressed   even   to   an    individual    judge entertainable--Whether    preferred    form    of    address applicable--Whether    letters    to   be    supported    by affidavits--Hyper-technical  approach to be avoided  by  the Court--Court  must  look  at  the  substance  and  not   the form--Court’s  power  to collect relevant  material  and  to appoint commissions.     Law  of Torts--Liability of an enterprise engaged  in  a hazardous  and inherently dangerous industry for  occurrence of  accident--Strict and absolute--Quantum  of  compensation payable  for  harm caused--Determination  of--Rule  laid  in Rylands v. Fletcher--Whether applicable in India.     Jurisprudence--Law--Should   keep  pace  with   changing socioeconomic  norms---Where a law of the past does not  fit in to the present context, Court should evolve new law.     Interpretation of Constitution--Creative and  innovative interpretation in consonance with human rights jurisprudence emphasised.     Interpretation  of statutes--Foreign  case  law--Supreme Court of India not bound to follow.

HEADNOTE:     The  petitioners, in this writ petition under  Art.  32, sought  a  direction  for closure of the  various  units  of

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Shriram Foods & Fertilizers 820 Industries  on  the ground that they were hazardous  to  the community.  During the pendency of the petition,  there  was escape  of oleum gas from one of the units of  Shriram.  The Delhi Legal Aid and Advice Board and the Delhi Bar  Associa- tion  filed  applications for award of compensation  to  the persons who had suffered harm on account of escape of oleum gas.     A Bench of three Hon’ble Judges while permitting Shriram to  restart its power plant as also other plants subject  to certain conditions, referred the applications for  compensa- tion  to  a larger Bench of five Judges  because  issues  of great  constitutional importance were involved, namely,  (1) What  is  the  scope and ambit of the  jurisdiction  of  the Supreme  Court  under  Art. 32 since  the  applications  for compensation are sought to be maintained under that Article; (2)  Whether Art. 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; and (3) What is the measure of liabil- ity  of  an enterprise which is engaged 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, (1866 Law Report 1  Excheq- uer 265) apply or is there any other principle on which  the liability can be determined. Disposing of the applications,     HELD: 1. The question whether a private corporation like Shriram would fall within the scope and ambit of Art. 12  so as  to be amenable to the discipline of Art. 21 is left  for proper  and  detailed consideration at a later stage  if  it becomes necessary to do so. [844F-G]     Rajasthan  Electricity Board v. Mohan Lal, [1967] 3  SCR 377;  Sukhdev  v.  Bhagwat Ram, [1975] 1  SCC  421;  Ramanna Shetty  v.  International Airport Authority,  [1979]  3  SCR 1014;  Ajay  Hasia v. Khalid  Mujib, [1981] 2  SCR  79;  Som Prakash  v. Union of India, [1981] 1 S.C.C. 449; Appendix  I to Industrial Policy Resolution, 1948; Industries  (Develop- ment  and Regulation) Act, 1951; Delhi Municipal  Act,  1957 Water  (Prevention and Control of Pollution) Act, 1974;  Air (Prevention  and Control of Pollution) Act,  1981;  Eurasian Equipment and Chemicals Ltd. v. State of West Bengal, [1975] 2 SCR 674; Rasbehari Panda v. St.ate, [1969] 3 SCR 374; Kas- turi  Lal  Reddy v. State of Jammu & Kashmir, [1980]  3  SCR 1338, referred to. 821     2.  The Delhi Legal Aid and Advice Board is directed  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  appropriate  Court for claiming  compensation  and  the Delhi Administration is directed to provide necessary  funds to the Board for the purpose. [844G-H; 845A]     3.(i)  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 regular  writ petition under Art. 226 in the High Court  and under Art. 32 in this Court, but also by addressing a letter to the Court. [828B-C; E-F]

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   3.(ii)  Even if a letter is addressed to  an  individual Judge  of the Court, it should be entertained,  provided  of course  it is by or on behalf of a person in custody  or  on behalf  of  a  woman or a child or a class  or  deprived  or disadvantaged persons. [829B-C]     3.(iii) Letters addressed to individual Justices of this Court  should  not be rejected merely because they  fail  to conform  to  the preferred form of address  nor  should  the Court  adopt a rigid stance that no letters will  be  enter- tained  unless  they are supported by an affidavit.  If  the Court  were  to  insist on an affidavit as  a  condition  of entertaining  the letters the entire object and  purpose  of epistolary jurisdiction would be frustrated because most  of the poor and disadvantaged persons will then not be able  to have  easy  access to the Court and even the  social  action groups will find it difficult to approach the Court.  [828H; 829B]     Bandhua Mukti Morcha v. Union of India & Ors., [1984]  2 SCR 67; S.P. Gupta v. Union of India, [1981] (Suppl) SCC  87 and  Union for Democratic Rights & Ors. v. Union  of  India, [1983] 1 SCR 456, relied upon.     4.(i)  Article 32 does not merely confer power  on  this Court  to issue 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  inci- dental and ancillary powers including the power to forge new remedies and fashion new strategies designed to enforce  the fundamental  rights. It is in realisation of this  constitu- tional obligation that this Court 822 has,  in the past, innovated new methods and strategies  for the  purpose  of  securing enforcement  of  the  fundamental rights, particularly in the case of the poor and the  disad- vantaged who are denied their basic human rights and to whom freedom and liberty have no meaning. [827F-828A]     4.(ii) The power of the Court is not only injunctive  in ambit,  that is, preventing the infringement of  fundamental right  but it is also remedial in scope and provides  relief against a breach of the fundamental right already committed. [830A-B]     4.(iii)  The power of the Court to grant  such  remedial relief may include the power to award compensation in appro- priate cases. The infringement of the fundamental right must be  gross and patent, that is incontrovertible  and  exfacie 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  op- pressing  on account of their poverty or disability  or  so- cially  or  economically disadvantaged position  to  require the  person  or  persons affected by  such  infringement  to initiate and pursue action in the Civil Courts. [830D; E-F]     4.  (iv) Ordinarily a petition under Art. 32 should  not be  used  as a substitute for enforcement of  the  right  to claim  compensation for infringement of a fundamental  right through  the ordinary process of Civil Court. It is only  in exceptional  cases  that compensation may be  awarded  in  a petition under Art. 32. [830F-G]     4.(v)  The applications for compensation in the  instant writ  petition are for enforcement of the fundamental  right to  life enshrined in Art. 21 of the Constitution and  while dealing  with  such applications the Court  cannot  adopt  a hyper-technical  approach  which would defeat  the  ends  of justice.  The Court must look at the substance and  not  the

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form.  Therefore, the instant applications for  compensation are maintainable under Art. 32. [827A-B]     Bandhua Mukti Morcha v. Union of India & Ors., [1984]  2 SCR  67; S.P. Gupta v. Union of India, [1981]  (Suppl.)  SCR 87;  Union for Democratic Rights & Ors. v. Union  of  India, [1983] 1 SCR 456 and Rudul Shah v. State of Bihar, AIR  1983 SC 1086, relied upon.     5.  The rule in Rylands v. Fletcher (supra) 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 823 damage to another, he is liable to compensate for the damage caused.  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 author- ity.  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.  In a modern industrial society with  highly  de- veloped scientific knowledge and technology where  hazardous or inherently dangerous industries are necessary to carry on as part of developmental programme, the Court need not  feel inhibited  by this rule merely because the new law does  not recognise the rule of strict and absolute liability in  case of an enterprise engaged in hazardous and dangerous  activi- ty. [842D-G] Halsburry Laws of England, Vol. 45 Para 1305, relied upon.     6.(i)  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. Law cannot  afford to  remain static. The Court cannot allow judicial  thinking to be constricted by reference to the law as it prevails  in England or in any other foreign country. Although this Court should be prepared to receive light from whatever source  it comes, but it has to build up its own jurisprudence,  evolve new principles and lay down new norms which would adequately deal  with the new problems which arise in a  highly  indus- trialised  economy. If it is found that it is  necessary  to construct  a new principle of law to deal with  -an  unusual situation  which has arisen and which is likely to arise  in future  on  account  of hazardous  or  inherently  dangerous industries  which are concommitant to an industrial  economy the  Court should not hesitate to evolve such principles  of liability merely because it has not been so done in England. [843A-E]     6(ii)  This  Court  has throughout the  last  few  years expanded the horizon of Art. 12 primarily to inject  respect for  human-rights and social conscience in corporate  struc- ture.  The purpose of expansion has not been to destroy  the raison  d’etre of creating corporations but to  advance  the human rights jurisprudence. The apprehension that  including within  the  ambit  of Art. 12 and thus  subjecting  to  the discipline  of  Art.  21 those  private  corporations  whose activities  have  the potential of affecting  the  life  and health of the people, would deal a death blow to 824 the  policy of encouraging and permitting private  enterpre- neurial activity is not well founded. It is through creative interpretation  and  bold innovation that  the  human-rights

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jurisprudence  has been developed in India to  a  remarkable extent  and this forward march of the  humanrights  movement cannot  be allowed to be halted by  unfounded  apprehensions expressed by status quoists. [841C-E]     7.(i)  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  abso- lute  non-delegable duty to the community to ensure that  if any  harm results to anyone, the enterprise must be held  to be  under  an obligation to provide that  the  hazardous  or inherently  dangerous  activity 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 irrespective of the  fact that  the enterprise had taken all reasonable care and  that the  harm  occurred  without any  negligence  on  its  part. [843E-G]     7.(ii)  If  the enterprise is permitted to carry  on  an hazardous  or inherently dangerous activity 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  activity as an appropriate  item  of  its overheads. The enterprise alone has the resource to discover and guard against hazards or dangers and to provide  warning against potential hazards. [844A-B]     7.(iii)  The  measure of compensation in  such  kind  of cases  must be co-related to the magnitude and  capacity  of the enterprise because such compensation must have a  deter- rent effect. The larger and more prosperous the  enterprise, the greater must be the amount of compensation payable by it for the harm caused on account of an accident in carrying on of  the  hazardous or inherently dangerous activity  by  the enterprise. [844E-F]     8. The historical context in which the American doctrine of  State action evolved in the united States is  irrelevant for the purpose of Indian Courts, especially in view of Art. 15(2)  of the Indian Constitution. But, it is the  principle behind the doctrine of State aid, control and regulation  so impregnating a private activity as to give it the colour  of State  action which can be applied to the limited extent  to which  it  can be Indianised and harmoniously  blended  with Indian constitutional 825 jurisprudence.  Indian Courts are not bound by the  American exposition of constitutional law. The provisions of American Constitution  cannot always be applied to Indian  conditions or to the provisions of Indian Constitution and whilst  some of the principles adumberated by the American decisions  may provide a useful guide, close adherence to those  principles while applying them to the provisions of the Indian  Consti- tution is not to be favoured, because the social  conditions in India are different. [840D-H]     Ramanna  Shetty  v.  International  Airport   Authority, [1979]  3 SCR 1014; Jackson v. Metropolitan Edison  Co.,  42 L.ed. (2d) 477; Air India v. Nargesh Mirza, [1982] 1 SCR 438 and  General Electric Co. Maratha v. Gilbert, 50  L.ed  (2d) 343, relied upon.

JUDGMENT:     ORIGINAL  JURISDICTION: Writ Petition (Civil) No.  12739 of 1985. (Under Article 32 of the Constitution of India.)

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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

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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., [1984] 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,  [1981] 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

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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, [1983] 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.     We  may  point out at this stage that in  Bandhua  Mukti Morcha’s  case (supra) some of us apprehending that  letters addressed  to individual justices may involve the  court  in frivolous  cases and that possibly the view could  be  taken that  such  letters do not invoke the  jurisdiction  of  the court  as a whole, observed that such letters should not  be addressed  to  individual justices of the court but  to  the Court  or to the Chief Justice and his companion judges.  We do  not  think  that it would be right to  reject  a  letter addressed  to an individual justice of the court  merely  on the  ground that it is not addressed to the court or to  the Chief  Justice and his companion Judges. We must not  forget that 829 letters would ordinarily be addressed by poor and  disadvan- taged  persons or by social action groups who may  not  know the proper form of address. They may know only a  particular Judge  who  comes from their State and  they  may  therefore address the letters to him. If the Court were to insist that the letters must be addressed to the court, or to the  Chief Justice and his companion Judges, it would exclude from  the judicial  ken  a large number of letters and in  the  result deny  access to justice to the deprived and vulnerable  sec- tions  of the community. We are therefore of the  view  that even if a letter is addressed to an individual Judge of  the court, it should be entertained, provided of course it is by or on behalf of a person in custody or on behalf of a  woman or a child or a class of deprived or disadvantaged  persons. We  may point out that now there is no difficulty in  enter- taining  letters  addressed  to individual  justice  of  the court,  because this Court has a Public Interest  Litigation Cell  to which all letters addressed to the Court or to  the individual justices are forwarded and the staff attached  to this Cell examines the letters and it is only after scrutiny by the staff members attached to this Cell that the  letters

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are placed before the Chief Justice and under his direction, they  are  listed before the Court. We must  therefore  hold that  letters addressed to individual justice of  the  court should  not be rejected merely because they fail to  conform to the preferred form of address. Nor should the court adopt a  rigid stance that no letters will be  entertained  unless they  are  supported by an affidavit. If the court  were  to insist  on an affidavit as a condition of  entertaining  the letters  the entire object and purpose of epistolary  juris- diction  would  be frustrated because most of the  poor  and disadvantaged  persons  will then not be able to  have  easy access  to the Court and even the social action groups  will find  it difficult to approach the Court. We may  point  out that the court has so far been entertaining letters  without an affidavit and it is only in a few rare cases that it  has been  found  that the allegations made in the  letters  were false. But that might happen also in cases where the  juris- diction of the Court is invoked in a regular way:     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

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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

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exercise of power as the State. 832     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.     In  Rajasthan Electricity Board v. Mohan Lal,  [1967]  3 SCR  377 this Court was called upon to consider whether  the Rajasthan  Electricity Board was an ’authority’  within  the meaning of the expression ’other authorities’ in Article 12. Bhargava,  J.  who delivered the judgment  of  the  majority pointed  out  that  the expression  ’other  authorities’  in Article  12 would include all constitutional  and  statutory authorities on whom powers are conferred by law. The learned Judge also said that if any body of persons has authority to issue directions, the dis- 833 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

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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, [1975] 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, [1979] 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.     In Ramanna D.  Shetty v. International Airport Authority (supra) this Court deliberating on the criteria on the basis of  which  to determine whether a corporation is  acting  as instrumentality or agency of Government said that it was not possible to formulate an all inclu- 834 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

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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. 835 Shetty’s  case  (supra) by enumerating  the  following  five factors namely, (1) financial assistance given by the  State and  magnitude  of  such assistance (2) any  other  form  of assistance  whether of the usual kind or  extraordinary  (3) control of management and policies of the corporation by the State-nature  and extent of control (4) State  conferred  or State  protected monopoly status and (5)  functions  carried out  by  the corporation, whether public  functions  closely related to governmental functions, as relevant criteria  for determining  whether a corporation is an instrumentality  or agency  of the State or not, though the Court took  care  to point  out that the enumeration was not exhaustive and  that it  was the aggregate or cumulative effect of all the  rele- vant factors that must be taken as controlling.     The  criteria evolved by this Court in Ramanna  Shetty’s case  (supra)  were applied by this Court in Ajay  Hasia  v. Khalid  Mujib, [1981] 2 SCR 79 where it was  further  empha- sised that: "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

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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  will thus be seen that this Court has not  permitted the corporate device to be utilised as a barrier ousting the constitutional control of the fundamental rights. Rather the Court has held:       "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,  [1981] 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

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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.      The  policy  resolution also made  mention  of  certain basic  industries of importance the planning and  regulation of which by tile Cent- 838 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-

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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.     Shriram is required to obtain a licence under the Facto- ries Act and is subject to the directions and orders of  the authorities  under the Act. It is also required to obtain  a licence for its manufacturing activities from the  Municipal authorities  under  the  Delhi Municipal Act,  1957.  It  is subject to extensive environment regulation under the  Water (Prevention  and Control) of Pollution Act, 1974 and as  the factory is situated in an air pollution control area, it  is also  subject to the regulation of the Air  (Prevention  and Control of Pollution) Act, 1981. It is true that control  is not exercised by the Government in relation to the  internal management policies of the Company. However, the control  is exercised on all such activities of Shriram which can  jeop- ardize  public interest. This functional control is of  spe- cial significance as it is the potentiality of the fertiliz- er industry to adversely affect the health and safety of the community  and  its being impregnated with  public  interest which perhaps dictated the policy decision of the Government to ultimately operate this industry exclusively and  invited functional  control.  Along with this  extensive  functional control, we find that Shriram also receives sizable  assist- ance  in  the  shape of loans and  overdrafts  running  into several crores of rupees from the Government through various agencies. Moreover, Shriram is engaged in the manufacture of caustic soda, chlorine etc. Its various units are set up  in a  single complex surrounded by thickly populated  colonies. Chlorine gas is admittedly dangerous to life and’ health. If the  gas  escapes either from the storage tank or  from  the filled  cylinders or from any other point in the  course  of production, the health and wellbeing of the people living in the  vicinity  can be seriously affected.  Thus  Shriram  is engaged in an activity which has the potential to invade the right  to life of large sections of people. The question  is whether  these factors are cumulatively sufficient to  bring Shriram  within the ambit of Article 12. Prima facie  it  is arguable  that  when the States’ power  as  economic  agent, economic entrepreneur and allocator of economic benefits  is subject to the limitations of fundamental rights. (Vide 840 Eurasian  Equipment  and  Chemicals Ltd. v.  State  of  West Bengal, (1975) 2 SCR 674, Rashbehari Panda v. State,  [1983] 3 SCR 374, Ramanna Shetty v. International Airport  Authori- ty,  (supra) and Kasturilal Reddy v. State of Jammu &  Kash- mir,  [1980]  3 SCR 1338) why should a  private  corporation under  the  functional control of the State  engaged  in  an activity which is hazardous to the health and safety of  the community  and is imbued with public interest and which  the State  ultimately  proposes  to exclusively  run  under  its

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industrial  policy, not be subject to the same  limitations. But  we do not propose to decide this question and make  any definite  pronouncement upon it for reasons which  we  shall point out later in the course of this judgment.     We  were  during the course of arguments,  addressed  at great  length by counsel on both sides on the American  doc- trine  of  State  action. The  learned  counsel  elaborately traced the evolution of this doctrine in its parent country. We are aware that in America since the Fourteenth  Amendment is available only against the State, the Courts, in order to thwart racial discrimination by private parties, devised the theory of State action under which it was held that wherever private activity was aided, facilitated or supported by  the Slate  in  a  significant measure, such  activity  took  the colour of State action and was subject to the constitutional limitations  of  the Fourteenth Amendment.  This  historical context in which the doctrine of State action evolved in the United States is irrelevant for our purpose especially since we  have  Article 15(2) in our Constitution. But it  is  the principle  behind  the doctrine of State  aid,  control  and regulation so impregnating a private activity as to give  it the  colour  of State action that is of interest to  us  and that  also to the limited extent to which it can be  Indian- ized and harmoniously blended with our constitutional juris- prudence.  That  we in no way consider  ourselves  bound  by American  exposition  of constitutional law is  well  demos- trated  by  the fact that in Ramanna  Shetty,  (supra)  this Court  preferred  the  minority opinion of  Douglas,  J.  in Jackson v. Metropolitan Edison Company, 42 L.ed. (2d) 477 as against  the majority opinion of Rehnquist, J. And again  in Air  India  v. Nargesh Mirza, [1982] 1 SCR  438  this  Court whilst  preferring  the minority view  in  General  Electric Company  Martha v. Gilbert, 50 L.ed. (2d) 343 said that  the provisions  of  the American Constitution cannot  always  be applied  to  Indian conditions or to the provisions  of  our Constitution and whilst some of the principles adumbrated by the  American  decisions may provide a useful  guide,  close adherence  to  those principles while applying them  to  the provisions  of our Constitution is not to be  favoured,  be- cause  the social conditions in our country  are  different. The learned counsel for Shriram stressed the inapposite- 841 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

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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

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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

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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. A.P.J.                                       Petition   dis- posed of. 846