Gujarat High Court
Unipol Plastics Industries Pvtltd vs Malhotra Steel Industries Gujarat ... on 24 February, 2020
Author: Sonia Gokani
Bench: Sonia Gokani
C/FA/146/2002 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 146 of 2002
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UNIPOL PLASTICS INDUSTRIES PVTLTD
Versus
MALHOTRA STEEL INDUSTRIES GUJARAT PVT.LTD
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Appearance:
MR PARITOSH CALLA(2972) for the Appellant(s) No. 1
MR JAY SHAH for HL PATEL ADVOCATES (2034) for the Defendant(s) No.
1
MR ASIM J PANDYA(542) Senior Advocate for the Defendant(s) No. 1
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CORAM: HONOURABLE MS JUSTICE SONIA GOKANI
Date : 24/02/2020
ORAL ORDER
1. Appellant - M/s. Unipol Plastics Industries Pvt. Ltd. is the original defendant whereas the respondent - M/s. Malhotra Steel Industries Gujarat Pvt. Ltd. is the original plaintiff. They shall be respectively addressed as plaintiff and defendant in this appeal for the sake of convenience.
2. The facts in the capsulized form leading to the present appeal are as follows:-
2.1. The Civil Suit No. 2008 of 1997 came to be preferred by the plaintiff seeking recovery of compensation from the defendant for the damages suffered by it. The plaintiff is a private limited company registered under the Companies Act. It Page 1 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER has its registered office and factory at Odhav, Ahmedabad. 2.2. The defendant is a private limited company having its registered office at Ashram Road and the factory at Odhav Road in the vicinity and the factory of the respondent. 2.3. It is stated by the plaintiff in the plaint that on 21.06.1986 the explosion took place in the defendant's factory which is situated adjacent to the factory of the plaintiff, at around 4:15 pm. This resulted into one and half tonne of the tank blown of in the defendant's factory and the lid fell in the premise of the plaintiff's factory which crushed the head of one worker namely Kavoram Harji who died on the spot. It has further caused damage to the machines, trolly, twisting machine and glasses of the factory premises of the plaintiff. 2.4. According to the plaintiff, the damage caused to the machinery was to the tune of Rs. 1,00,000/- and it could not work for one and half shifts, which also resulted into loss of production to the tune of Rs. 75,000/-.
2.5. The plaintiff addressed a registered notice to the defendant on 18.07.1986. No reply to the same was given.
Resultantly, the plaintiff chose to prefer the civil suit for damage bifurcating the same as Rs. 1,00,000/- towards the machinery, Page 2 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER Rs. 75,000/- towards production loss and Rs. 75,000/- in respect of wages paid to the employees. In all the sum of Rs. 2,50,000/- in a suit dated 13.04.1987 was demanded. This was also accompanied by various documentary evidences. 2.6. On issuance of summons, the respondent appeared and filed its written statement at Exh. 12 denying specifically and categorically all the averments and allegations made in the plaint. It did not of course, challenge the fact that defendant is a private limited company and registered under the Companies Act.
2.7. It is the say of the defendant that at the place of the factory the defendant installed M.S.Storage Tank as required and approved by the factory inspector which was meant for storing the Butanol which is one kind of alcoholic product. It was as per the norms and standard as prescribed by the authority. The tank was supplied by one M/s. Presels Engineers, Odhav, Ahmedabad, who is an expert in manufacturing such kind of tank. The normal evaporating temperature of Butanol is 45 Degree Celsius (DC). There were some repairs for which the contract was given and the work had been carried out safely by the contractor on another tank prior to work on the subject tank in which the accident has occurred. The contractor also Page 3 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER was instructed to do the needful if so required and the instructions had been dully complied with.
2.8. It is stated that though the similar work had been carried out and completed safely, due to high atmospheric temperature, the explosive mixture is suspected to have been developed inside the discharge pipeline and which possibly contained the residual Butanol which might have caught the welding spark causing ignition and ultimately the explosion took place.
3. The trial Court after examining the pleadings had framed the issues and answered the same which are as follows:-
"1. Whether the suit is bad for non-joinder and mis-joinder of necessary parties?
2. Whether the plaintiff proves that there was an explosion in the factory of the defendant and as a result thereof a lid having weight of about one and half tone of tank was blown as alleged?
3. Whether the plaintiff proves that this accident occurred due to negligence on the part of the defendant?
4. Whether the plaintiff proves that due to the accident heavy damage was caused to the machines and factory premises of the plaintiff as alleged? Further as a result thereof whether it is proved that the plaintiff could not work in the factory resulting in the loss of production as alleged?
5. Whether the defendant proves that the defendant had taken proper care for the safety as Page 4 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER alleged?
6. Whether the defendant proves that the explosion was caused due to high temperature and not due to any negligence?
7. Whether the plaintiff is entitled to recover the suit claim or any amount?
3.1. The trial Court has answered the above questions as below:-
1. In negative.
2. In affirmative.
3. In affirmative.
4. In affirmative.
5. In negative.
6. In negative.
7. As per final order.
4. Both the sides have adduced respective evidences and thereafter on hearing both the sides extensively, the Court deemed it fit to award the damages to the tune of Rs. 63,280/- where the amount of Rs. 40,000/- has been given towards damages to the machinery, Rs. 20,000/- for the wages given to the 25 workers in a shift which had been idle wages paid to the person and Rs. 3,280/- also the idle wages to the workers of another shift. The Court did not find any loss of production and therefore, nothing had been given on that count. The total amount given was Rs. 63,280/-. The decree accordingly came to be drawn. It is this grant of compensation in the judgment and decree which has been challenged by the appellant - original Page 5 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER defendant.
5. While admitting the appeal by an order dated 18.06.2002, (Coram:- Mr. N.G.Nandi & Mr. H.K.Rathod, JJ.) on the Civil Application for stay, the Court has directed the original defendant to deposit the entire decretal amount with cost and interest. The same has been deposited and lying with the registry. At the time of preferring application under Order 41 Rule 22 of the Code of Civil Procedure, it is urged that the trial judge since has failed to appreciate many of the instances, the Court admitted the same on 05.05.2009.
6. This Court has heard learned advocate Mr. Paritosh Calla appearing with learned advocate Mr. Aditya Choksi for the appellant who has argued along the line of memo of the appeal and has urged that the Court below has erred seriously in not appreciating the evidence which has been adduced. It is further urged that the amount granted is without appreciating the evidence. There is no negligence on the part of the appellant - original defendant and hence, the decretal amount ought not to have been granted.
7. So far as cross objections are concerned, according to the defendant, they are not to be entertained in as much as no case Page 6 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER is made out at all for the additional amount of damages to be given.
8. According to the original plaintiff, the amount granted by way of compensation is only after the detailed discussion of the evidence of both the sides and also on the settled principle of law. There is no requirement for the appellate Court to re- appreciate the appeal when there is no error much less any manifest illegality. It is further the say of the learned advocate that there are additional aspects which have been made out by the trial Court which would necessitate the grant of additional compensation to the plaintiff.
9. Having thus heard both the sides and also on considering the fact that it is a detailed meticulously examined evidence and well considered decision on the part of the trial Court hence, there is absolutely no requirement either to entertain the appeal or cross objections for the following reasons.
10. The trial court has extensively dealt with each issue by referring to the pleadings and the evidence adduced orally as well as documentary and it has also by extensive exercise of evaluating the material, decided the suit by partly allowing the same. It found the appellant - plaintiff entitled to the amount of Page 7 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER Rs. 63,280/- along with interest at the rate of 6% per annum. The undisputed facts noted by the Court are as follows:-
10.1. The incident has occurred in the premise of defendant on 21.06.1986 which blew the storage tank and had fall in the factory premise of the defendant. The question, the Court was needed to determine that was it a case of pure accident or any negligence on the part of the plaintiff opponent.
The storage tank, as per the witness examined for and on behalf of the defendant, stated that it was prepared out of special MS material which was approved by the industry inspector before the same was put to use. The contractor who was handed over the work for executing the temperature over the storage tank was also well experienced. It is a matter of record that the chemical like Butanol was stored and therefore, the necessary precautions are a must. Before the work was undertaken, the quantity of the chemical in the tank had reduced. It was a chemical with inflammable character. This chemical also gets evaporated at the temperature of 38DC. What the defendant overlooked was a climatic changes in the summer and its impact. If the quantity of chemical Butanol stored in the storage tank, as per the say of the defendant got reduced, there was no reason as to why this could have reduced and there was no way Page 8 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER why the compressor is rise in the tank leading to explosion. 10.2. It is quite obvious that the Court categorically held that the defendant failed to take proper care for the safety and it cannot be said that explosion was caused due to higher temperature. The Court categorically held that the defendant ought to have taken more care if they were knowing about the characteristic of chemical stored and the climatic effect the said chemical may have in the heat of summer. The Court, therefore, in clear terms held that it was not a case of no negligence on the part of the defendant. It, on the contrary, held that the plaintiff succeeded in establishing that the defendant failed to take requisite care particularly while storing the chemical which has a very peculiar characteristic and which would have changes due to heat and work of fabrication being carried out in the summer. Normally the evaporating temperature of the Butanol is 45DC at tank pressure. The contention on the part of the defendant that there was some reparation in the tank for which the contract was given, such work had been already carried out safely by the contractor on another tank and all throughout, it has been maintained that explosion was due to high temperature and not on account of any negligence on the part of the defendant. The stand was also emphasised that the tank prepared and installed Page 9 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER in the factory was inspected by the factory inspector and it was also approved and sanctioned by the authority concerned. All averments of the plaintiff of itself having incurred the loss on account of the falling of lid in its factory premise has been categorically and emphatically denied.
11. On the first issue, this Court notices that it is of non- joinder of the party. The question was in respect of independent contractor who was already engaged for the purpose of putting shelter over the tank. However, the plaintiff could not be naturally aware of any agreement between the defendant and the independent contractor whereby, the work of fabrication was handed over as averred by the defendant. The defendant being the principal, the onus is always upon him and he may get the work done through any agency. The agency, if at all, was negligent, it is ordinarily the liability of the principal. Whereas in the case on hand, there was no clarity with regard to the nature of agreement for the purpose of fabrication or for placing roof over the tank, therefore, the Court chose not to acceded to the contention of the defendant and the suit was barred for mis- joinder of the parties.
12. This Court does not find any error much less any illegality in the Court arriving at such conclusion. It is one thing to Page 10 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER contend in the written statement and it is different aspect to prove such aspect. As can be noticed from the written statement and also the submissions made, the defendant insisted on the contractor to be responsible for having handed over the work of fabrication to it. As rightly held by the Trial Court, for even the fault of the independent contractor to whom the contract work had been given for carrying out the fabrication work, there could be no vicarious liability. It is ordinarily the liability of the defendant himself.
13. It is not to be forgotten that the tank storing potent chemical was of the defendant and also stored in the premise owned by the defendant. The law which is quite clear right from Rylands vs. Fletcher (1868) UKHL1, a decision by the House of Lords establishing clearly the rule of strict liability that 'the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril,and, if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape.' 13.1. It is also to be remembered at this stage that the Apex Court evolved a more stringent rule of strict liability than the Rylands Versus Fletcher by terming it as rule of absolute liability Page 11 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER without limitations or exceptions that a person who allows a dangerous element on their land which it know can cause damage or injury to the person, shall need to be responsible and liable for any damage that may be caused because of that element. Apt would be refer to the decision of Apex Court in case of M.C.Mehta vs. Union of India [AIR 1987 SC 1086], where while discussing the principle Rylands vs. Fletcher extensively, the Court held that the said principle in Morden times of science and technology was not suitable and the same shall need to be replaced by the rule of absolute liability.
13.2. Apt would be to reproduce profitably the ratio laid down in this case which also later on stamped by the Apex Court in Charan Lal Salu v.Union of India [AIR 1990 SC 1480] terming that as 'absolute and non-delegable' and pointed out that the enterprise cannot escape liability by showing that it has taken a reasonable care and there was no negligence on its part. 13.3. In M.C.Mehta v.Union of India (supra) the Apex court held that 'This, rule(Ryland v.Fetcher) 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 Page 12 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER 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.' Page 13 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER 13.4. Thus, the Apex Court evolved this principle of absolute liability for the harm caused by dangerous substance holding further that, '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.'
14. Coming to the issue No. 2, there exists sufficient material and it was not in dispute that the explosion took place on 21.06.1986 in the factory of the defendant. It is also not challenged or questioned that as a result thereof, the lid of the storage tank was blown and it fell in the factory premise of the Page 14 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER plaintiff. Therefore, the Court has rightly held that the issue no.2 did not require much deliberation and held to be proved.
15. So far as issue nos. 3, 5 and 6 are concerned, as to whether the accident occurred due to negligence on the part of the defendant and whether the defendant took proper care of safety or whether the defendant proved that the explosion was due to the rise in the temperature and not due to any negligence, have been discussed by the Trial Court jointly on facts as well as on law. While so doing, evidence of witnesses have been discussed at length.
15.1. The storage tank prior to its utilization had been examined by the factory inspector. Mr. Arun Parikh examined for and on behalf of the defendant who had stated that Butanol is a chemical which has temperature of 38DC and it got evaporated at 45DC. Therefore, to protect such storage tank, more particularly, during the summer time and the rainy season, it was a very vital aspect. The contractor was quite well experienced and he carried such work in the past also. One of the defenses raised by the defendant was that unless the negligence is proved, there could be no damages. It was also the case that this was a case of accident and not negligence at all. Moreover, the court cannot be oblivious of the fact that the Page 15 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER defendant dealt with the dangerous and hazardous chemical which even if done with licence would impose an absolute liability.
16. This Court noticed that extensively the Trial Court has held as to how the defendant has overlooked and neglected what was ordinarily its responsibility. Knowing fully well that it had been storing Butanol and the same has a characteristic of evaporating at 45 degree centigrade, all possible care ought to have been taken while storing the same. Whatever requisite precautions which are necessary to ensure that the evaporating temperature does not exceed a particular temperature, it could have taken. To say that merely on hiring of contractor, was sufficient where the contractor could be held responsible is surely not to be countenanced. The Court committed no mistake much less any illegality in holding that the plaintiff succeeded in proving negligence on the part of the defendant and the defendant could neither dislodge the proof nor established that it had taken the necessary and requisite care for safety and in what manner it can wriggle out of principle of absolute liability.
17. This brings this Court to the last issue as to how to quantify the damage which has been caused to the plaintiff. The claim of loss/damage to the machinery was quantified by the Page 16 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER plaintiff at Rs. 1,00,000/-. The manager of the plaintiff in its deposition at Exh. 30 stated that the Twisting Machine was totally destroyed. Since the same was smashed and the cost of that machine was Rs. 80,000/- to 90,000/-, it was not reparable. The workers working on this machine had also received injuries and one of them had expired right on the spot. The Register / Muster Roll for the attendance of the workers on that particular day i.e. on 21.06.1986, the date of accident, had shown absence of all concerned. Everything got disrupted when the machinery got damaged. The plaintiff had neither purchased not replaced the Twisting Machine. There was no way, the Court find, for placing of the same. At the same time, it is also not the case where no damage was caused.
17.1. The amount of Rs. 40,000/- for the damage of machinery was quantified by the Court.
17.2. For the idle wages to be paid to the workers for two days' in absence of any functioning of the factory also had been carefully examined. The Trial Court reiteratively held that what concerns was the minimum wages calculated for two days coming to Rs. 3,280/-. It eventually chose to award Rs. 20,000/- for the loss of wages.
Page 17 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER 17.3. The Trial Court calculated that on 21.06.1986 the work was completely disrupted and 50 workers in shift A and 25 workers in shift B if taken to have been paid, it would come to Rs. 1500, and the seven workers of the twisting department would have been paid Rs. 140/-, the total wages which would have been paid for one day would come to Rs. 1640/- and since two days' work was disrupted, it quantified the said amount to Rs. 3280/-. Thus, the amount of Rs. 40,000 and Rs. 3280/- respectively for damage to the machinery and minimum wages calculated for two days when are looked into, additionally, the Court also calculated the loss of wages to the tune of Rs. 20,000/- in a conservative manner. There were 55 workers in shift A and 26 workers in shift B in the rolling section. It also further clarified that this amount by way of loss of damages has assessed on the basis of material produced on record which reflected some discrepancy and it accordingly directed the total amount of Rs. 63,280/-.
18. This Court notices that in a matter like this, when there is a requirement of quantifying the amount of damages, the law is quite clear, however, what is required is to apply the law to the facts in each case. In the instant case, when the same had been done by the Trial Court, it has not committed any illegality nor Page 18 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020 C/FA/146/2002 ORDER his calculation as such would deserve any indulgence.
19. The Court noticed that there is also an Appeal filed by the plaintiff for enhancement of the amount. From the evidence which has been adduced, there is hardly any scope for such enhancement, whereas, the amount which has been awarded by way of a decree is also after due consideration of overall facts and circumstances and it is not such an amount which also requires any kind of further indulgence. Resultantly, both the appeals are dismissed.
20. The amount of decree which has been directed to be deposited with this Court shall be disbursed in favour of the plaintiff by way of account-payee-cheque or by directly transferring in its account. Appeal is accordingly dismissed.
(SONIA GOKANI, J) Bhoomi Page 19 of 19 Downloaded on : Mon Jun 15 03:28:13 IST 2020