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Saturday, October 22, 2011

LEGAL ISSUES Victims of Uphaar Tragedy = apex court felt that there is no appropriate laws for dealing with this type of cases=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 =(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


                                                                                 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



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


                                               3



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


                                               4



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


                                               5



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


                                            6



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


                                                 7



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


                                         8



(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.


                                      9



(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.


                                                     10



              (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.


                                                11



      (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


                                               12



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


                                               13



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


                                                  14



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


                                                 15



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.


                                          16



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


                                              17



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    


                                               18



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


                                                 19



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


                                                20



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


                                                  21



(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


                                                 22



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


                                                23



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:


                                             24



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.


                                              25



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.


                                               26



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,


                                                     27



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


                                              28



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


                                                 29



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


                                               30



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


                                                  31



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


                                                32



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


                                               33



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


                                               34



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


                                             35



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


                                             36



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


                                                37



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


                                                    38



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


                                                     39



       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


                                                40



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:


                                                   41




      "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


                                                     42



       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


                                                43



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


                                                 44



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.


                                               45



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


                                             46



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


                                                47



       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


                                                       48



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


                                                    49



        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


                                           50



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.


                                                  51



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


                                                52



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,


                                                  53



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


                                               54



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.


                                                      55



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


                                                     56



       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


                                               57



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


                                                 58



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


                                                     59



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


                                            60



         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.


                                          61



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 :


                                          62



(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


                                         63



       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.


                                               64



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.


                                                65



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-


                                                     66



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."


                                                 67



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


                                               68



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.  


                                                  69



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


                                              70



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


                                               71



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.


                                                    72



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."


                                                73



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


                                                 74



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


                                              75



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


                                             76



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


                                                   77



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.


                                               78



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


                                             79



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


                                               80



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


                                          81



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   compliance   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.


       


                                              82



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.