Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS 7114-15 OF 2003

Municipal Corporation of Delhi, Delhi        … Appellant

Vs.

Association of Victims of Uphaar Tragedy & Ors.                 … Respondents

With CA 7116/2003 & CA 6748/2004  

J U D G M E N T

R.V. Raveendran, J.

These  appeals  are  filed  against  the  judgment  dated  24.4.2003  of  a  

division bench of the Delhi  High Court  in the Uphaar Cinema tragedy. CA  

No.7114-15/2003 is by the Municipal Corporation of Delhi (for short ‘MCD’).  

CA No.7116/2003 is by the Licensing Authority (Commissioner of Police). CA  

No. 6748/2004 is by M/s.Ansal Theatre and Clubotels Pvt. Ltd., the owners of  

the Uphaar Cinema Theatre (for short the ‘theatre owner’ or ‘Licensee).

2. These appeals relate to the fire at Uphaar Cinema Theatre in Green Park,  

South Delhi on 13.6.1997, resulting in the death of 59 patrons and injury to 103  

patrons. During the matinee show of a newly released film on 13.6.1997, the  

patrons of the cinema hall which was full were engrossed in the film. Shortly  

after the interval, a transformer of Delhi Vidyut Board installed in the ground  

floor parking area of Uphaar Cinema, caught fire. The oil from the transformer  

leaked and found its way to the passage outside where many cars were parked.  

Two cars were parked immediately adjoining the entrance of the transformer  

room. The burning oil spread the fire to nearby cars and from then to the other  

parked cars. The burning of (i) the transformer oil (ii) the diesel and petrol from  

the parked vehicles (iii) the upholstery material, paint and other chemicals of  

the vehicles and (iv) foam and other articles stored in the said parking area  

generated  huge  quantity  of  fumes  and  smoke  which  consisted  of  carbon  

monoxide  and  several  poisonous  gases.  As  the  ground  floor  parking  was  

covered all round by walls, and the air was blowing in from the entry and exit  

points,  the smoke and noxious fumes/smoke could not find its  way out into  

open atmosphere and was blown towards the staircase leading to the balcony  

exit.  On account of the chimney effect,  the smoke travelled up. Smoke also  

travelled to the air-conditioner ducts and was sucked in and released into the  

auditorium. The smoke and the noxious fumes stagnated in the upper reaches of  

the auditorium, particularly in the balcony area. By then the electricity went off  

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and the exit signs were also not operating or visible. The patrons in the balcony  

who were  affected  by the  fumes,  were  groping in  the dark to  get  out.  The  

central gangway in the balcony that led to the Entrance foyer could have been  

an effective and easy exit, but it was closed and bolted from outside, as that  

door  was  used only  for  entry  into the balcony  from the  foyer.  The patrons  

therefore groped through towards  the only  exit  situated  on the  left  side  top  

corner of the balcony. The staircase outside the balcony exit which was the only  

way out was also full of noxious fumes and smoke. They could not get out of  

the staircase into the foyer as the door was closed and locked. This resulted in  

death of 59 persons in the balcony and stairwell due to asphyxiation by inhaling  

the noxious fumes/smoke. 103 patrons were also injured in trying to get out.

3. First Respondent is an association of the victims of Uphaar Tragedy (for  

short  the  ‘Victims  Association’  or  ‘Association’).  The  members  of  the  

Association are either those who were injured in the fire or are relatives/legal  

heirs of those who were killed in the fire. The Association filed a writ petition  

before  the Delhi  High Court.  They highlighted the shocking state  of  affairs  

existing in the cinema building at the time of the incident and the inadequate  

safety arrangements made by the owners. They described the several violations  

by the owners of the statutory obligations placed on theatre owners under law,  

for  prevention of fire hazards in public places.  They highlighted the acts of  

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omission and commission by the public  authorities  concerned namely  Delhi  

Vidyut Board (‘DVB’ for short), MCD Fire Force and the Licensing Authority.  

They  alleged that  these  authorities  not  only  failed  in  the  discharge  of  their  

statutory obligations,  but acted in a manner which was prejudicial  to public  

interest by failing to observe the standards set under the statute and the rules  

framed for the purpose of preventing fire hazards; that they issued licenses and  

permits in complete disregard of the mandatory conditions of inspection which  

were  required  to  ensure  that  the  minimum safeguards  were  provided in  the  

cinema theatre. They pointed out that most of the cinema theatres were and are  

being permitted to run without any proper inspection and many a time without  

the  required  licenses,  permissions  and  clearances.  They  therefore,  sought  

adequate  compensation  for  the victims of  the tragedy and punitive damages  

against the theatre owner, DVB, MCD, Fire Force and the Licensing Authority  

for  showing  callous  disregard  to  their  statutory  obligations  and  to  the  

fundamental  and  indefeasible  rights  guaranteed  under  Article 21 of  the  

Constitution  of  India,  of  the theatre  going public,  in  failing  to  provide  safe  

premises,  free  from  reasonably  foreseeable  hazards.  They  claimed  

compensation and other reliefs as under:-

(a)  award damages of Rs.11.8 crores against the respondents,  jointly and  

severally,  to  the  legal  heirs  of  the  victims  who  lost  their  lives  (listed  in  

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Annexure B of the writ petition) through the Association with the direction to  

equally distribute the same to the first degree heirs of all the victims;  

(b)  award damages of Rs.10.3 crores against the respondents,  jointly and  

severally,  to  the  injured  (listed  in  Annexure  C  to  the  writ  petition)  to  be  

distributed evenly or in such manner as may be considered just and proper;  

(c)  award punitive damages of Rs.100 crores to the association for setting  

up and running a Centralized Accident and Trauma Services and other allied  

services in the city of Delhi; and to direct Union of India to create a fund for  

that purpose;

(d) to monitor the investigation from time to time, to ensure that no person  

guilty of any of the offences is able to escape the clutches of law and that the  

investigation  is  carried  out  as  expeditiously  as  possible  in  a  free  and  fair  

manner; and

(e) direct the Union of India to ensure that no cinema hall in the country is  

allowed to run without license granted after strictly observing all the mandatory  

conditions  prescribed  under  the  laws and to  further  direct  them to  stop  the  

operation of all cinema halls and to permit the operation only after verification  

of the existence of a valid license/permit by the licensing authority, under the  

Cinematograph Act.

Relevant Legal Provisions

4. The Cinematograph Act, 1952 provides for regularization of exhibition of  

Cinemas.  Section  10  provides  that  a  cinema  theatre  cannot  be  run  without  

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obtaining license from the Licensing Authority. Section 11 provides that the  

Licensing Authority shall be the District Magistrate. After the coming into force  

of the Commissioner of Police system in Delhi in 1978, the Commissioner of  

Police was notified as the licensing authority under the proviso to section 11 of  

the Act. Licenses to be granted to a cinema theatre under section 10 could be  

either annual or temporary. All cinema theatres in Delhi were required to get  

their  licenses  renewed annually  by  moving  an  application  in  writing  to  the  

licensing  authority.  While  granting  renewal,  the  licensing  authority  was  

required to satisfy itself that the licensee had complied with the provisions of  

the Cinematograph Act and the Delhi Cinematograph Rules framed thereunder.  

5. When the cinema theatre was constructed in the year 1973, the Delhi  

Cinematograph Rules, 1953 were regulating the procedure of granting licences,  

inspection  and  conditions  of  licences.  After  the  coming  into  force  of  the  

Commissioner  of  Police system,  the Delhi  Cinematograph Rules 1983 came  

into force. Rule 3 provides that license shall be granted in respect of a building  

which is permanently equipped for Cinematograph exhibition and in respect of  

which the requirements set forth in first schedule of the Rules were fulfilled.  

The  first  schedule  to  the  Rules  laid  down  the  specifications  with  which  

compliance must be made before any annual license was granted in respect of  

any  building.  Besides  other  things,  the  schedule  lays  down  specifications  

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regarding number of persons accommodated in the cinema hall and the manner  

in which the seats can be provided therein. The 1953 Rules insofar as they are  

relevant for accommodation, sitting, the width of gangways, stairways, exits,  

are extracted below:  

(1) Accommodation - The  total  number  of  spectators  accommodated in the building shall not exceed twenty per hundred  square feet of the area available for sitting and standing or twenty  per  133.5 square feet  of  over  all  area  of  the floor  space  in  the  auditorium. . x x x

(2) Seating - (1) The seating in the building shall be arranged   so that there is free excess to exits.

(3) Gangway -  (1)  Gangway  not  less  than  forty-four  inches  wide shall be provided in the building as follows :-

(a) Down each side of the auditorium.

(b) Down the centre of the seating accommodation at intervals of  not more than twenty-five feet.

(c) Parallel to the line of the seating so as to provide direct access  to exits, provided that not more than one gangway for every ten  rows shall be required.

(2) All gangways, exits and the treads of steps and stairways shall  be maintained with non-slippery surfaces.   x x x

(4) The exits and the gangways and passages leading to exits shall  be kept clear of any obstruction other than rope barriers provided  in accordance with sub-rule (6). On no account shall extra seats be  placed in the gangways or spectators be allowed to stand in the   gangways at the time of performances in such a way as to block or   effectively reduce their width.   x x x  

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(4) Stairways - (1) There shall be at least two stairways each  not less  than four feet  wide to provide access to any gallery or  upper floor in the building which is intended for use by the public.  

x x x x

(5) No stairways shall discharge into a passage or corridor against  or across the direction of exit.

(5) Exits :  - (1) Every public portion of the building shall be  provided  with  an  adequate  number  of  clearly  indicated  exits   placed  in  such  positions  and  so  maintained  as  to  afford  the   audience ample means of safe and speedy egress.

(2) In the auditorium there shall be atleast one exit from every tier,   floor, or gallery for every hundred persons accommodated or part   thereof :

Provided further that an exit on or by way of stage or platform   shall not be reckoned as one of exits required by this rule.

(3) Every exit from the auditorium shall provide a clear opening   space of not less than seven feet high and five feet wide.

(4) Exits from the auditorium shall be suitably spaced along both   sides and along the back thereof and shall deliver into two or more   different thorough fares or open space from which there are at all   times free means of rapid dispersal.

(5)  Every  passage  or  corridor  leading  from  an  exit  in  the  auditorium to a final place or exit from the building shall  be of  such width as will in the opinion of the licensing authority enable  the persons who are likely to use it in an emergency to leave the  building without danger of crowding or congestion. At no point  shall any such passage or corridor be less than five feet wide and it  shall  not diminish in width in the direction of the final place of  exit.

(6) The combined width of the final place of exit from the building  shall be such that there are at least five feet of exit width for every  hundred persons that can be accommodated in the building.

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(7) All exit doors shall open outwards and shall be so fitted that  when opened they do not obstruct any gangway, passage, corridor,  stairway or landing.

(8) All exit doors and doors through which the public have to pass   on the way to the open air shall be available for exit during the   whole time that the public are in the building and during such time   shall not be locked or bolted.

(9) All exits from the auditorium and all doors or openings (other  than the main entrance) intended for egress from the building shall  be clearly indicated by the word "EXIT" in block letters,  which  shall not be less than seven inches high and shall be so displayed  as to be clearly visible in the light as well as in the dark.

(10) All other doors of openings shall be so constructed as to be  clearly distinguishable from exits. They may be indicated by the  words "NO THOROUGHFARE" arranged as in the figure below,  but no notice bearing the words "NO EXIT" shall be used in any  part of the building.

(6) Parking Arrangements –  (1) Such arrangements shall  be  made  for  the  parking  of  motor  cars  and  other  vehicles  in  the  vicinity of the buildings as the licensing authority may require.

(2) No vehicle shall be parked or allowed to stand in such a way   as  to  obstruct  exits  or  impede  the  rapid  dispersal  of  persons   accommodated, in the event of fire or panic.  

(7) Fire  Precautions -  (1)  Fire  extinguishing  appliances  suitable to the character of the building and of a patron, class and  capacity approved by the licensing authority shall be provided as  prescribed  by  him;  these  appliances  shall  be  disposed  to  his  satisfaction so as to be readily available for use in case of fire in  any part of the building.

(2) There shall always be sufficient means of dealing with the fire  readily  available  within  the  enclosure  and  these  shall  include  a  damp blanket, a portals Chemical fire extinguisher and two buckets  of dry sand.

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(3)  All  fire  extinguishing  appliances  shall  at  all  times  be   maintained in proper working order and available for instant use,   and  all  Chemical  fire  extinguishers  shall  be  capable  of   withstanding a pressure of not less than 250 lbs. square inch.

(4) During an exhibition all fire extinguishing appliances shall be  in charge of some person or persons specially appointed for this  purpose.  Such  persons  need  not  be  employed  exclusively  in  looking after the fire appliances but they must not be given any  other work during an exhibition which would take them away from  the building or  otherwise  prevent them from being immediately  available in case of danger or alarm of fire.

(emphasis supplied)

INQUIRY REPORTS

6. Immediately after  the incident,  the Lt.Governor constituted an enquiry  

committee under Mr.Naresh Kumar (DC, South) to investigate into the incident.  

He secured several reports and in turn submitted an exhaustive report on the  

calamity. When the investigation was transferred to CBI on 26.7.1997, they also  

secured several reports. The court appointed Commissioners also gave a report.  

These reports, enumerated below, were considered by the High Court:  

(i) Report dated 16.6.1997 issued by Delhi Fire Service.

(ii) Report  dated  25.6.1997  of  Mr.K.L  Grover,  Electrical  Inspector  (Labour Department) submitted to Mr.Naresh Kumar.

(iii) Report  dated  25.6.1997  submitted  by  Mr.R.K.  Bhattacharya,  Executive  Engineer  (Building)  South  Zone,  MCD  to  Mr.Naresh  Kumar.

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(iv) Report dated 26.6.1997 submitted by the Fire Research Laboratory,  Central Building Research Institute to Mr. Naresh Kumar.  

(v) Report  dated  27.6.1997 and 11.8.1997 of Central  Forensic  Science  Laboratory to Station House Officer.

(vi) Report  dated  29.6.1997  by  Mr.K.V.  Singh,  Executive  Engineer  (Electrical) PWD, to Mr. Naresh Kumar.

(vii) Report  dated  2.7.1997  by  Mr.  M.L.Kothari,  Electrical  Deptt.,  IIT  affirming the observations of Mr.K.V. Singh.

(viii) Panchnama dated 2.8.1997 prepared by Sr. Engineer, PWD.

(ix) Inspection-cum-Scrutiny  Report  dated  11.8.1997  by  Eng.Deptt.  of  MCD.

(x) Toxicology Report dated 18.9.1997 by AIIMS.

(xi) Joint  Inspection  Report  dated  7.10.1997  by  Representative  of  Licensing Authority, MCD, Delhi Fire Service, Electrical Inspector,  and General Manger of Uphaaar Cinema.

(xii) Naresh Kumar Report.

(xiii) Court Commissioner’s Report dated 30.11.2000.

Decision of High Court

7. The High Court after exhaustive consideration of the material including  

the aforesaid reports, recorded statements and other material, allowed the writ  

petition by order dated 24.4.2003. In the said order, the High Court identified  

the causes that led to the calamity and persons responsible therefor. It held the  

theatre owner, DVB, MCD and the Licensing Authority responsible for the fire  

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tragedy.  It  exonerated  the  Delhi  Fire  Force.  We  summarise  below  the  

acts/omissions attributed to each of them by the High Court.

Acts/omissions by DVB

8. DVB violated several provisions of the Electricity Act and the Rules. It  

had not obtained the approval of the Electrical Inspector for installation of the  

transformer as required under the Rules. The Rules required that the floor of the  

transformer room should be at a higher level than the surrounding areas and  

there should be a channel for draining of oil with a pit so that any leaking oil   

would not spread outside, increasing the fire hazard, and also to ensure that  

water  did  not  enter  the  transformer.  The  transformer  had  to  be  checked  

periodically and subjected to regular maintenance and should have appropriate  

covers. The connecting of wires should be by crimping and not by hammering.  

The negligence on the part of DVB in maintaining the transformers and repairs  

led to the root cause of the incident, namely the starting of the fire.  

Acts/Omissions of owner

9. Though the starting of the fire in the transformer happened due to the  

negligence of DVB, but if the owner had taken the necessary usual precautions  

and security measures expected of a theatre owner, even if the transformer had  

caught fire, it would not have spread to nearby cars or other stored articles nor  

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would the balcony and staircases become a death trap on account of the fumes.  

The following acts/omissions were attributed to the theatre owner :

(i) Parapet wall: The owner had violated the municipal bye-laws by making  

several  unauthorised alterations in the structure which all  contributed to  the  

incident.  In  particular,  the  violation  by  the  owner  in  raising  a  parapet  wall  

which was shown to be of three feet height in the sanctioned plan till the roof  

level  had  disastrous  effect  when  the  fire  broke  out.  The  stilt  floor  plan  

(sanctioned in 1972) showed that what was sanctioned was a three feet high  

parapet wall along the ramp which was situated to the rear of the transformer  

room. If the said parapet wall had been constructed only to a height of three feet  

as shown in the sanctioned plan, the entire space above it would have been open  

and in the event of any fire in the transformer room or anywhere in the stilt   

floor, the fumes/smoke could have dispersed into the atmosphere. But at some  

point of time in or around 1973, the Licensee had raised the said three feet wall  

upto the ceiling height of twelve feet with the result the stilt floor (parking area)  

stood converted into a totally  enclosed area.  But for  the construction of  the  

parapet wall to ceiling height, the fumes/smoke from the transformer room and  

from the parking area where the cars were burning, would have gone out of the  

stilt  floor  into  the  open  atmosphere.  The  unauthorized  raising  of  this  wall  

prevented the smoke from getting dispersed and forced it  to seek a way up  

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through the stairwell causing the chimney effect and also entered the balcony  

through the air conditioning system resulting in the concentration of the smoke  

in the balcony area of the theatre and the stairwell  itself,  thereby playing a  

major role in spreading the fire/smoke to balcony area and stairwell. The Court  

found that the apparent intention of raising the height of the wall from three to  

twelve feet was to use the area between the wall and the transformer room for  

commercial purposes.

(ii) Closing one exit in balcony and reducing the width of gangways: Making  

alterations in the balcony, contrary to the Cinematograph Rules by closing the  

gangway/aisle on one side and closing/blocking one of the exits by construction  

of an owner's box in front of the right side exit (The details of these alterations  

are given in paras 11 to 14 below). The said acts impeded the free and quick  

exit of the occupants of balcony as everyone had to use the exit on the left side.  

The delay made them victims of  asphyxiation due to the poisonous/noxious  

gases.

(iii) Illegal  parking in  stilt  floor:  The stilt  floor  where the three electrical  

rooms  (generator  room,  HT  room  and  LT  room)  were  situated,  had  an  

earmarked parking space for 15 cars. The sanctioned plan clearly contemplated  

a passage way for movement of cars of a width of about 16 ft. The sanctioned  

plan required that the area in front of the three electrical rooms should be left  

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free as a part of that passage way and no parking was contemplated in front of  

the said three rooms.  However the Licensee was permitting the patrons to park  

their cars in a haphazard manner, particularly in the central passage. Instead of  

restricting the  cars  to  be  parked in  that  floor  to  15  and leaving the  central  

passage, in particular the passage in front of the three electrical rooms free for  

maneuvering the cars,  the owner permitted the entire passage to be used for  

parking the vehicles,  thereby increasing the parking capacity from 15 to 35.  

This made exiting of vehicles difficult and until and unless the vehicles in the  

passage were removed, other parked vehicles could not get out. It also made it  

difficult for any patrons to use the said area as an exit in an emergency. Parking  

of vehicles in front of the three electrical rooms increased the fire hazard. If the  

passageway between two parked row of cars in the stilt floor had been kept free  

of parking as per  the sanctioned plan and consequently if  no cars had been  

parked in front of the transformer room, the fire in the transformer room would  

not have spread to the cars and the entire calamity could have been avoided. On  

that day, a contessa car parked next to the transformer room in the passageway  

first caught fire. (Though the sanctioned parking plan showed that the stilt floor  

was to be used for parking only fifteen cars with a middle passageway of fifteen  

feet width left free for movement of cars), the parking area was used for parking  

as many as 35 cars. As the parking area was overcrowded with haphazardly  

parked cars, the entire passageway meant for movement of cars was blocked.  

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Not following the provisions of Electricity Act and Electricity Rules in regard  

to  the  construction  of  the  transformer  room  with  required  safeguard  and  

permitting haphazard parking of large number of vehicles, particularly near the  

transformer room started the fire and spread it.

(iv) If the owners had not unjustly and by misrepresenting the facts, obtained  

an interim stay in the year 1983 which continued up to the date of the incident  

and as a consequence though the irregularities and violations of safety measures  

had been noticed and brought to its notice, they had not rectified them and the  

continued violations resulted in the incident.

Acts/omissions of MCD

10. The sanctioned plan issued in 1972 to the Licensee was for construction  

of a three feet high parapet wall. Though the Licensee raised the said wall up to  

ceiling height of 12 feet in violation of the Rules, the MCD failed to point out  

this violation between 1994 to 1997 and take action against the theatre owners.

MCD was required to give a NOC after inspecting the building, certifying that  

there was no violation of the building bye-laws or unauthorized construction,  

every year, from the year 1994 so that licence should be renewed. MCD failed  

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to make such inspections. On the other hand it gave a NOC for grant of licence  

in the year 1996.

Acts/omissions of the Licensing Authority

11. The licensing authority owed a duty to ensure that the cinema theatre  

complied with all the requirements of the Cinematograph Act and Rules and to  

obtain the necessary NOCs from MCD, Fire Force and Electrical Inspector. If  

there was any violation, it ought not to have renewed the licence. The Licensing  

Authority failed to note the violations/deviations and take remedial action. Even  

though a stay order had been issued by the High Court on 28.6.1983, in a writ  

petition challenging the suspension of licences, the said stay order did not come  

in the way of the Licensing Authority making appropriate inspections and if  

necessary  to  take  action  to  suspend  the  licence  or  seek modification  of  the  

interim order. The Licensing Authority did not discharge its statutory functions  

and went on issuing temporary permits for periods of two months each, for a  

period of  more  than 13 years  when the Rules  clearly contemplated  that  the  

temporary permits could not be renewed for a period of more than six months.

Conclusion of High Court

Closing of one Balcony Exit and narrowing of gangway       

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12. We may only refer to the unauthorized closure of an exit from balcony  

and reduction of width of gangways by addition of seats in greater detail  to  

have a complete picture. Uphaar Cinema was inaugurated on 27.4.1973. In the  

year 1975, there was a general cut of 10% value of the cinema ticket rates fixed  

by the Delhi Administration. The licensees made a representation to the Delhi  

Administration  alleging that  the expenses  had gradually  gone up during the  

course of years after the rates were fixed and that even the existing rates were  

inadequate to meet the operating costs. The representation of the Association of  

Motion Pictures Exhibitors was considered and the Delhi Administration agreed  

to relax the Rules and allowed the licensees to have additional seats (in addition  

to the existing seats) in their cinema halls to make good the loss caused to the  

licensees by the reduction in the rates by 10%. Uphaar Cinema was permitted to  

add 43 seats in balcony and 57 seats in the main hall, as per a notification dated  

30.9.1976 issued by the licensing authority. As a consequence, 43 seats were  

added  in  the  balcony and 57 seats  were  added  in  the  main  hall  of  Uphaar  

Theatre. The Chief Fire Officer inspected the theatre and submitted a report that  

the addition of seats was a fire hazard. The Lt.  Governor therefore issued a  

notification  dated  27.7.1979  cancelling  with  immediate  effect  the  earlier  

notifications by which relaxation had been granted to the licensees (including  

Uphaar Cinema) by allowing them to increase the number of seats.  The said  

notification dated 27.7.1979 was challenged by the Licensees by filing a writ  

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petition in the Delhi High Court. The said writ petition was disposed of by a  

Division Bench of the High Court by its judgment dated 29.11.1979 (reported  

in Isher Das Sahni & Bros. v. The Delhi Administration – AIR 1980 Delhi 147)  

holding that the Delhi Administration could not have granted such relaxations if  

such relaxations would have contravened the Rules to an extent as to increase  

the risk of fire hazard or to expose the spectators to unhealthy conditions. The  

High  Court  further  held  that  the  opinion  and  advice  of  the  fire  and  health  

authorities had to be taken before grant of any relaxation. The High Court noted  

the  following  view  of  Chief  Fire  Officer  showing  reluctance  to  advise  

relaxation in  the rules as  the safety  of  the visitors  to  the theatres would be  

affected thereby:

"Even  under  the  normal  circumstances  the  exit  facilities  are  seriously hampered by people rushing and  it is felt that in case of   panicky situation of a minor nature, the people will be put to great   difficulty which may even result in stampede. In the circumstances, I  feel that it would not be advisable to allow extra seats required by  the Managements. In a few theaters, however, the difficulty may not  be  so  acute.  If  at  all  any  relaxation  has  to  be  considered  under  unavoidable circumstances, our reaction to the proposals but forward  by the management of a few cinema houses may kindly be seen in  the enclosure".

The High Court also noted that  Chief Fire Officer  later  modified and toned  

down  his  report  when  he  was  informed  by  the  Delhi  Administration  that  

additional seats were permitted to compensate the loss on account of reduction  

19

in cinema fares. The High Court noted that ultimately the Delhi Administration,  

Chief Fire Officer and Municipal Corporation agreed to some relaxation and  

disposed of the petitions directing the Delhi Administration to apply their mind  

and decide how many of the additional seats were in accordance with the Rules  

and could be permitted to be retained. The effect of the order was that only  

those  additional  seats  which contravened the  Rules  had to  be  removed  and  

cancellation  of  the  Notification  dated  30.9.1976 did  not  result  in  automatic  

removal of all additional seats.

13. In  the  meanwhile  by  order  dated  6.10.1978,  the  Entertainment  Tax  

Officer  permitted  Uphaar  Cinema  to  install  a  box  with  eight  seats  for  use  

without  tickets  (for  complimentaries).  This  was  not  however  specifically  

brought to the notice of  the Licensing Authority  nor his  permission sought.  

These  additional  seats  were  not  sanctioned  by  the  Licensing  Authority.  In  

pursuance of such permission the Licensee closed the exit on the right side of  

the balcony for installing the box with eight seats. The central access was used  

exclusively for entry. As a result the only exit from the balcony was the one at  

the extreme left top corner of the balcony.

14. After the decision dated 29.11.1979, a show cause notice was issued to  

reconsider the addition of 100 seats and by order dated 22.12.1979, the DCP  

20

(Licensing) held that six additional seats in the balcony (seat No.8 in rows ‘A’  

to ‘F’) and 56 additional seats in the main hall were blocking the gangway and  

causing obstruction to egress of patrons and directed their removal so that the  

original  vertical  gangway  could  be  restored.  However  on  a  subsequent  

application  dated  29.7.1980  by  the  Licensee  by  order  dated  4.10.1980,  the  

Licensing Authority permitted installation of 15 additional seats in the balcony,  

that  is  two additional  rows of  3  seats  each in  front  of  the exit  in  balcony,  

addition of one seat against back wall next to seat no.38 and eight additional  

seats by adding one seat in each of rows ‘A’ to ‘H’. As a result (i) the seating  

capacity which was 287 plus Box of 14 went up to 302 plus two Boxes (14+8),   

(ii) the right side exit was closed and a box of 8 seats added; (iii) the right side  

vertical gangway was closed and a new gangway created between seat Numbers  

(8) and (9); (iv) the width of the gangways leading to exit from balcony was  

reduced.

15. What is significant is while obtaining permission of Licensing Authority  

for increasing the capacity from 287 to 302, he was not informed about addition  

of one box of 8 seats and closing of one exit. As per the 1953 Rules, there  

should be one exit  for  every 100 seats.  Under  the 1981 Rules,  this  became  

minimum of one exit for every 150 persons. Originally there was one central  

entry/exit point between foyer to balcony and two exits at the two top corners of  

21

the  balcony.  After  the  modifications  and  increase  in  seats,  the  central  door  

became an exclusive entry from the foyer; the right side corner of the balcony  

was permanently closed by installation of the special box of eight seats and  

there was only one exit for the entire balcony with a capacity of 302 persons,  

situated at the left side top corner of the balcony. This was the major cause for  

the tragedy, as when lights went off and fumes surrounded, the balcony became  

a death trap. The left (West) exit from the balcony led to the staircase leading to  

the parking area. Patrons from the balcony who entered the entire stairwell also  

died, as it was full of noxious fumes entering from the stilt parking area on  

account  of  the chimney effect.  The patrons  were denied access  to  the right  

(East) exit because of the installation of the private box and the closing of right  

(East)  exit,  which  would  have  otherwise  provided  an  access  to  the  other  

staircase with lift well which led to the ticket foyer outside the parking area and  

therefore free from noxious fumes/smoke. The report shows that the exit light,  

ground light, side light, emergency lights and public address system were all  

non-functional,  adding  to  the  delay,  confusion  and  chaos,  making  it  very  

difficult to get out of the balcony which was dark and full of smoke/fumes.

16. The High Court held that the theatre owner (Licencee), DVB, MCD and  

Licensing  Authority  being  responsible  for  the  incident  were  jointly  and  

severally liable to compensate the victims. The High Court directed payment of  

22

compensation to the legal heirs of 59 patrons who died, and also to the 103  

persons who were injured. The High Court determined a uniform compensation  

of Rs.18 lakhs payable in the case of deceased who were aged more than 20  

years, and 15 lakhs each in the case of those deceased who were less than 20  

years of age. It also awarded a compensation of Rs.1,00,000 to each of the 103  

injured. It also awarded interest at 9% per annum on the compensation from the  

date of filing of writ petition to date of payment. The High Court apportioned  

the liability inter se among the four in the ratio of 55% payable by the theatre  

owners  and  15%  each  payable  by  the  Delhi  Vidyut  Board,  MCD  and  the  

Licensing Authority. The High Court directed that while paying compensation  

the ex-gratia amount wherever paid (Rs.1,00,000 in the case of death, Rs.50,000  

in  case  of  grievous  injuries  and  Rs.25000  for  simple  injuries)  should  be  

deducted. The High Court directed that the Licensee shall pay Rs.2,50,00,000/-  

(Rupees two and half crores) as punitive damages (being the income earned  

from installing extra 52 seats unauthorizedly during the period 1979 to 1996.  

The said amount  was ordered to be paid to Union of India for  setting up a  

Central Accident Trauma Centre.  

17. The  High  Court  approved  the  recommendations  of  Naresh  Kumar  

Committee which were extracted in detail in the judgment of the High Court.  

The High Court also made the following recommendations:  

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A) Several  requests  by  the  fire  authorities  for  adequate  maintenance  and  

timely  upgradation  of  the  equipment  have  floundered  in  the  bureaucratic  

quagmire. When lives of citizens are involved the requirement of those dealing  

in  public  safety  should  be  urgently  processed  and  no  such  administration  

process of clearance in matters of public safety should take more than 90 days.  

The entertainment  tax  generates  sufficient  revenue for  the  administration  to  

easily meet the financial requirements of bodies which are required to safeguard  

public health.

B) Considering the number of theatres and auditoria functioning in the city,  

sufficient staff to inspect and enforce statutory norms should be provided by the  

Delhi Administration.

C) The  Delhi  police  should  only  be  concerned  with  law  and  order  and  

entrusting of responsibility of licensing of cinema theatres on the police force is  

an additional burden upon the already over burdened city police force.

D) The inspection and enforcement of the statutory norms should be in the  

hands of one specialized multi  disciplinary body which should deal with all  

aspects of the licensing of public places. It should contain experts in the field of  

(a) fire prevention (b) electric supply (c) law and order (d) municipal sanctions  

(e)  urban  planning  (f)  public  health  and  (g)  licensing.  Such  a  single  

multidisciplinary body would ensure that the responsibility of public safety is in  

the hands of a body which could be then held squarely responsible for any lapse  

and these would lead to a situation which would avoid the passing of the buck.  

The existing position of different bodies looking after various components of  

public safety cannot be continued. A single body would also ensure speedier  

processing  of  applications  for  licenses  reducing  red  tape  and  avoidable  

complications and inevitable delay.

24

E) All necessary equipment should be provided to ambulances and the fire  

brigade including gas masks, search lights, map of water tanks located in the  

area including the existence of the location of the underground water  tanks.  

Such water tank locations should be available to the firemen working in the  

area. The workshop for the fire tenders service and maintenance should also be  

fully equipped with all spares and other equipment and requisition made by the  

fire brigade should receive prompt and immediate attention. There should also  

be adequate training imparted to the policemen to control the crowd in the event  

of a disaster as it is found that onlookers are a hindrance to rescue operations.  

Similarly  all  ambulances  dealing  with  disaster  management  should  be  fully  

equipped.

18. The Vidyut Board has accepted the judgment and has deposited 15% of  

the total compensation.  The theatre owner, Delhi  Police and MCD have not  

accepted the judgment and have filed these appeals. CAs. 7114-7115/2003 has  

been filed by the MCD denying any liability. The Licensing Authority has filed  

CA No.7116/2003 contending that the theatre owners should be made liable for  

payment  of  the  entire  compensation.  The  theatre  owner  has  filed  CA  

NO.6748/2004 urging two contentions, namely, their share of liability should  

have  been  far  less  than  55%  and  the  rates  of  compensation  fixed  were  

excessive.  

25

19. At the outset it should be noted that the causes for the calamity have been  

very  exhaustively  considered  by  the  High  Court  and  it  has  recorded  a  

categorical  finding about  the  negligence  and the liability  on  the  part  of  the  

licensee and the DVB. On the examination of the records, we agree with the  

High Court that such a catastrophic incident would not have happened if the  

parapet wall had not been raised to the roof level. If the said wall had not been  

raised, the fumes would have dispersed in the atmospheric air. Secondly if one  

of the exits in the balcony had not been blocked by construction of an owner's  

box and if  the right  side gangway had not been closed by fixing seats,  the  

visitors in the balcony could have easily dispersed through the other gangway  

and exit into the unaffected staircase. Thirdly if the cars had not been parked in  

the immediate vicinity of the transformer room and appropriate pit had been  

made for draining of transformer oil, the oil would not have leaked into the  

passage nor would the burning oil lighted the cars, as the fire would have been  

restricted only to the transformer  room.  Even if  one of  the three causes  for  

which the theatre owner was responsible, was absent, the calamity would not  

have occurred. The Licensee could not point out any error in those findings.  

Ultimately therefore the contention of the licensee before us was not to deny  

liability but only to reduce the quantum of liability fastened by the High Court  

and to increase the share of the liability of the three statutory authorities. DVB,  

as noticed above, has not challenged the decision of the High Court. Therefore,  

26

we  do  not  propose  to  reconsider  and  re-examine  or  re-assess  the  material  

considered and the finding recorded with reference to the Licensee and DVB.  

Therefore  the  incident  is  not  disputed.  The  deaths  and  injuries  are  not  in  

dispute.  The  identity  of  persons  who  died  and  who  were  injured  is  not  in  

dispute. The fact that the Licensee and DVB are responsible is not in dispute.  

The  limited  questions  that  arise  are  whether  the  MCD  and  the  Licensing  

Authority could have been made liable to pay compensation and whether the  

percentage of liability of the Licensee should be reduced from 55%.

20. On the contentions urged the following questions arise for consideration:

(i) Whether MCD and Licensing Authority could be made liable to pay  compensation to the victims?

(ii) What should be apportionment of liability?

(iii) Whether compensation awarded is excessive?

(iv) Whether  award  of  punitive  damages  of  Rs.2.5  crores  against  the  Licensee was justified?   

We will  deal  with questions (i)  and (ii)  together and questions (iii)  and (iv)  

together as they are interconnected.  

Contentions of MCD

21. MCD submitted that the writ  petition focuses on the violations by the  

licensee, the negligence on the part of the DVB, Fire Force and the licencing  

27

authority; no specific role assigned to the MCD in regard to the incident; that  

the writ petition deals with the responsibilities of the owners (licensees) (paras  

2 to 6 and 15); Delhi Vidyut Board (para 7);  licencing authority - Delhi Police  

(paras 8 to 14) and seeks to make them liable. The role of Delhi Fire Services  

(para 16) is referred. Role of Licensing Authority, Delhi Police (para 17), role  

of medical  facilities  managed by health authorities (paras 18 to 20) and the  

cover-up operations by the owners and the role of the licensing authority; that  

except  a  general  averment  that  various  instrumentalities  of  State  including  

MCD are liable to pay damages, no specific averment of allegation has been  

made  against  MCD.  It  is  also  submitted  that  Mr.  Naresh  Kumar,  Deputy  

Commissioner  (South)  NCT  who  was  appointed  by  the  Lt.  Governor  

immediately after the incident to conduct an enquiry, had submitted a report  

which also primarily deals with the omissions and commissions of the Licensee,  

the Licencing Authority, Delhi Fire Force, Delhi Vidyut Board and does not fix  

any specific responsibility on MCD. Similarly the report of the Commissioners  

appointed by the Delhi High Court (consisting of an Advocate and Professors  

from engineering institutions) submitted its report dated 30.11.2000 which also  

does not fix any liability on MCD.  

22. MCD next pointed out that even the impugned judgment of Delhi High  

Court while exhaustively covering the roles of the Licensee, Vidyut Board, the  

28

licensing authority, Delhi Fire Force, makes only a passing reference to MCD.  

The High Court holds MCD liable only on the ground that it did not take any  

action  in  regard  to  the  unauthorised  raising  of  parapet  wall  adjoining  the  

transformer from three feet height to roof level. According to Delhi High Court  

on account of the raising of the height of the parapet wall in the year 1973, the  

noxious fumes/smoke from the burning of the transformer oil, diesel and the  

fuel in the tanks of the cars and the burning of cars themselves could not escape  

into open atmosphere,  and as a consequence,  the noxious fumes and smoke  

funneled  into the stairwell  to  reach the air-conditioning ducts  providing air-

conditioning to the balcony and the landing near the balcony exit, resulting in  

asphyxiation  of  57  patrons.  It  is  submitted  that  except  the  reference  to  the  

parapet  wall  there is  absolutely no reference to the role of  the MCD.  It  is  

contended that in 1973 it had no role to play to check the construction as at that  

time, it  was the responsibility of the Executive Engineer, PWD. And by the  

time it came into the picture in 1994 replacing the Executive Engineer, PWD,  

the structure was in existence for more than two decades and therefore there  

was no question of MCD objecting to the said wall.

23. MCD  submitted  that  it  could  easily  demonstrate  from  the  relevant  

enactment  and Rules that  it  had no role to play in regard to the raising the  

height of the parapet wall by the theatre owner, nor any liability for such action  

29

by the theatre owner and as a consequence they should have been exonerated. It  

was  pointed  out  that  under  the  Cinematograph  Act  the  Licensing Authority  

grants a cinematograph licence enabling a theatre owner to run cinema shows in  

the  theatre.  The  Cinematographic  Rules,  1953  contemplated  the  licensing  

authority obtaining clearances/consents from the Executive Engineer PWD and  

Electrical  Inspector.  Even  the  Delhi  Cinematographic  Rules  of  1983  

contemplated certificates/consents being obtained by the Licensing Authority  

from the Public Works Department, Electrical Inspector and Chief Fire Officer  

every  year  before  renewing  the  licence.  Even  in  regard  to  the  design  and  

construction of  the cinema theatre,  the rules under the Cinematographic Act  

applied and prevailed and the municipal bye-laws did not contain any provision  

as to the construction of cinema theatre but on the other hand, clearly provided  

that the matter will be governed by the Cinematograph Rules. Thus, the MCD  

had no role to play either in construction of the cinema theatre or in the grant of  

licence or periodical  renewal thereof.   It  was only on 3.5.1994 by virtue of  

amendment of the Delhi Cinematography Rules, 1981, substituted in place of  

the Executive Engineer of PWD, that MCD was required to give a report in  

regard  to  the  structure/building  which  was  one  of  the  requirements  for  the  

licensing  authority  to  grant  or  renew  any  cinema  licence.  From  1994,  the  

limited  role  of  MCD  was  to  furnish  a  report  regarding  the  structures  and  

whether there were any deviations. But in fact its reports could not even be  

30

acted upon by the licensing authority, in view of the order of stay obtained by  

the Licensee against  the licensing authority on 28.6.1983, made absolute on  

25.3.1986. In view of such stay, the licensing authority was not issuing any  

licences but was only granting temporary bi-monthly permits for running of the  

theatre.  Even  the  report  given  by  the  MCD  pointing  out  the  various  

defects/violations was not of any assistance to the Licensing Authority. This  

was  because  in  the  year  1993  itself,  the  licensing  authority  had  made  an  

application for vacating the interim stay but on account of the time taken by the  

Licensees for filing objections thereto and thereafter for hearing, the application  

was not heard even on the date of the incident and thereafter the entire matter  

became infructuous. In the circumstances it is submitted that the MCD had no  

role to play even in the matter of inspection and giving of reports regarding  

condition of the premises.

24. As far as the parapet wall is concerned it is contended that it had not  

sanctioned any plan for increasing the height of the parapet wall from 3 ft. to  

roof level. It was contended even if it granted any licence for construction or  

given  any  report  or  no  objection  certificate,  in  exercise  of  its  statutory  

functions, it could not be made liable for any compensation on the ground of  

grant of such licence or NOC or report in regard to the parapet wall,  as no  

31

knowledge can be attributed to the Corporation about the possible consequences  

of raising the height of parapet wall.  

25. Lastly it was contended by MCD that when in exercise of its statutory  

powers of regulating the constructions of buildings within its jurisdictional area  

or in complying with the request of the Licensing Authority for any report as  

per Cinematograph Rules, it acts bona fide and in accordance with the relevant  

rules and bye-laws, in the absence of malafides, it can not be made liable even  

if there were any errors or irregularities or violations. It was submitted that it  

cannot also be made liable for any violation by the theatre owner in putting up  

the construction in accordance with the plan sanctioned by the MCD or any  

violation  of  the rules  or  licence  terms  or  negligence  in  running the  cinema  

theatre.

26. It  was  contended  by  the  victims  Association  that  the  liability  of  the  

Municipal Corporation arises from the fact that it was one of the authorities  

which was required to give Reports/No Objection Certificates (NOCs) to the  

licensing authority every year, for construction and grant of renewal of licence.  

As admitted by the MCD itself the responsibility of granting a certificate in  

regard to the condition of the structure of the building and the violations in  

construction thereof was entrusted to the MCD on 3.5.1994. It was contended  

32

that if the Municipal Corporation had discharged its functions as was expected  

of them by thorough inspection of the theatre building and pointed out to the  

licensing authority any violations or deviations or unauthorised constructions,  

the temporary permit  for running the theatre which was being issued by the  

licensing authority, could have been stopped and the calamity could have been  

averted. It was pointed out that on the other hand, when the Licensing Authority  

sought  its  report/NOC,  by  its  communication  dated  11.3.1996,  seeking  

inspection and report,  MCD represented by its Administrative Officer sent  a  

report  dated  25.9.1996  to  the  Deputy  Commissioner  of  Police,  (Licensing  

Authority)  stating  that  it  had  no  objection  for  the  renewal  of  annual  

Cinematograph licence of the Uphaar Theatre. It was submitted that the purpose  

of seeking a No Objection Certificate from the Municipal Corporation was not  

an  empty  formality;  and  that  if  statutory  authorities  like  MCD,  ignore  the  

relevance and importance of such no objection certificate and routinely grant  

such certificates, as if it is a formality to be complied with mechanically, the  

licensing process  would become a mockery.  It  was contended that  statutory  

authorities like MCD should function diligently relating to public safety and if  

they fail to do so, they should be liable for the consequences.  

27. We  agree  with  the  MCD that  it  had  no  role  to  play  in  regard  to  

increasing  the  height  of  the  parapet  wall.  The  sanction  for  licence  to  

33

construction granted in 1972 was in regard to a three feet high parapet wall.  

The height of the said wall was increased by the Theatre owners in or about  

1973. The MCD was not the inspecting authority till 1994. There was no  

structural  change,  modification  or  deviation  after  1994.  When  MCD  

inspected the theatre, it would have seen a theatre which was running for  

more  than  20  years  and  that  there  was  no  recent  change.  In  the  

circumstances, MCD cannot be found fault with for not complaining about  

the wall.   

28. The Delhi Cinematographic Rules, 1981 as originally framed had no  

role for MCD in the grant of licences by the licensing authority. Rule 14  

provided that before granting or renewing an annual licence the Licensing  

Authority shall call upon: (i)  the Executive Engineer, PWD, to examine the  

structural features of the building and report whether the rules thereto had  

duly  been  complied  with;  (ii)  the  Electrical  Inspector  to  examine  the  

electrical equipments used in the building and report whether they complied  

with the requirements of the Electricity Act and the Rules thereunder and  

whether  all  precautions  had  been  taken  to  protect  the  spectators  and  

employees from electric shock and to prevent the introduction of fire in the  

building through the use of electrical equipments; and (iii) the Chief Fire  

Officer to ensure that proper means of escape and safety against fire and to  

34

report whether proper fire extinguishers appliances have been provided. All  

defects  revealed  by  such  inspections  were  required  to  be  brought  to  the  

notice of the licensee and the licensing authority who may refuse to grant or  

renew the licences unless and until they are remedied to its satisfaction. In  

fact even for granting a temporary licence, Rule 15 required the licensing  

authority to call upon the Executive Engineer, PWD, to inspect the building  

and report whether it is structurally safe for cinematographic exhibition. The  

said  rules  were  amended  by Cinematograph  Amendment  Rules,  1994 by  

notification dated 3.5.1994. By virtue of the said amendment wherever the  

term ‘Executive Engineer’ appeared it was to be substituted by the words  

‘concerned local body’. The term concerned local body was also defined as  

referring to MCD, DDA, NDMC, Cantonment Board, as the case may be in  

whose  jurisdiction  the  place  of  cinematographic  exhibition  was  situated.  

Therefore on and after 3.5.1994, the report/certificate of the MCD about the  

structural features of the building and whether the Rules in that behalf had  

been duly complied with, was a condition precedent for renewing the annual  

license or even granting a temporary lease by the licensing authority. This  

showed that as far as the structural features and deviations and defects, the  

Licensing Authority relied upon the MCD, for expert opinion after 3.5.1994.  

The question is whether MCD can be made liable to compensate the victims  

of the fire tragedy, on the ground that it was required to give an inspection  

35

report or on the ground that it gave a no objection certificate on 25.9.1996  

for renewal of licence for 1996-97.  

Contentions of the Licensing Authority  

29. The Licensing Authority contended that the High Court committed an  

error in holding it responsible for having contributed to the spreading of fire and  

smoke  by its  acts  of  omission  and commission  and consequently  making  it  

liable to pay compensation. The licence was granted initially in the year 1973.  

At that time the District Magistrate was the licensing authority. The power to  

grant licence and renew it yearly was transferred from the District Magistrate to  

the Deputy Commissioner of Police (Licensing) on 25.3.1986. The licensing  

authority was not an expert on Cinema Theatres nor technically qualified to  

assess whether a licence of a cinema theatre should be renewed or not. He was  

required to obtain the reports/NOCs from the PWD (from MCD from the year  

1994), Fire Force and Electrical Inspector. On the basis of such reports and on  

personal  inspections,  the  licensing  authority  was  required  to  consider  and  

decide whether a theatre owner was entitled to a licence or renewal of licence to  

exhibit  cinematograph  films  in  the  theatre.  The  Licensing  Authority  was  

empowered to cancel the licence or refuse to renew it (if he was considering an  

application  for  renewal)  if  the  applicant  for  licence  did  not  fulfill  the  

36

requirements.  The  theatre  owners  had  filed  a  writ  petition  and  obtained  an  

interim order of stay in the year 1983 against the cancellation/suspension of  

their  cinematographic  licence.  While  making  the  interim  order  absolute  on  

25.3.1986, the High Court had made it clear that if there were any violations by  

the theatre owner, the licensing authority was at liberty to take such steps as  

were necessary to ensure that the violations or deviations were set right. The  

said interim order made it clear that if there were any violations, he can also  

move the High Court for vacating the interim order. The Licensing Authority  

moved an application on 19.4.1993 citing several serious violations committed  

by  the  licensee.  But  the  High Court  did  not  vacate  the  stay.  Therefore  the  

Licensing  Authority  had  to  issue  temporary  licences  inspite  of  any  

irregularities. Therefore the Licensing Authority could not be held responsible.  

30. While sparking in the Delhi Vidyut Board transformer due to negligence  

in maintenance, started the fire, the impact of this fire would not have been so  

tragic,  (i)  if  the  cars  not  been  parked  in  front  of  and  very  close  to  the  

transformer in a haphazard manner; (ii) if  adequate exits had been provided on  

both sides of the balcony; (iii) if the owners of the theatre had not closed top  

right exit of the balcony to provide a private box for the owners resulting in an  

exit only on one side of the balcony; (iv) if the owners had not constructed an  

illegal  wall the poisonous fumes would not  have been funneled towards the  

37

balcony; and as every second’s delay in exiting to safer environment was vital,  

if the exits been located on both sides of the balcony, precious minutes would  

have been saved in getting out and loss of several innocent lives avoided.  It  

should be remembered that  none of the patrons from the main  hall  (ground  

floor) of the cinema died or were injured. Even those who were on the second  

floor escaped. It was only the occupants of the balcony who were affected and  

the deaths were due to asphyxiation on account of the noxious fumes/smoke.  

The theatre owner and DVB have been held liable. The question is whether the  

Licensing Authority  and MCD can be held liable  for  improper  discharge of  

statutory functions.   

The Legal position :  

31. In Rabindra Nath Ghosal Vs. University of Calcutta and Ors. - (2002) 7  

SCC 478 this Court held:  

“The Courts having the obligation to satisfy the social aspiration of the  citizens have to apply the tool and grant compensation as damages in a  public law proceedings. Consequently when the Court moulds the relief in  proceedings  under  Articles 32 and 226 of  the  Constitution  seeking  enforcement or protection of fundamental rights and grants compensation,  it does so under the public law by way of penalising the wrongdoer and  fixing the liability for the public wrong on the State which has failed in its  public duty to protect the fundamental rights of the citizens. But it would   not be correct to assume that every minor infraction of public duty by   every public officer would commend the Court to grant compensation in   a petition under Articles 226 and 32 by applying the principle of public   law proceeding.  The Court  in exercise  of  extraordinary power under   Articles 226 and 32 of  the  Constitution,  therefore,  would  not  award   damages  against  public  authorities  merely  because  they  have  made   

38

some order which turns out to be ultra vires, or there has been some   inaction  in  the  performance  of  the  duties  unless  there  is  malice  or   conscious abuse. Before exemplary damages can be awarded it must be  shown that some fundamental right under Article 21 has been infringed by  arbitrary or capricious action on the part of the public functionaries and  that the sufferer was a helpless victim of that act.”

(emphasis supplied)

This Court in  Rajkot Municipal Corporation v. M.J. Nakum (1997) 9 SCC  

552 dealing with a case seeking damages under law of torts for negligence  

by municipality, held as follows:  

“The  conditions  in  India  have  not  developed  to  such  an  extent  that  a  Corporation can keep constant vigil by testing the healthy condition of the  trees in the public places, road-side, highway frequented by passers-by.  There is no duty to maintain regular supervision thereof, though the local  authority/other authority/owner of a property is under a duty to plant and  maintain the- tree. The causation for accident is too remote. Consequently,  there would be no Common Law right to file suit for tort of negligence. It  would  not  be  just  and  proper  to  fasten  duty  of  care  and  liability  for  omission thereof. It would be difficult for the local authority etc. to foresee  such an occurrence.  Under these circumstances,  it  would be difficult  to  conclude that the appellant has been negligent in the maintenance of the  trees planted by it on the road-sides.”

In Geddis v. Proprietors of Bonn Reservoir (1878) 3 Appeal Cases 430, the  

House of Lords held:  

“For I take it, without citing cases, that is now thoroughly well established  that  no  action  will  lie  for  doing  that  which  the  legislature  has   authorized, if it be done without negligence, although it does occasion   damage  to  anyone; but  an  action  does  lie  for  doing  that  which  the  legislature has authorized, if it be done ‘negligently.”

In  X (Minors) v. Bedfordshire County Council [(1995) 3 All ER 353] the  

House  of  Lords  held  that  in  cases  involving  enactments  providing  a  

39

framework  for  promotion  of  social  welfare  of  the  community,  it  would  

require exceptionally clear language to show a parliamentary intention that  

those responsible for carrying out the duties under such enactment should be  

liable in damages if they fail to discharge their statutory obligations. It was  

held:   

“….a common law duty of care cannot be imposed on a statutory duty if  the observance of such a common law duty of care would be inconsistent  with or have a tendency to discourage the due performance of the statutory  duties by the local authority.”

In R v. Dy Governor of Parkhurst Prison (Ex.P.Hague) – [(1991) 3 All ER  

733],  the  House  of  Lords  held  that  the  legislature  had intended  that  the  

Prisons Act, 1952 should deal with the administration and management of  

prisons,  but had not intended to confer on prisoners a cause of action in  

damages. The Prison Rules 1964 were regulatory in nature to govern prison  

regime, but not to protect prisoners against loss, injury, or damage nor to  

give them any right of action.

In John Just v. Her Majesty The Queen -- (1989) 2 SCR 1228, the Canadian  

Supreme Court considered the question whether the department of Highways  

is liable for payment of damages to a person who was hit by a boulder on a  

highway  on  the  ground  it  was  duty  of  the  department  to  maintain  the  

highway in a safe and secure manner. The Canadian Supreme Court held:  

40

“Prior  to  the  accident  the  practice  had  been  for  the  Department  of  Highways to make visual inspections of the rock cuts on Highway. These  were carried out from the highway unless here was evidence or history of  instability in  an area in which case the rock engineer  would climb the  slope. In addition there were numerous informal inspections carried out by  highway personnel as they drove along the road when they would look for  signs of change in the rock cut and for rocks in the ditch…....In order for a  private duty to arise in this case, the plaintiff would have to establish   that  the  Rockwork  Section,  having  exercised  its  discretion  as  to  the   manner or frequency of inspection, carried out the inspection without   reasonable care or at all. There is no evidence or indeed allegation in   this regard……I would therefore dismiss the appeal.”

(emphasis supplied)

In Roger Holland v. Government of Saskatchewan & Ors. (2008) 2 SCR 551  

the Canadian Supreme Court held:  

“The law to date has not recognized an action for negligent breach of   statutory duty. It is well established that mere breach of a statutory duty  does  not  constitute  negligence:  The  Queen  in  right  of  Canada v.  Saskatchewan Wheat  Pool  (1983)  1  SCR 205.  The  proper  remedy  for  breach  of  statutory  duty  by a  public  authority,  traditionally  viewed,  is  judicial review for invalidity.”

In Union of India v. United India Insurance Co.Ltd. – (1997) 8 SCC 683 this  

Court held:  

“…….But in East Suffolk Rivers Catchment Board v. Kent 1941 AC 74,  Lord Romer had stated:

Where a statutory authority is entrusted with a mere power it cannot be   made  liable  for  any  damage  sustained  by  a  member  of  the  public  by   reason of its failure to exercise that power.

In  Anns v.Merton London Borough [1977 (2) All ER 492] this principle  was somewhat deviated from. As stated earlier the plaintiff in  Anns had  sued  for  losses  to  flats  in  a  new  block  which  had  been  damaged  by  subsidence  caused  by  inadequate  foundations.  The  contention  that  the  Council  was  negligent  in  the  exercise  of  statutory  powers  to  inspect  foundations of new buildings giving rise to a claim for economic damage  suffered was upheld. This principle was however not accepted in Murphy  

41

to  the  extent  economic  looses  were  concerned.  According  to  Lord  Hoffman, Anns was not overruled in Murphy Brentwood District Council   [1990 (2) All ER 908] so far as physical injury resulting from omission to  exercise  statutory  powers  was  concerned  (p.  410).  A  duty  of  care  at  common law can be derived from the authority's duty in public law to give  proper consideration to the question" whether to exercise power or not  (p.411). This public law duty cannot by itself give rise to a duty of care.   A  public  body  almost  always  has  a  duty  in  public  law  to  consider   whether  it  should  exercise  its  powers  but  that  did  not  mean  that  it   necessarily  owed a duty  of  care  which might  require  that  the power   should  be  actually  exercised.  A  mandamus  could  require  future   consideration of the exercise of a power. But an action for negligence   looked back at what the authority ought to have done. Question is as to  when a public law duty to consider exercise of power vested by statute  would  create  a  private  law  duty  to  act,  giving  rise  to  a  claim  for  compensation against public funds '(p. 412). One simply cannot derive a  common law "ought"  from a statutory "may".  The distinction made by  Lord  Wilberforce  in  Anns between  'policy'  and  'operations'  is  an  inadequate  tool  with  which  to  discover  whether  it  was  appropriate  to  impose  a  duty of  care  or  not.  But  leaving  that  distinction,  it  does  not  always follow that the law should superimpose a common law duty of care  upon  a  discretionary  statutory  power  (p.413).  Apart  from  exceptions   relating to individual or societal reliance on exercise of statutory power, -   it is not reasonable to expect a service to be provided at public expense   and  also  a  duty  to  pay  compensation  for  loss  occasion  by  failure  to   provide  the  service.  An  absolute  rule  to  provide  compensation  would   increase the burden on public funds.

(emphasis supplied)

32. It is evident from the decision of this Court as also the decisions of the  

English and Canadian Courts that it is not proper to award damages against  

public  authorities  merely  because  there  has  been  some  inaction  in  the  

performance of their statutory duties or because the action taken by them is  

ultimately found to be without authority of law. In regard to performance of  

statutory  functions  and duties,  the  courts  will  not  award damages  unless  

there is malice  or  conscious  abuse.  The cases where damages have been  

42

awarded for direct negligence on the part of the statutory authority or cases  

involving doctrine of strict liability cannot be relied upon in this case to  

fasten  liability  against  MCD or  the  Licensing Authority.  The position of  

DVB is different, as direct negligence on its part was established and it was  

a proximate cause for the injuries to and death of victims. It can be said that  

in so far  as the licensee and DVB are concerned,  there was contributory  

negligence. The position of licensing authority and MCD is different. They  

were not the owners of the cinema theatre. The cause of the fire was not  

attributable to them or anything done by them. Their actions/omissions were  

not the proximate cause for the deaths and injuries. The Licensing Authority  

and MCD were merely discharging their statutory functions (that is granting  

licence in the case of licensing authority and submitting an inspection report  

or  issuing  a  NOC  by  the  MCD).  In  such  circumstances,  merely  on  the  

ground that the Licensing Authority and MCD could have performed their  

duties  better  or  more  efficiently,  they  cannot  be  made  liable  to  pay  

compensation  to  the  victims  of  the  tragedy.  There  is  no  close  or  direct  

proximity to the acts of the Licensing Authority and MCD on the one hand  

and the fire accident and the death/injuries of the victims.  But there was  

close and direct proximity between the acts of the Licensee and DVB on the  

one hand and the fire accident resultant deaths/injuries of victims. In view of  

the  well  settled  principles  in  regard  to  public  law liability,  in  regard  to  

43

discharge  of  statutory  duties  by  public  authorities,  which do not  involve  

malafides or abuse, the High Court committed a serious error in making the  

licensing authority and the MCD liable to pay compensation to the victims  

jointly and severally with the Licensee and DVB.  

33. We make it clear that the exoneration is only in regard to monetary  

liability to the victims. We do not disagree with the observations of the High  

Court that the performance of duties by the licensing authority and by MCD  

(in its limited sphere) was mechanical, casual and lackadaisical. There is a  

tendency on the part of these authorities to deal with the files coming before  

them as requiring mere paper work to dispose it. They fail to recognize the  

object of the law or rules, the reason why they are required to do certain acts  

and the consequences of non-application of mind or mechanical disposal of  

the application/requests which come to them. As rightly observed by Naresh  

Kumar’s  report,  there  is  a  lack  of  safety  culture  and lack  of  the will  to  

improve  performance.  The  compliance  with  the  procedure  and  rules  is  

mechanical. We affirm the observations of the High Court in regard to the  

shortcoming in the performance of their functions and duties by the licensing  

authority  and  to  a  limited  extent  by  MCD.  But  that  does  not  lead  to  

monetary liability.  

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Re: Questions (iii) and (iv)

34. The licensee argued that the entire liability should be placed upon the  

DVB. It was contended that DVB have installed a transformer of a capacity  

of 1000 KV without obtaining the statutory sanction/approval and without  

providing all the safety measures which it was duty bound to provide under  

the  relevant  Electricity  Rules,  and  therefore,  DVB  alone  should  be  

responsible for the tragedy. This contention has no merit. In fact none in the  

main hall (ground floor of the theatre) died. Those on the second floor also  

escaped. It is only those in the balcony caught in noxious fumes, who died of  

asphyxiation. The deaths were on account of the negligence and greed on the  

part of the licensee in regard to installation of additional seats, in regard to  

closing of  an exit  door,  parking of  cars  in front  of  transformer  room by  

increasing parking from 15 to 35 and other acts.  We therefore reject  the  

contention  that  DVB  should  be  made  exclusively  liable  to  pay  the  

compensation. We have already held that the Licensing Authority and MCD  

are  not  liable.  Therefore,  the  liability  will  be  85%  (Licensee)  and  15%  

(DVB).  

35. We may next consider whether the compensation awarded in this case  

is proper and in accordance with the principles of public law remedy. As  

45

noticed above, the High Court has awarded compensation to the legal heirs  

of 57 deceased victims at the rate of Rs.18 lakhs where the deceased was  

aged more than 20 years and Rs.15 lakhs where the deceased was aged 20  

years or less. It awarded Rs.1 lakh for each of the 103 injured. In regard to  

the  death  cases,  the  High  Court  adopted  the  following  rationale  :  Each  

person who was sitting in the balcony class where the rate of admission was  

Rs.50 per ticket, can be assumed to belong to a strata of society where the  

monthly income could not be less than Rs.15,000. Deducting one-third for  

personal expenses, the loss of dependency to the family would be Rs.10,000  

p.m. or Rs.120,000/- per annum. Applying a common multiplier of 15 in all  

cases where the deceased was more than 20 years, the compensation payable  

would be Rs.18 lakhs. The High Court deducted Rs.3 lakhs and awarded  

compensation at  a flat  rate of Rs.15,00,000/-  where the deceased was 20  

years or less. The High Court also awarded interest at 9% per annum on the  

compensation amount from the date of filing of the writ petition (14.7.1997)  

to the date of payment.

36.  Having awarded the said amounts the High Court proceeded to hold  

as follows :

“97. We have arrived at the compensation on the basis of our estimation of  the income of the victims of the unfortunate incident as we had no means  to know their exact income. We, therefore, leave it open to the injured as  

46

well as relatives of the deceased to claim compensation based on the exact  income of the victims by filing a suit or any other proceeding as may be  permissible in law and if a suit or any other proceedings claiming such  compensation are initiated within one year of this judgment, the same shall  not be dismissed only on the ground of limitation. The amount directed by  us to be payable under this judgment shall be adjusted against the amount  which  may  ultimately  be  granted  in  favor  of  such  persons  in  the  proceedings mentioned above.”

37. The contention of the Licensee is what could be awarded as a public  

law remedy is only a nominal interim or palliative compensation and if any  

claimants  (legal  heirs  of  the  deceased  or  any  injured)  wanted  a  higher  

compensation, they should file a suit for recovery thereof. It was contended  

that as what was awarded was an interim or palliative compensation,  the  

High Court could not have assumed the monthly income of each adult who  

died  as  being  not  less  than  Rs.15,000  and  then  determining  the  

compensation by applying the multiplier of 15 was improper. This gives rise  

to  the  following  question  :   Whether  the  income  and  multiplier  method  

adopted to finally determine compensation can be arrived while awarding  

tentative or palliative compensation by way of a public law remedy under  

Article 226 or 32 of the Constitution?

37.1) Rudul  Sah vs.  State  of  Bihar [1983 (4)  SCC 141]  was  one  of  the  

earliest  decisions  where  interim  compensation  was  awarded  by  way  of  

47

public law remedy in the case of an illegal detention. This Court explained  

the rationale for awarding such interim compensation thus:  

“This order will not preclude the petitioner from bringing a suit to recover  appropriate damages from the state and its erring officials. The order of  compensation  passed  by  us  is,  as  we  said  above,  in  the  nature  of  a  palliative.  We cannot leave the petitioner  penniless until  the end of his  suit,  the  many  appeals  and  the  execution  proceedings.  A  full-dressed  debate on the nice points of fact and law which takes place leisurely in  compensation suits will have to await the filing of such a suit by the poor  Rudul Sah.”

37.2) In  Nilabati Behera alias Lalita Behera vs. State of Orissa [1993 (2)  

SCC 746] this court observed :

“Therefore, when the court moulds the relief by granting "compensation"  in  proceedings  under  Article  32  or  226  of  the  Constitution  seeking  enforcement  or  protection  of  fundamental  rights,  it  does  so  under  the  public law by way of penalising the wrongdoer and fixing the liability for  the public wrong on the State which has failed in its public duty to protect  the fundamental  rights of the citizen.  The payment  of compensation  in  such cases is not to be understood, as it is generally understood in a civil   action  for  damages  under  the  private  law but  in  the  broader  sense  of  providing relief by an order of making 'monetary amends' under the public  law for the wrong done due to breach of public duty, of not protecting the  fundamental rights of the citizen.  The compensation is in the nature of  'exemplary damages' awarded against the wrong doer for the breach of its  public law duty and is independent of the rights available to the aggrieved  party to claim compensation under the private law in an action based on  tort, through a suit instituted in a court of competent jurisdiction or/and  prosecute the offender under the penal law.”

37.3) In  Sube Singh vs.  State of Haryana [2006 (3) SCC 178] this court  

held:

“It is now well-settled that award of compensation against the State is an  appropriate  and  effective  remedy  for  redressal  of  an  established  

48

infringement of a fundamental right under Article 21, by a public servant.  The quantum of compensation will, however, depend upon the facts and  circumstances  of  each  case.  Award  of  such  compensation  (by  way  of  public  law remedy)  will  not  come in the  way of  the  aggrieved person  claiming additional compensation in a civil court, in the enforcement of  the private law remedy in tort, nor come in the way of the criminal court  ordering  compensation  under  Section  357  of  Cr.  PC.  Award  of  compensation  as  a public  law remedy for violation  of  the fundamental  rights enshrined in Article 21 of the Constitution, in addition to the private  law remedy under the law of torts, was evolved in the last two-and-a-half  decades.”

38. Therefore what can be awarded as compensation by way of public law  

remedy need not only be a nominal palliative amount, but something more.  

It can be by way of making monetary amounts for the wrong done or by way  

of exemplary damages, exclusive of any amount recoverable in a civil action  

based  on tortuous  liability.  But  in  such  a  case  it  is  improper  to  assume  

admittedly without any basis, that every person who visits a cinema theatre  

and purchases a balcony ticket should be of a high income group person. In  

the year 1997, Rs.15,000 per month was rather a high income. The movie  

was a new movie with patriotic undertones. It is known that zealous movie  

goers, even from low income groups, would not mind purchasing a balcony  

ticket  to  enjoy  the  film  on  the  first  day  itself.  To  make  a  sweeping  

assumption that every person who purchased a balcony class ticket in 1997  

should have had a monthly income of Rs.15,000 and on that basis apply high  

multiplier of 15 to determine the compensation at a uniform rate of Rs.18  

lakhs in the case of persons above the age of 20 years and Rs.15 lakhs for  

49

persons below that age, as a public law remedy, may not be proper. While  

awarding compensation to a large group of persons, by way of public law  

remedy, it will be unsafe to use a high income as the determinative factor.  

The reliance upon Neelabati Behera in this behalf is of no assistance as that  

case related to a single individual and there was specific evidence available  

in regard to the income. Therefore the proper course would be to award a  

uniform  amount  keeping  in  view  the  principles  relating  to  award  of  

compensation in public law remedy cases reserving liberty to the legal heirs  

of  deceased  victims  to  claim additional  amount  wherever  they  were  not  

satisfied  with  the  amount  awarded.  Taking  note  of  the  facts  and  

circumstances, the amount of compensation awarded in public law remedy  

cases, and the need to provide a deterrent, we are of the view that award of  

Rs.10 lakhs in the case of persons aged above 20 years and Rs.7.5 lakhs in  

regard to those who were 20 years or below as on the date of the incident,  

would be appropriate. We do not propose to disturb the award of Rs.1 lakh  

each in the case of injured. The amount awarded as compensation will carry  

interest at the rate of 9% per annum from the date of writ petition as ordered  

by the High Court, reserve liberty to the victims or the LRs. of the victims as  

the case may be to seek higher remedy wherever they are not satisfied with  

the  compensation.  Any  increase  shall  be  borne  by  the  Licensee  (theatre  

owner) exclusively.

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39. Normally we would have let the matter rest there. But having regard  

to the special facts and circumstances of the case we propose to proceed a  

step further to do complete justice. The calamity resulted in the death of 59  

persons  and  injury  to  103  persons.  The  matter  related  to  a  ghastly  fire  

incident  of  1997. The victims association  has been fighting the cause of  

victims for more than 14 years. If at this stage, we require the victims to  

individually approach the civil court and claim compensation, it will cause  

hardship, apart from involving huge delay, as the matter will be fought in a  

hierarchy of courts. The incident is not disputed. The names and identity of  

the 59 persons who died and 103 persons who were injured are available and  

is  not  disputed.  Insofar  as  death  cases  are  concerned  the  principle  of  

determining compensation is streamlined by several decisions of this court.  

(See  for  example  Sarla  Verma v.  Delhi  Transport  Corporation (2009)  6  

SCC 121. If three factors are available the compensation can be determined.  

The first is the age of the deceased, the second is the income of the deceased  

and  the  third  is  number  of  dependants  (to  determine  the  percentage  of  

deduction for personal expenses). For convenience the third factor can also  

be excluded by adopting a standard deduction of one third towards personal  

expenses.  Therefore  just  two  factors  are  required  to  be  ascertained  to  

determine  the  compensation  in  59  individual  cases.  First  is  the  annual  

income of  the  deceased,  two third  of  which becomes  the  annual  loss  of  

51

dependency the  age  of  the  deceased  which will  furnish  the  multiplier  in  

terms of  Sarla Verma.  The annual  loss  of  dependency multiplied  by the  

multiplier will give the compensation.

40. As this is  a comparatively simple exercise,  we direct  the Registrar  

General of Delhi High Court to receive applications in regard to death cases,  

from the claimants (legal heirs of the deceased) who want a compensation in  

excess  of  what  has  been awarded that  is  Rs.10  lakhs/Rs.7.5  lakhs.  Such  

applications should be filed within three months from today. He shall hold a  

summary inquiry and determine the compensation. Any amount awarded in  

excess  of  what  is  hereby  awarded  as  compensation  shall  be  borne  

exclusively  by the theatre  owner.  To expedite  the process  the concerned  

claimants and the Licensee with their respective counsel shall appear before  

the Registrar without further notice. For this purpose the claimants and the  

theatre owner may appear before the Registrar on 10.1.2012 and take further  

orders in the matter. The hearing and determination of compensation may be  

assigned to any Registrar or other Senior Judge nominated by the Learned  

Chief Justice/Acting Chief Justice of the Delhi High Court. As far as the  

injured are concerned if  they are not satisfied with the sum of Rs.1 lakh  

which has been awarded it is open to them to approach the civil court for  

claiming higher compensation and if they do so within 3 months from today,  

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the same shall be entertained and disposed of in accordance with law. It is  

not possible to refer the injury cases for summary determination like death  

cases, as the principles are different and determination may require a more  

detailed enquiry.       

Re: Punitive damages

41. We may next deal with the question of award of punitive damages of  

Rs.2,50,00,000/-  against  the  licensee.  Before  examining  whether  such  

punitive damages could be awarded at all, we have to notice the apparent  

mistake in arriving at the sum of Rs.2.5 crores.  The High Court has stated  

that the licensee should be made liable to pay punitive damages to the extent  

of profit which it would have earned by selling tickets in regard to extra  

seats unauthorisedly and illegally sanctioned by the authorities and installed  

by the Licensee. The High Court has not stated the arithmetical calculation  

of arriving at Rs.2,50,00,000/- but it has indicated that the said sum has been  

assessed as the income earned by them by selling tickets for additional 250  

seats between 1979 and 1996. The High Court has apparently calculated the  

ticket revenue at the rate of Rs.50/- per ticket for 52 additional seats for three  

shows a day to arrive at a sum of Rs.7,800/-  per day. For 17 years, this  

works out to Rs. Rs.4,83,99,000/-. Presumably, the High Court deducted Rs.  

Rs.2,33,99,000/- towards entertainment tax etc., to arrive at Rs.2.5 crores as  

53

profit from these additional seats. Initially the seats were 250. Forty three  

additional seats were sanctioned on 30.9.1976. Subsequently, the additional  

seats  were  cancelled.  However,  the  Delhi  High  Court  permitted  the  

continuance of such number of seats which were permissible as per Rules.  

Therefore, all the 52 seats cannot be held to be illegal. What were illegal  

seats  were  the  15  seats  that  were  added  by  securing  an  order  dated  

4.10.1980. The remaining 37 seats were found to be valid by the authorities.  

Therefore, if at all the licensee is to be made liable to reimburse the profits  

earned from illegal seats, it should be only in regard to these 15 seats and the  

eight seats in the Box which was the cause for closing one of the exits. In so  

far as the eight seats in the owner’s box, though it is alleged that they were  

intended to be used only as complimentary seats, for the purpose of award of  

punitive damages, they are treated at par with other balcony seats. The High  

Court also wrongly assumed that the ticket value to be Rs.50/- from 1979 to  

1996, because it was Rs.50/- in the year 1997 for a balcony seat. Another  

erroneous assumption made is that for all shows on all the days, all these  

additional seats would be fully occupied. On a realistic assessment, (at a net  

average  income of  Rs.12/-  per  seat  with  average  50% occupancy for  23  

seats)  the  profits  earned  from  these  seats  for  17  years  would  at  best  

Rs.25,00,000/-. Be that as it may.  

54

42. We may next consider the appropriateness and legality of award of  

punitive damages. In  this  context,  we  may  refer  to  the  decision  in  M C  

Mehta vs. Union of India – 1987 (1) SCC 395 wherein this Court considered  

the question as to what should be the measure of liability of an enterprise  

which is  engaged in a  hazardous or  inherently  dangerous  industry,  if  by  

reason of an accident occurring in such industry, persons die or are injured.  

This Court held:  

“…In  a  modem  industrial  society  with  highly  developed  scientific  knowledge  and  technology  where  hazardous  or  inherently  dangerous  industries 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 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 challenge 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 industrialized 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 recognise 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  dangerous  industries  which  are  concomitant to an industrial economy, there is no reason why we should  hesitate to evolve such principle of liability merely because it has not been  

55

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 non- delegable 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……

….Such hazardous or inherently dangerous activity for private profit can  be  tolerated  only  on  condition  that  the  enterprise  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 activity 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  accident  in  the  operation of such hazardous or inherently dangerous 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 preceding paragraph must be correlated to  the magnitude and capacity of the enterprise because such compensation   must have deterrent 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 all the hazardous or  inherently activity by the enterprise.”  

43. What  has  been  awarded  is  not  exactly  punitive  damages  with  

reference to the magnitude or capacity of the enterprise. All that the High  

Court  pointed  out  was  that  the  Licensee  has  installed  additional  seats  

56

illegally. That illegality contributed to the cause for the death and injuries, as  

they slowed down the exiting of the occupant’s balcony. If people could  

have got out faster  (which they could have if the gangway was wider as  

before, and if there had been two exits as before, instead of only one) many  

would not  have died of asphyxiation.  Therefore the Licensee is not  only  

liable to pay compensation for the death and injuries, but should, in the least  

be denied the profits/benefits out of their illegal acts. In that sense it is not  

really punitive, but a kind of negative restitution. We therefore uphold in  

principle the liability  of  the Licensee  to return and reimburse  the profits  

from the illegally installed seats, but reduce it from Rs.2.5 crores to Rs.25  

lakhs for the reasons stated in the earlier para. The award of the said sum, as  

additional  punitive damages,  covers two aspects.  The first  is  because the  

wrongdoing is outrageous in utter disregard of the safety of the patrons of  

the theatre. The second is the gravity of the breach requiring a deterrent to  

prevent similar further breaches.  

General observations and suggestions  

44. The  Parliament  has  enacted  the  Disaster  Management  Act,  2005.  

Section 1(3) thereof provides that it shall come into force on such dates as  

the Central Government may by notification in the Official Gazette appoint;  

and different dates may be appointed for different provisions of the Act for  

57

different States, and any reference to commencement in any provisions of  

the  Act  in  relation  to  any State  shall  be construed as  a  reference  to  the  

commencement of that provision in that State. All the provisions of the Act  

have not  been brought into effect  in all  the States.  Having regard to the  

object of the Act, bringing the Act into force promptly would be in public  

interest. In so far as Delhi is concerned, by notification dated 19.3.2008, the  

Government  of  NCT  of  Delhi  has  established  the  Delhi  Disaster  

Management Authority for the national capital territory of Delhi. A disaster  

management  helpline  number  has  been  made  operational.  Emergency  

operating centre and relief centres have been established, A State Disaster  

Response Force has been established. Several volunteers have been given  

training in disaster management. Attempts are being made to hold regular  

mockdrills in regard to various types of disasters (like earthquakes, flood,  

fire, road accidents, industrial and chemical disasters, terrorists attacks, gas  

leaks etc.). Steps are taken to contact the public in regard to several natural  

and man-made disasters. The key to successfully meeting the consequences  

of disasters is preparedness. There can be no complacency. Human tendency  

is to be awake and aware in the immediate aftermath of a disaster. But as the  

days  pass,  slowly  the  disaster  management  equipment  and  disaster  

management  personnel  allowed  to  slip  away  from  their  readiness.  Only  

when the next disaster takes place, there is sudden awakening. In regard to  

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preparedness to meet  disasters  there could be no let  up in the vigil.  The  

expenditure required for maintaining a high state of alert and readiness to  

meet disasters may appear to be high and wasteful regarding ‘non-disaster  

periods’ but the expenditure and readiness is absolutely must. Be that as it  

may.

45. While affirming the several suggestions by the High Court, we add the  

following  suggestions  to  the  government  for  consideration  and  

implementation :  

(i) Every licensee (cinema theatre) shall  be required to draw up an  

emergency evacuation plan and get it approved by the licensing  

authority.  

(ii) Every  cinema  theatre  shall  be  required  to  screen  a  short  

documentary  during  every  show  showing  the  exits,  emergency  

escape routes and instructions as to what to do and what not to do  

in the case of fire or other hazards.  

(iii) The staff/ushers in every cinema theatre should be trained in fire  

drills and evacuation procedures to provide support to the patrons  

in case of fire or other calamity.  

(iv) While the theatres are entitled to regulate the exit through doors  

other than the entry door, under no circumstances, the entry door  

(which can act as an emergency exit) in the event of fire or other  

emergency) should be bolted from outside. At the end of the show,  

the ushers may request the patrons to use the exit doors by placing  

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a temporary barrier across the entry gate which should be easily  

movable.

(v) There  should  be  mandatory  half  yearly  inspections  of  cinema  

theatres by a senior officer from the Delhi Fire Services, Electrical  

Inspectorate  and  the  Licensing  Authority  to  verify  whether  the  

electrical  installations  and  safety  measures  are  properly  

functioning and take action wherever necessary.  

(vi) As the cinema theatres have undergone a change in the last decade  

with more and more multiplexes coming up, separate rules should  

be made for Multiplex Cinemas whose requirements and concerns  

are different from stand-alone cinema theatres.  

(vii) An  endeavour  should  be  made  to  have  a  single  point  nodal  

agency/licensing  authority  consisting  of  experts  in  structural  

Engineering/building, fire prevention, electrical systems etc. The  

existing system of police granting licences should be abolished.  

(viii) Each  cinema  theatre,  whether  it  is  a  multiplex  or  stand-alone  

theatre should be given a fire safety rating by the Fire Services  

which  can  be  in  green  (fully  compliant),  yellow  (satisfactorily  

compliant),  red  (poor  compliance).  The  rating  should  be  

prominently displayed in each theatre so that there is awareness  

among the patrons and the building owners.  

(ix) The  Delhi  Disaster  Management  Authority,  established  by  the  

Government of NCT of Delhi may expeditiously evolve standards  

to  manage  the  disasters  relating  to  cinema  theatres  and  the  

guidelines in regard to ex gratia assistance. It should be directed to  

conduct mock drills in each cinema theatre at least once in a year.  

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Conclusions  

46. In view of the foregoing, we dispose of the appeals as follows:  

(i) CA Nos.7114-15 of 2003 filed by the Municipal Corporation of Delhi  

is allowed and that part of the order dated 24.4.2003 of the Delhi High Court  

holding MCD jointly and severally liable to pay compensation to the victims  

of the Uphaar Fire tragedy, is set aside.

(ii) CA No.7116 of 2003 filed by the Licensing Authority is allowed and  

that part of the order dated 24.4.2003 of the Delhi High Court holding the  

Licensing Authority jointly and severally liable to pay compensation to the  

victims of the Uphaar Fire tragedy, is set aside.

(iii)  The writ petition filed by the Victims Association on behalf of the  

victims,  to  the  extent  it  seeks  compensation  from  MCD  and  Licensing  

Authority is rejected.

(iv) The licensee (appellant in CA No.6748 of 2004) and  Delhi Vidyut  

Board are held jointly and severally liable to compensate the victims of the  

Uphaar fire tragedy. Though their liability is joint and several, as between  

them, the liability shall be 85% on the part the licensee and 15%  on the part   

of DVB.

(v) CA No.6748 of 2004 is allowed in part and the judgment of the High  

Court is modified as under :  

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(a) The compensation awarded by the High Court in the case of death  

is reduced from Rs.18 lacs to Rs.10 lacs (in the case of those aged  

more than 20 years) and Rs.15 lacs to Rs. 7.5 lacs (in the case of  

those aged 20 years and less).  The said sum is payable to legal  

representatives of the deceased to be determined by a brief and  

summary enquiry by the Registrar General (or nominee of learned  

Chief Justice/Acting Chief Justice of the Delhi High Court).  

(b) The compensation of Rs.One lakh awarded by the High Court in  

the case of each of the 103 injured persons is affirmed.

(c) The  interest  awarded  from the  date  of  the  writ  petition  on  the  

aforesaid sums at the rate of 9% per annum is affirmed.  

(d) If the legal representatives of any deceased victim are not satisfied  

with  the  compensation  awarded,  they  are  permitted  to  file  an  

application for compensation with supporting documentary proof  

(to show the age and the income), before the Registrar General,  

Delhi  High  Court.  If  such  an  application  if  filed  within  three  

months,  it  shall  not  be  rejected  on  the  ground  of  delay.  The  

Registrar  General  or  such  other  Member  of  Higher  Judiciary  

nominated by the learned Chief Justice/Acting Chief Justice of the  

High  Court  shall  decide  those  applications  in  accordance  with  

paras above and place the matter before the Division Bench of the  

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Delhi High Court for consequential formal orders determining the  

final compensation payable to them.  

(e) The injured victims who are not satisfied with the award of Rs.One  

lakh  as  compensation,  may  approach  the  civil  court  in  three  

months, in which event the claims shall not be dismissed on the  

ground of delay.

(f) While disbursing the compensation amount, any ex gratia payment  

by the Central Government/Delhi Government shall not be taken  

into account. But other payments on account shall be taken note of.

(g) As a consequence, if DVB has deposited any amount in excess it  

shall  be  entitled  to  receive  back the  same  from any  amount  in  

deposit or to be deposited.  

(h) The punitive damages ordered to be paid by the Licensee, to the  

Union of India, (for being used for setting up a Central Accident  

Trauma Centre) is reduced from Rs.2.5 crores to Rs.25 lakhs.

(i) The  decisions  of  the  High  Court  and  this  Court  having  been  

rendered in a public law jurisdiction, they will not come in the way  

of any pending criminal proceedings being decided with reference  

to the evidence placed in such proceedings.  

63

K. S. Radhakrishnan J.  

1. I fully endorse the reasoning as well as the conclusions reached by my  

esteemed brother.  All the same, I would like to add a few thoughts which  

occurred to my mind on certain issues which arose for consideration in these  

matters.

2. Private  law  causes  of  action,  generally  enforced  by  the  claimants  

against  public bodies and individuals,  are negligence,  breach of statutory  

duty, misfeasance in public office etc.  Negligence as a tort is a breach of  

legal duty to take care which results in damage or injury to another.  Breach  

of statutory duty is conceptually separate and independent from other related  

torts such as negligence though an action for negligence can also arise as a  

result  of cursory and malafide exercise of statutory powers.  Right of an  

aggrieved person to sue in ordinary civil  courts  against  the State and its  

officials and private persons through an action in tort and the principles to be  

followed in considering such claims are well settled and require no further  

elucidation.  We are in these appeals concerned with the claims resulting in  

the death of 59 patrons and injury to 103 patrons in a fire erupted at Uphaar  

Cinema Theater, South Delhi on 13.6.1997.  

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3. We are  primarily  concerned with  the  powers  of  the  Constitutional  

Courts in entertaining such monetary claims raised by the victims against the  

violation  of  statutory  provisions  by  licensing  authorities,  licensees,  and  

others  affecting  the  fundamental  rights  guaranteed  to  them  under  the  

Constitution.    Constitutional  Courts  in  such  situations  are  expected  to  

vindicate  the  parties  constitutionally,  compensate  them  for  the  resulting  

harm and also to deter future misconduct.    Constitutional Courts seldom  

exercise their constitutional powers to examine a claim for compensation,  

merely due to violation of some statutory provisions resulting in monetary  

loss to the claimants.    Most of the cases in which Courts have exercised  

their  constitutional  powers  are  when there  is  intense  serious  violation  of  

personal  liberty,  right  to  life  or  violation of  human rights.   But,  even in  

private  law  remedy  against  the  State  and  its  instruments  they  claim  

immunity on the plea that they are discharging sovereign functions, even in  

cases where there is violation of personal liberty.    

4. This Court  in  State  of  Rajasthan v.  Vidyawati AIR 1962 SC 933,  

rejected claim of  the State  sovereign immunity  and upheld the award of  

compensation  in  tort  for  the  death  of  a  pedestrian  due  to  the  rash  and  

negligent driving of a Government jeep.   In  Kasturi Lal v. State of U.P.  

AIR  1965  SC  1039,  drawing  distinction  between  sovereign  and  non-

65

sovereign functions, the apex Court rejected the plea of arrest in violation of  

the U.P. Police Regulation on the ground that the arrest was made as a part  

of the sovereign powers of the State.   Kasturi Lal was a Constitution Bench  

judgment.  However, in  N. Nagendra Rao v. State of A.P., AIR 1994 SC  

2663,  a  three  Judge Bench of  this  Court  drew a  distinction  between the  

sovereign and non sovereign functions of the State and held as follows:-

“No legal or political system today can place the State above “Law” as it is  unjust and unfair for a citizen to be deprived of his property illegally when  negligent act by the officers of the State without any remedy.  From sincerity,   efficiency and dignity of  the  State  as  a  juristic  person,  propounded in  the  nineteenth century as sound sociological basis for State immunity, the circle  has gone round and the emphasis is now more on liberty, equality and the rule  of law.  The modern social thinking of progressive societies and the judicial  approach is to do away with archaic State protection and place the State or the  Government  on a  par  with any other  juristic  legal  entity.   Any watertight  compartmentalization  of  the  functions  of  the State  as  “sovereign  and non- sovereign”  or  “governmental  and  non-governmental”  is  not  sound.   It  is  contrary to modern jurisprudential thinking.  The need of the State to have  extraordinary powers cannot be doubted.  But with the conceptual change of  statutory power being statutory duty for the sake of the society and the people,  the claim of a common man or ordinary citizen cannot be thrown out, merely  because it was done by an Officer of the State even though it was against law  and negligent.  Needs of the State; duty of its officials and right of the citizens  are required to be reconciled, so that the rule of law in a Welfare State is not  shaken”.   

The Court further held:

“The determination of vicarious liability of the State being linked with the  negligence of his officers, if they can be sued personally for which there is no  dearth of authority and law of misfeasance in discharge of public duty having  marched ahead, there is no rationale for the proposition that even if the officer  is liable, the State cannot be sued.”

66

5. The Court further opined that the ratio of  Kasturi Lal is available to  

those rare and limited cases where the statutory authority acts as a delegate  

of such functions for which it cannot be sued in a court of law.  The court  

opined that the same principle would not be available in large number of  

other activities carried on by the State by enacting a law in its legislative  

competence.   

6. The  general  principle  of  law  enunciated  in  Rylands v.  Fletcher,   

(1868) LR 3 HL 330,  Donoghue v.  Stevenson, [1932] AC 562, however,  

still  guides  us.   In  several  situations,  where  officials  are  dealing  with  

hazardous  or  explosive  substance,  the  maxim  re  ipsa loquitor  applies.  

Reference may be made to the decision in Lloyde v. Westminster, [1972] All  

E.R. 1240,  Henderson v. eHenry Jenkins & Sons, [1969] 2 All E.R. 756.  

Principles  laid  down  in  Donoghue  v.  Stevenson,  which  highlighted  the  

neighbour principle as a test to determine whether a potential duty of care  

exists,  however is held to be not applicable to all  fact  situations.    Lord  

Weilberfoce enunciated a dual  test  in  Anns v.  Merton London Borough   

Council [1978]  AC  728,  of  existence  of  proximity  and  reasonable  

foreseeability and a failure to take care that causes harm to the claimant.  

The House of Lords, however, in  Murphy v. Brentwood Dsitrict Council   

[1990] 3 WLR 414, however, overruled Anns on the ground that there was  

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no duty to take care on the legal authority to prevent power economic loss  

occurring.  House of Lords, however, in Caparo Industries plc v. Dickman  

[1990] 2 AC 605 = 1990 All E.R. 568 laid down three tests i.e. the claimants  

must show that harm was reasonably foreseeable, the relationship between  

the parties was proximate and that the imposition of liability would be just,  

fair and reasonable. Later in  X (Minors)  v. Bedfordshire County Council,  

[1995] 2 A.C. 633, Lord Browne-Wilkinson stated that an administrative act  

carried out in the exercise of a statutory discretion can only be actionable in  

negligence if the act is so unreasonable that it falls outside the proper ambit  

of that discretion.  In effect, this would require that the act to be unlawful in  

the  public  law  sense  under  the  Wednesbury  principle.   House  of  Lords  

further held in  Barrett v. Enfield London Borough Council  [2001] 2 AC  

550 that where a plaintiff  claims damages for  personal injuries which he  

alleges have been caused by decisions negligently taken in the exercise of a  

statutory discretion, and provided that the decisions do not involve issues of  

policy which the courts are ill-equipped to adjudicate upon, it is preferable  

for  the  courts  to  decide  the  validity  of  the  plaintiff’s  claim by applying  

directly  the  common  law  concept  of  negligence  than  by  applying  as  a  

preliminary test the public law concept of Wednesbury unreasonableness to  

determine if the decision fell outside the ambit of the statutory discretion.    

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7. Later, House of Lords speaking through Lord Slynn stated as follows:  

“the House decided in Barrett v Enfield London Borough Council (supra)   

that  the  fact  that  acts  which are  claimed  to  be  negligent  are  carried  out  

within the ambit  of a statutory discretion is not  in itself  a reason why it  

should be held that no claim for negligence can be brought in respect  of  

them.  It is only where what is done has involved the weighing of competing  

public interests or has been dictated by considerations on which Parliament  

could not have intended that the courts would substitute their views for the  

views of Ministers or  officials  that the courts will  hold the issue is non-

justiciable on the ground that the decision was made in the exercise of a  

statutory  discretion.”   Both  Barrett and  Phelps,  it  may  be  noted,  have  

highlighted the fact that a public body may be liable for acts done which fell  

within its ambit of discretion without the claimant also having to show that  

the act done was unlawful in the public law sense, so long as the decision  

taken or act done was justiciable.   

8. Above decisions would indicate that in England also there is a lot of  

uncertainty when claims are raised against public bodies for negligence or  

violation of statutory duties.  It is worth noticing that the Law Commission,  

U.K. in its  consultation paper on “Administrative Redress” proposed that  

Judges  should  apply  a  ‘principle  of  modified  corrective  justice’  when  

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deciding  negligence  claims  against  public  bodies.   (Law  Commission  

Consultation  Paper  No.187  (2008).   The  Law Commission  consequently  

proposed the introduction of a new touchstone of liability: ‘serious fault’.  

The Law Commission’s most far-reaching reform proposals relate to “court  

based redress” which suggests ‘the creation of a specific regime for public  

bodies’ based around a number of common elements such as Judges would  

apply a standard of ‘serious fault’ in both judicial review and negligence  

proceedings.   

9. Richard  Mullender  in  an  essay  on  Negligence,  Public  Bodies  and  

Ruthlessness which appeared in “The Modern Law Review” (2009) 72 (6)  

MLR 961-98, argues for a reform of negligence law (as it applies to public  

bodies) that is different from that proposed by the Law Commission, such as  

application of the proportionality principle at the third stage of the duty of  

care test applied in Caparo Industries case.   

10. Development taking place in U.K. has been highlighted only to show  

the uncertainty that one faces while deciding claims against public bodies  

and its officials.    But when we look at the issues from the point of violation  

of fundamental rights, such as personal liberty, deprivation of life etc., there  

is  unanimity  in  approach  by  the  Courts  in  India,  U.K.  and  U.S.A.  and  

various other countries, that the Constitutional Courts have a duty to protect  

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those rights and mitigate the damage caused.  Violation of such rights often  

described as constitutional torts.   

11. The concept of Constitutional Tort and Compensatory jurisprudence  

found its expression in  Devaki Nandan Prasad v.  State of Bihar 1983 (4)   

SCC 20 where the petitioner’s claim for pension was delayed for over twelve  

years.  This Court awarded Rs.25,000/- as against authorities after having  

found  that  the  harassment  was  intentional,  deliberate  and  motivated.  

Liability to compensate for infringement of fundamental rights guaranteed  

under Article 21 was successfully  raised in  Khatri  & Others v.  State of   

Bihar & Others (1981) 1 SCC 627 (Bhagalpur Blinded prisoners case).  

In Rudal Shah v. State of Bihar, (1983) 4 SCC 141, this Court found that  

the petitioner’s    prolonged detention in the prison after his acquittal was  

wholly unjustified and illegal and held that Article 21 will be denuded of its  

significant content if the power of the Supreme Court was limited to passing  

orders  of  release  from  illegal  detention.  Court  ordered  that  to  prevent  

violation of that right and secure due compliance with the mandate of Article  

21, it has to mulct its violators in the payment of monetary compensation.  

Court held that right to compensation is thus some palliative for the unlawful  

acts of instrumentalities of the State which act in the name of public interest  

and which present  for  their  protection the powers of  the State  as  shield.  

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Reference may also be made to the judgments of this Court in Sebastian M.  

Hongray v. Union of India, AIR 1984 SC 1026, Bhim Singh v. State of J.   

& K. (AIR 1986 SC 494),  Saheli v. Commissioner of Police, Delhi, (AIR  

1990 SC 513), Inder Singh v. State of Punjab (AIR 1995 SC 1949), Radha  

Bai  v.  Union  Territory  of  Pondicherry AIR  1995  SC  1476,  Lucknow  

Development Authority v. M.K. Gupta (AIR 1994 SC 787), Delhi Domestic   

Working Women’s Forum v. Union of India, (1995) 1 SCC 14, Gudalure  

M.J. Cherian v. Union of India 1995 Supp (3)  SCC 387,  Sube Singh v.  

State of Haryana 2006 (3) SCC 178 etc.  Specific reference may be made to  

the decision of this Court in Nilabati Behera v. State of Orissa (AIR 1993  

SC 1960), wherein this Court held that the concept of sovereign immunity is  

not  applicable  to  the  cases  of  violation  of  fundamental  rights  and  

summarized as follows:

“A claim in public law for compensation for contravention of human rights  and  fundamental  freedoms,  the  protection  of  which  is  guaranteed  in  the  Constitution is an acknowledged remedy for enforcement and protection of  such rights, and such a claim based on strict liability made by resorting to a  constitutional remedy provided for the enforcement of a fundamental right is  distinct from, and in addition to, the remedy in private law for damages for  the  tort  resulting  from the  contravention  of  the  fundamental  right.   The  defence of sovereign immunity being inapplicable, and alien to the concept  of  guarantee  of  fundamental  rights,  there  can  be  no  question  of  such  a  defence being available  in  the constitutional  remedy.   It  is  this  principle  which  justifies  award  of  monetary  compensation  for  contravention  of  fundamental  rights  guaranteed  by the  Constitution  when that  is  the  only  practicable  mode  of  redress  available  for  the  contravention  made  by the  State  or  its  servants  in  the  purported  exercise  of  their  powers,  and  enforcement of the fundamental right is claimed by resort to the remedy in  public law under the Constitution by recourse to Articles 32 and 226 of the  Constitution.”   

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12. Courts have held that due to the action or inaction of the State or its  

offices, if the fundamental rights of a citizen are infringed then the liability  

of  the  State,  its  officials  and  instrumentals  is  strict.    Claim  raised  for  

compensation in such a case is not a private law claim for damages, under  

which the damages recoverable are large.  Claim made for compensation in  

public  law is  for  compensating  the  claimants  for  deprivation  of  life  and  

personal liberty which has nothing to do with a claim in a private law claim  

in tort in an ordinary civil court.

13. This Court in  Union of India v. Prabhakaran  (2008) (9) SCC 527,  

extended the principle to cover public utilities like the railways, electricity  

distribution companies, public corporations and local bodies which may be  

social utility undertakings not working for private profit.  In Prabhakaran  

(supra) a woman fell on a railway track and was fatally run over and her  

husband demanded compensation.  Railways argued that she was negligent  

as she tried to board a moving train. Rejecting the plea of the Railways, this  

Court held that her “contributory negligence” should not be considered in  

such untoward incidents – the railways has “strict liability”.  A strict liability  

in  torts,  private  or  constitutional  do  not  call  for  a  finding  of  intent  or  

negligence.  In such a case highest degree of care is expected from private  

and public  bodies  especially  when the  conduct  causes  physical  injury  or  

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harm to  persons.   The  question  as  to  whether  the  law  imposes  a  strict  

liability on the state and its officials primarily depends upon the purpose and  

object of the legislation as well.  When activities are hazardous and if they  

are inherently dangerous the statute expects highest degree of care and if  

someone is injured because of such activities, the State and its officials are  

liable even if they could establish that there was no negligence and that it  

was not intentional.  Public safety legislations generally falls in that category  

of breach of statutory duty by a public authority.  To decide whether the  

breach is actionable,  the Court  must  generally look at  the statute and its  

provisions and determine whether legislature in its wisdom intended to give  

rise to a cause of action in damages and whether the claimant is intended to  

be protected.   

14. But, in a case, where life and personal liberty have been violated the  

absence of any statutory provision for compensation in the Statute is of no  

consequence.   Right to life guaranteed under Article 21 of the Constitution  

of  India  is  the  most  sacred  right  preserved  and  protected  under  the  

Constitution,  violation  of  which  is  always  actionable  and  there  is  no  

necessity of statutory provision as such for preserving that right.  Article 21  

of the Constitution of India has to be read into all  public safety statutes,  

since the prime object of public safety legislation is to protect the individual  

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and to compensate him for the loss suffered.  Duty of care expected from  

State  or  its  officials  functioning  under  the  public  safety  legislation  is,  

therefore,  very  high,  compared  to  the  statutory  powers  and  supervision  

expected from officers functioning under the statutes like Companies Act,  

Cooperative Societies Act and such similar legislations.  When we look at  

the various provisions of the Cinematographic Act, 1952 and the Rules made  

thereunder, the Delhi Building Regulations and the Electricity Laws the duty  

of care on officials was high and liabilities strict.   

CONSTITUTIONAL TORTS – MEASURE OF DAMAGES

15. Law is well settled that a Constitutional Court can award monetary  

compensation  against  State  and  its  officials  for  its  failure  to  safeguard  

fundamental rights of citizens but there is no system or method to measure  

the  damages  caused  in  such  situations.   Quite  often  the  courts  have  a  

difficult  task  in  determining  damages  in  various  fact  situations.   The  

yardsticks normally adopted for determining the compensation payable in a  

private tort  claims are not as such applicable when a constitutional court  

determines  the  compensation  in  cases  where   there  is  violation  of  

fundamental rights guaranteed to its citizens.  In  D.K. Basu vs.  Union of   

India (1997) 1 SCC 416, a Constitution Bench of this Court held that there  

is no strait jacket formula for computation of damages and we find that there  

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is no uniformity or yardstick followed in awarding damages for violation of  

fundamental  rights.    In  Rudal  Shah’s  case (supra)  this  Court  used  the  

terminology “Palliative” for measuring the damages and The formula of “Ad  

hoc” was applied in Sebastian Hongary’s case (supra) the expression used  

by this Court for determining the monetary compensation was “Exemplary”  

cost and the formula adopted was “Punitive” .  In  Bhim Singh’s  case, the  

expression used by the Court was “Compensation” and method adopted was  

“Tortious formula”. In D.K. Basu v. Union of India (supra) the expression  

used  by  this  Court  for  determining  the  compensation  was  “Monetary  

Compensation”.  The formula adopted was “Cost to Cost” method.  Courts  

have not, therefore, adopted a uniform criteria since no statutory formula has  

been laid down.   

16. Constitutional  Courts  all  over  the  world  have  to  overcome  these  

hurdles.   Failure  to  precisely  articulate  and  carefully  evaluate  a  uniform  

policy as against State and its officials would at times tend the court to adopt  

rules  which  are  applicable  in  private  law  remedy  for  which  courts  and  

statutes have evolved various methods, such as loss earnings, impairment of  

future earning capacity,  medical  expenses,  mental  and physical  suffering,  

property damage etc.  Adoption of those methods as such in computing the  

damages for violation of constitutional torts may not be proper. In  Delhi  

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Domestic Working Women’s Forum  v.  Union of India  (supra) the apex  

Court laid down parameters in assisting the victims of  rape  including the  

liability  of  the State  to provide compensation to  the victims and held as  

follows :-

“It is necessary, having regard to the directive principles contained under Article  38(1) of the Constitution of India to set up Criminal Injuries Compensation Board.  Rape victims  frequently  incurred  substantial  financial  loss.   Some,  for  example  were too traumatized  to continue in employment.  Compensation for victims shall  be awarded by the Court on conviction of the offender and by the Criminal Injuries  Compensation Board whether or not a conviction has taken place.  The Board will  take into account the pain, suffering and shock as well as loss of earnings due to  pregnancy and the expenses of the child but if it is occurred as a result of rape.”

17. Legal liability in damages exist solely as a remedy out of private law  

action in tort which is generally time consuming and expensive and hence  

when  fundamental  rights  are  violated  claimants  prefer  to  approach  

constitutional courts for speedy remedy.  Constitutional courts,  of course,  

shall  invoke  its  jurisdiction  only  in  extraordinary  circumstances  when  

serious  injury  has  been  caused  due  to  violation  of  fundamental  rights  

especially  under  Article  21  of  the  Constitution  of  India.   In  such  

circumstances the Court can invoke its own methods depending upon the  

facts and circumstances of each case.

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Constitutional Torts and Punitive Damages

18. Constitutional  Courts’  actions  not  only  strive  to  compensate  the  

victims  and  vindicate  the  constitutional  rights,  but  also  to  deter  future  

constitutional misconduct without proper excuse or with some collateral or  

improper motive.   Constitutional courts can in appropriate cases of serious  

violation  of  life  and  liberty  of  the  individuals  award  punitive  damages.  

However, the same generally requires the presence of malicious intent on the  

side  of  the  wrong  doer,  i.e.  an  intentional  doing  of  some  wrongful  act.  

Compensatory  damages  are  intended  to  provide  the  claimant  with  a  

monetary amount necessary to recoup/replace what was lost, since damages  

in tort are generally awarded to place the claimants in the position he would  

have been in, had the tort not taken place which are generally quantified  

under the heads of general damages and special damages.  Punitive damages  

are intended to reform or to deter the wrong doer from indulging in conduct  

similar to that which formed the basis for the claim.  Punitive damages are  

not intended to compensate the claimant which he can claim in an ordinary  

private  law  claim  in  tort.   Punitive  damages  are  awarded  by  the  

constitutional  court  when  the  wrong  doer’s  conduct  was  egregiously  

deceitful.   Lord  Patrick  Devlin  in  leading  case  on  the  point  Rookes  v.   

Barnard [1964] All E.R. 367 delineated certain circumstances which satisfy  

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the test for awarding punitive damages such as the conduct must have been  

oppressive,  arbitrary,  or  unconstitutional,  the  conduct  was  calculated  to  

make  profit  for  the  wrong doer  and that  the  statute  expressly  authorizes  

awarding  of  punitive  damages.   Above  principles  are,  however,  not  

uniformly  followed  by  English  Courts  though  the  House  of  Lords  in  a  

decision in Attorney-General Vs. Blake [2001] 1 AC 268, awarded punitive  

damages when it was found the defendant had profited from publishing a  

book and was asked to give an account of his profits gained from writing the  

book.  In this case where the wrong doer was made to give up the profits  

made, through restitution for wrongs, certainly the claimant gained damages.  

In United States, in a few States, punitive damages are determined based on  

statutes.  But often criticisms are raised because of the high imposition of  

punitive  damages  by  courts.   The  Supreme  Court  of  United  States  has  

rendered several decisions limiting the awards of punitive damages through  

the due process of law clauses of the Fifth and Fourteenth Amendments.  In  

BMW of North America Inc. v. Gore  517 U.S. 559 (1996) the Court ruled  

that the punitive damages must be reasonable, as determined based on the  

degree of reprehensibility of the conduct, the ratio of punitive damages to  

compensatory damages and any criminal or civil penalties applicable to the  

conduct.  In Philip Morris USA v. Williams 549 U.S. 346 (2007), the Court  

ruled that the award of punitive damages cannot be imposed for the direct  

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harm that the misconduct caused to others, but may consider harm to others  

as a function of determining how reprehensible it was.  There is no hard and  

fast  rule to measure the punitive damages to determine such a claim.  In  

United States in number of cases the Court has indicated that the ratio 10:1  

or  higher  between  punitive  and  compensatory  damages  is  held  to  be  

unconstitutional.   Several  factors  may  gauge  on  constitutional  court  in  

determining  the  punitive  damages  such  as  contumacious  conduct  of  the  

wrong doer, the nature of the statute,  gravity of  the fault  committed,  the  

circumstances etc.  Punitive damages can be awarded when the wrongdoers’  

conduct ‘shocks the conscience’ or is ‘outrageous’ or there is a willful and  

‘wanton disregard’ for safety requirements.  Normally, there must be a direct  

connection between the wrongdoer’s conduct and the victim’s injury.   

Need for legislation

19. Need for a comprehensive legislation dealing with tortious liability of  

State,  its  instrumentalities  has  been  highlighted  by  this  Court  and  the  

academic world on various occasions and it is high time that we develop a  

sophisticated jurisprudence of Public Law Liability.  

20. Due to lack of legislation, the Courts dealing with the cases of tortious  

claims against  State and his officials are not following a uniform pattern  

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while  deciding  those  claims  and  this  at  times  leads  to  undesirable  

consequences and arbitrary fixation of compensation amount.

21. Government  of  India  on  the  recommendations  of  the  first  Law  

Commission introduced two bills on the Government liability in torts in the  

years 1965-67 in the Lok Sabha but those bills lapsed.  In Kasturi Lal’s case  

(supra), this Court has highlighted the need for a comprehensive legislation  

which was reiterated by this Court in various subsequent decisions as well.  

22. Public Authorities are now made liable in damages in U.K. under the  

Human Rights Act, 1998.  Section 6 of the Human Rights Act, 1998 makes a  

Public Authority liable for damages if it is found to have committed breach  

of  human  rights.    The  Court  of  Appeal  in  England  in  Anufijeva Vs.  

London  Borough  Southwork  2004  (2)  WLR 603,  attempted  to  answer  

certain important questions as to how the damages should be awarded for  

breach of human rights and how should damages be assessed.  Further, such  

claims are also dealt by Ombudsmen created by various Statutes, they are  

independent  and  impartial  officials,  who  investigate  complaints  of  the  

citizens in cases mal-administration.   The experience shows that majority of  

the Ombudsman’s recommendations are complied in practice, though they  

are not enforceable in Courts.  

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23. The  European  Court  of  Justice  has  developed  a  sophisticated  

jurisprudence concerning liability in damages regarding liability of public  

bodies for the loss caused by administrative Acts. We have highlighted all  

these facts only to indicate that rapid changes are taking place all over the  

world to uphold the rights of the citizens against the wrong committed by  

Statutory Authorities and local bodies.   

24. Despite  the concern shown by this  Court,  it  is  unfortunate  that  no  

legislation has been enacted to deal with such situations.  We hope and trust  

that  utmost  attention  would  be  given  by  the  legislature  for  bringing  in  

appropriate legislation to deal with claims in Public Law for violation of  

fundamental rights, guaranteed to the citizens at the hands of the State and  

its officials.    

……………………………J [R. V. Raveendran]

……………………………J [K. S. Radhakrishnan]

New Delhi; October 13, 2011.  

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