To put it another way, absolute responsibility is strict liability without exclusions.
In the case of M.C. Mehta v. Union of India, the rule of absolute liability was developed, which went one step further than strict liability by stating that an enterprise engaged in a hazardous or inherently dangerous activity is absolutely liable for any harm resulting from the operation of such activity and must compensate all those who are harmed by the accident.
Facts: On the 4th and 6th of December, 1985, in Delhi, a serious oleum gas leak occurred at one of the Shriram Foods and Fertilizers Industries plants, which belonged to the Delhi Cloth Mills Ltd. An advocate practicing at the Tis Hazari Court died as a result of this, and many others were impacted. The court was served with a writ petition in the form of a public interest lawsuit (PIL).
It was argued that if all tragedies resulting from the actions of huge manufacturers follow the strict responsibility rule, they would fall within the exceptions and be exempt from accountability for the harm they have inflicted in the course of their business.
The Court noted that this was the second large-scale leaking of dangerous gas in India within a year, since more than 3000 people had died a year earlier as a result of the leakage of gas from the Union Carbide facility in Bhopal, and lakhs of others had been exposed to severe ailments. If the strict liability rule established in Rylands v. Fletcher were applied to such scenarios, people who had created "hazardous and intrinsically dangerous" enterprises in and near densely inhabited regions may avoid culpability by alleging some exemption.
As a result, the Supreme Court developed a new rule, dubbed "Absolute Liability" by then-Chairman of the Supreme Court of India, PN Bhagwati.
It stated explicitly that the new rule would not be susceptible to any of the exclusions found in Rylands v. Fletcher. The regulation was justified by the Court for two reasons:
The business that engages in such hazardous and intrinsically risky activity for private profit has a social duty to compensate people who are harmed, and it should absorb such losses as overhead; and the business alone has the resources to uncover and defend against such risks and dangers.
"If the enterprise is permitted to carry on any hazardous or inherently dangerous activity for profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising from such hazardous or inherently dangerous activity as an appropriate item of its overheads," the Court stated. This notion is also tenable since the company has the resources to detect and defend against risks or dangers, as well as to issue warnings in the event of a possible hazard."
The Court further said that the amount of compensation payable should be proportional to the enterprise's capabilities, in order to have a deterrence effect, with bigger and more profitable businesses contributing more recompense for the harm they have caused.