Understanding Ex Gratia Payments and State Liability
The term ‘ex gratia’ is derived from Latin, meaning ‘by grace’. It signifies a payment made voluntarily, without legal obligation or admission of fault. This term is frequently employed by the Indian State following disasters, alongside the formation of Special Investigation Teams (SITs) and suspension of officials. The concept is straightforward: a grace payment is not owed, and thus, does not implicate the giver in liability. This mechanism was recently observed in two tragic incidents.
Recent Tragedies and State Response
Within a span of 48 hours, a catastrophic ammonia leak in a seafood processing facility in Tiruvallur, Tamil Nadu, claimed the lives of seven female migrant workers from Assam, Odisha, and Jharkhand. Following this, a devastating fire at an animation coaching center in Lucknow’s Aliganj neighborhood resulted in the deaths of 15 students. In response, the Prime Minister announced an ex gratia payment of ₹2 lakh for each victim in Lucknow. While investigations are underway in both states, there is no public acknowledgment from the government of its regulatory failures in preventing these incidents.
The Legal Framework for State Accountability
The Supreme Court of India has developed a robust framework over four decades to hold the State accountable for preventable deaths. This is encapsulated in three landmark cases. First, in Rudul Sah v. State of Bihar (1983), Chief Justice YV Chandrachud recognized monetary compensation as an enforceable constitutional remedy under Article 32 for violations of fundamental rights. This established that courts could provide substantive relief beyond declarations and writs.
Second, in Nilabati Behera v. State of Orissa (1993), Justice Verma dismantled sovereign immunity, declaring that the State cannot escape liability through this defense. The ruling affirmed that public law compensation under Articles 32 and 226 operates independently of private lawsuits.
Lastly, MC Mehta v. Union of India (1987) established absolute liability for hazardous enterprises. Justice Bhagwati’s decision departed from the traditional strict liability doctrine, emphasizing that exceptions like ‘act of God’ do not apply to modern industrial activities. Compensation must match the enterprise’s scale and financial capacity.
Analyzing the Tiruvallur and Lucknow Incidents
Legally, the Tiruvallur and Lucknow tragedies are distinct. For the Tiruvallur incident, involving hazardous ammonia refrigeration, any operational failures would fall under the MC Mehta framework, necessitating compensation commensurate with the enterprise’s financial capability.
The Lucknow fire presents a more complex legal scenario. The building in question, initially approved for residential use, had a demolition order issued and then revoked by the Lucknow Development Authority (LDA) in 2016. The subsequent commercial use without enforcement of the order implicates the LDA in constitutional tort liability under Nilabati Behera, as the revocation was not a ‘sovereign function’ immune from scrutiny.
Ex Gratia Payments vs. Legal Compensation
The 1997 Uphaar Cinema fire serves as a precedent, where the Delhi High Court awarded significant compensation, deducting previously paid ex gratia amounts from the total. This underscores the distinction between voluntary ex gratia payments and legally obligated compensation, which the State often overlooks.
By offering ex gratia payments promptly, the State manages to mitigate potential litigation by providing immediate, yet insufficient, relief to grieving families. This strategic approach delays or deflects the pursuit of rightful legal claims.
Conclusion: The Need for Accountability
The current system adeptly avoids legal accountability through administrative actions like ex gratia payments, SIT formations, and temporary suspensions, creating an illusion of responsibility. However, genuine accountability requires enforceable findings of negligence and causation. The legal groundwork for such accountability exists, as demonstrated in past rulings, but a shift in willingness and policy is imperative to bridge the gap between administrative actions and legal obligations.
Paras Sharma is a practicing advocate at the Punjab and Haryana High Court, Chandigarh. Views are personal.
