COMPENDIUM OF SUMMARIES OF JUDICIAL DECISIONS IN ENVIRONMENT RELATED CASES

INDIA

India - Chemical Plant Closure, Liability of Company Officials

M.C. MEHTA AND OTHERS v. SHRIRAM FOOD and FERTILIZER INDUSTRIES and UNION OF INDIA
(OLEUM GAS LEAK CASE - II)

AIR 1987 SC 982
P.N. BHAGWATI C. J., D. P. MADAN and G. L. OZA. JJ.

Introduction

This was the second in a series of petitions that were filed in the Supreme Court following the leakage of gas from the chlorine and sulphuric acid plants at Shriram Fertilizers Industries in December 1985. The Company argued that every breach of the conditions specified in the previous Order should not warrant closure of the plant.

Held

The Court modified the conditions subject to which permission was granted to Shriram to re-open the chlorine plant in its order dated 17th February, 1986. The Court observed that if for any reason, Shriram does not comply with any of those conditions and is therefore unable to re-open the caustic chlorine plant, it will be open to Shriram to re-start the other plants in respect of which permission has been given by the Court by order dated 17th February, 1986, so long as it can do so without operating the caustic chlorine plant.

With regard to the liability of occupiers/officers, the Court restricted liability to an amount equivalent to their annual salary. The earlier Order was modified by holding that the Chairman/Managing Director were liable, except where "sabotage" or " an Act of God " is pleaded and proved.