Charan
Lal Sahu Vs. Union of India & Ors [1989] INSC 395
(22 December 1989)
Mukharji,
Sabyasachi (Cj) Mukharji, Sabyasachi (Cj) Singh, K.N. (J) Rangnathan, S.
Ahmadi, A.M. (J) Saikia, K.N. (J)
CITATION:
1990 AIR 1480 1989 SCR Supl. (2) 597 1990 SCC (1) 613 JT 1989 (4) 582
CITATOR
INFO : E 1991 SC 101 (30,278) E 1992 SC 248 (31,33,35,36,44,70,71,79,80,81
ACT:
Constitution
of India, 1950: Articles 14, 19 and 21--Bhopal Gas Leak Disaster (Processing of
claims) Act, 1985--Whether constitutionally valid.
Preamble
and Articles 38, 39 and 39A--Doctrine of 'parens patriae'--Applicability of
Exercise of sovereign power--Limitations. Articles 21, 48A and 51(g)--Human
rights--State's obligation to protect--Need for enacting law protecting the
constitutional rights of citizens--Evolving standards highlighted by clauses 9
and 13 of U.N. Code of Conduct on transnational corporations.
Bhopal
Gas Leak Disaster (Processing of claims) Act, 1985: Sections 3, 4, 5, 9 and
11--Constitutional validity of. Central Govt. representing victims in suit
against multinational company--Govt. holding share in company--Govt.
alleged
to be joint tort feasor--Whether competent to represent victims--Whether
principles of natural justice violated.
Settlement
of claims before court--Pre-decisional and post decisional notice--Need
for----Effect of non-issue of notice.
Power
conferred on Central Govt. to represent victims in suit-Divesting individual
rights to legal remedy--Procedure followed-Whether consistent with the Code of
Civil Procedure 1908.
Interim
Compensation--Payment of. Precautionary measures-Need for--Guidelines for the
future--Immediate relief to victims-Setting up of a Tribunal--Creation of
Industrial Disaster Fund-Mooted.
Code
of Civil Procedure, 1908: Order I Rule 8 and Order 23 Rule 3B--Procedure
followed under the Bhopal Gas Leak Disaster (Processing of claims) Act,
1985--Central Govt. representing victims in suit-Divesting individual rights to
legal remedy--Whether procedure 598 standard and fair--Whether violative of principles
of natural justice.
Administrative
Law--Principles of Natural Justice.' Act of Parliament within legislative
competence--applicability of the principles.
Pre-decisional
notice not given--Effect of. Central Government representing victims in a suit
against a multinational company--Govt. having shares in company--Alleged
tort-feasor--Whether competent to represent victims--Doctrine that no man shall
be judge of his own cause--Doctrine of necessity----Doctrine of 'defacto
validity'--Doctrine of bona fide representation--Applicability of.
Statutory
construction: Constructive intuition approach--statute to be read purposefully
and meaningfully--Regard to be had to the spirit of the statute and the
mischief intended to be cured by it.
Law of
Torts: Bhopal Gas Leak Disaster (Processing of claims) Act, 1985--Grant of
interim relief to the victims--Whether inherent in the Act and the Scheme
framed there under--Liability of tort-feasor-Whether limited to civil liability
to compensation-whether includes criminal liability to punitive damages also.
HEAD NOTE:
Union
Carbide (India) Ltd. (UCIL) is a subsidiary of
Union Carbide Corporation (UCC), a New York Corporation.
UCIL
was incorporated in India in 1954. 50.99% of its share
holding was with UCC and 22% of the shares were held by Life Insurance
Corporation of India and Unit Trust of India. UCIL owned
a chemical plant in Bhopal for the manufacture of pesticides
using Methyl Isocyanate (MIC) a highly toxic gas.
On the
night between 2nd and 3rd
December, 1984, there
was a massive escape of lethal gas from the MIC Storage tank at the Bhopal plant resulting in the tragic death
of about 3,000 people. Thousands of people suffered injuries. The environment
also got polluted, badly affecting the flora and the fauna.
On
behalf of the victims, many suits were filed in various District Courts in the United States of America. All such suits were consolidated
by the Judicial Panel on Multi-District Litigation and were assigned to the U.S.
District
Court, Southern District of New York and Judge Keenan was the Presiding Judge
throughout. Later, the legal battle shifted to Indian Courts, as it could not
proceed in the U.S. Courts, on the ground of forum non conveniens.
599
Meanwhile, the Bhopal Gas Leak Disaster (Processing of claims) 1985 was passed
by the Government of India with a view to secure that the claims arising out of
or connected with the Bhopal gas leak disaster were dealt with speedily,
effectively and equitably.
Union
of India filed a suit for damages in the District Court of Bhopal on 5.9.86.
However, there were negotiations for a settlement; hut ultimately the
settlement talks had failed.
On
17.12.1987, the District Judge ordered interim relief of Rs.350 crores. On
appeal, the High Court, on 4.4.88 modified the order of the District Judge and
ordered an interim relief of Rs.250 crores.
Aggrieved,
the UCC as also the Union of India filed petitions for special leave before
this Court. Leave was granted. By its orders dated 14.2.89 and 15.2.89, this
Court, on the basis of a settlement arrived at between the parties, directed
UCC to pay a sum of 470 million U.S.
Dollars
to the Union of India in full settlement of all claims, rights and liabilities
related to and arising out of the Bhopal gas disaster.
The said
orders were passed keeping in view the Bhopal Gas Disaster (Processing of
claims) Act, 1985.
The
present Writ Petitions challenge the constitutional validity of the said Act
inter alia on the grounds that the Act is violative of the fundamental rights
guaranteed under Articles 14, 19 and 21 of the Constitution: that the Act is
violative of the Principles of Natural Justice mainly on the ground that Union
of India, being a joint tort-feasor, in that it has permitted establishment of
such factories without necessary safeguards, has no locus standi to compromise
on behalf of the victims; that the victims and their legal heirs were not given
the opportunity of being heard, before the Act was passed; that in the guise of
giving aid, the State could not destroy the rights inherent in its citizens;
nor
could it demand the citizens to surrender their rights to the State; that
vesting of the rights in Central Government was bad and unreasonable because
there was conflict of interest between the Central Government and the victims.
since
the Central Government owned 22% share in UCIL, and that would make the Central
Government a Judge in its own cause.
Disposing
of the Writ Petitions, this Court, 600 HELD: Sabyasachi Mukharji, CJ and K.N.
Saikia, J.--Per C J:
1.1
The Act is constitutionally valid. It proceeds on the hypothesis that until the
claims of the victims are realised or obtained from the delinquents, namely,
UCC and UCIL by settlement or by adjudication and until the proceedings in
respect thereof continue, the Central Government must pay interim compensation
or maintenance for the victims. In entering upon the settlement in view of s. 4
of the Act, regard must be had to the views of the victims and for the purpose
of giving regard to these, appropriate notices before arriving at any
settlement, was necessary. In some cases, however, post-decisional notice might
be sufficient but in the facts and the circumstances of the present case, no
useful purpose would be served by giving a post-decisional hearing having
regard to the circumstances mentioned in the order of this Court dated 4th May,
1989 and having regard to the fact that there are no further additional data
and facts available with the victims which can be profitably and meaningfully
presented to controvert the basis of the settlement and further having regard
to the fact that the victims had their say, or on their behalf their views had
been agitated in these proceedings, and will have further opportunity in the
pending review proceedings. [703E-H; 704A]
1.2
Though settlement without notice is not quite proper, on the materials so far
available, it is seen that Justice has been done to the victims but justice has
not appeared to have been done. In view of the magnitude of the misery involved
and the problems in this case, the setting aside of the settlement on this
ground in view of the facts and the circumstances of this case keeping the
settlement in abeyance and giving notice to the victims for a post-decisional
hearing would not be in the ultimate interest of justice. It is true that not
giving notice was not proper because principles of natural justice are
fundamental in the constitutional set up of this country. No man or no man's
right should be affected without an opportunity to ventilate his views. Justice
is a psychological yearning, in which men seek acceptance of their view point
by having an opportunity of vindication before the forum or the authority
enjoined or obliged to take a decision affecting their right. Yet in the
particular situations, one has to bear in mind how an infraction of that should
be sought to be removed in accordance with justice. "To do a great
right" after all. it is permissible sometimes "to do a little
wrong". In the facts and circumstances of the case, this is one of those
rare occasions. [701G-H; 702A-C]
2.1
The constitutional validity of the statute would have to be determined on the
basis of its provisions and on the ambit of its operation as reasonably
construed. It has to be borne in mind that if so 601 judged it passed the test
of reasonableness, then the possibility of the power conferred being improperly
used is no ground for pronouncing the law itself invalid. [659E-G]
2.2
Conceptually and from the jurisprudential point of view, especially in the
background of the Preamble to the Constitution of India and the mandate of the
Directive Principles, it was possible to authorise the Central Government to
take over the claims of the Victims to fight against the multinational
corporation in respect of the claims.
Because
of the situation the victims were under disability in pursuing their claims in
the circumstances of the situation fully and properly. But there is no
prohibition or inhibition, for Indian State taking over the claims of the
victims or for the State acting for the victims as the Act has sought to
provide. [640E-H]
2.3
The Act does provide a special procedure in respect of rights of the victims
and to that extent the Central Govt. takes upon itself the rights of the
victims. It is a special Act providing a special procedure for a kind of
special class of victims. In view of the enormity of the disaster the victims
of the Bhopal gas leak disaster, as they were placed against the multi-national
and a big Indian Corporation and in view of the presence of foreign contingency
lawyers to whom the victims were exposed, the claimants and victims can
legitimately be described as a class by themselves different and distinct,
sufficiently separate and identifiable to be entitled to special treatment for
effective, speedy, equitable and best advantageous settlement of their claims.
There indubitably is differentiation. But this differentiation is based on a
principle which has rational nexus with the aim intended to be achieved by this
differentiation. The disaster being unique in its character and in the recorded
history of industrial disaster, situated as the victims were against a mighty
multinational with the presence of foreign contingency lawyers looming on the
scene, there were sufficient grounds for such differentiation and different
treatment. In treating the victims of the gas leak disaster differently and
providing them a procedure, which was just, fair, reasonable and which was not
unwarranted or unauthorised by the Constitution, Article 14 is not breached.
[683E-H; 684A-B] Collector of Customs, Madras v. Nathella Sampathu Chetty, [1962] 3 SCR 786; P.J. Irani v. State of Madras, [1962] 1 SCR 169; D.K. Trivedi v.
State of Gujarat, [1986] Suppl.
SCC 20,
relied on.
Ballast
Corporation v. O.D. Commission, [1960] AC 490, referred to602
3.1
The present case is one where the Govt. of India only represented the victims
as a party' and did not adjudicate between the victims and the UCC. It is the
court which would adjudicate the rights of the victims. The representation of
the victims by the Government of India cannot be held to be bad, and there is
and there was no scope of violation of any principle of natural justice. [670B]
3.2
The connotation of the term "parens patria" differs from country to
country, for instance, in England it is
the King, in America it is the people, etc. According to
Indian concept parens patria doctrine recognised King as the protector of all
citizens as parent. The Government is within its duty to protect and to control
persons under disability.
Conceptually,
the parens patriae theory is the obligation of the State to protect and take
into custody the rights and privileges of its citizens for discharging its
obligations.
Our
Constitution makes it imperative for the State to secure to all its citizens
the rights guaranteed by the Constitution and where the citizens are not in a
position to assert and secure their rights, the State must come into picture
and protect and fight for the right of the citizens. The Preamble to the
Constitution, read with the Directive Principles contained in Articles 38, 39
and 39A enjoins the State to take up these responsibilities. It is the
protective measure to which the social welfare state is committed.
It is
necessary for the State to ensure the fundamental rights in conjunction with
the Directive Principles of State Policy to effectively discharge its
obligation and for this purpose, if necessary, to deprive some rights and
privileges of the individual victims or their heirs to protect their rights better
and secure these further. [638E-H; 639A] 3.3 The UCC had to be sued before the
American courts.
The
tragedy was treated as a national calamity and the Govt. of India had the right, and indeed the duty,
to take care of its citizens, in the exercise of its parens patriae
jurisdiction or on principles analogous thereto. After having statutorily armed
itself in recognition of such parens patriae right or on principles analogous
thereto, it went to the American Courts. No other person was properly designed
for representing the victims, as a foreign court had to recognise a right of
representation. The Govt. of India was permitted to represent was permitted to
represent the victims before the American courts. Private plaintiffs were also
represented by their attorneys. The order of Judge Keenan permitted the Govt.
of India to represent the victims. If there was any remote conflict of
interests between the Union of India and the victims from the theoretical point
of view the doctrine of necessity would override the possible violation of the
principles of natural justice--that no man should be Judge in his own case.
[669C-F] 603
3.4
The Act in question has been passed in recognition of the right of the
sovereign to act as parens patriae. The Government of India in order to
effectively safeguard the rights of the victims in the matter of the conduct of
the case was entitled to act as parens patriae, which position was reinforced
by the statutory provisions, namely the Act.
It has
to be borne in mind that conceptually and jurisprudentially, the doctrine of
parens patriae is not limited to representation of some of the victims outside
the territories of the country. It is true that the doctrine has been so
utilised in America so far. Where citizens of a country
are victims of a tragedy because of the negligence of any multinational in
peculiar situation arises which calls for suitable effective machinery to
articulate and effectuate the grievance and demands of the victims, for which
the conventional adversary system would be totally inadequate.
The
State in discharge of its sovereign obligation must come forward. The Indian State because of its constitutional commitment is obliged to take
upon itself the claim of the victims and to protect them in their hour of need.
[658B-F]
3.5
There is no bar on the State to assume responsibilities analogous to parens
patriae to discharge the State's obligations under the Constitution. What the
Central Government has done in the instant case seems to be an expression of
its sovereign power. This power is plenary and inherent in every sovereign
state to do all things which promote the health, peace, moral, education and
good order of the people and tend to increase the wealth and prosperity of the
State.
Sovereignty
is difficult to define. By the nature of things, the State Sovereignty in these
matters cannot be limited. It has to be adjusted to the conditions touching the
common welfare when covered by legislative enactments. This power is to the
public what the law of necessity is to the individual. It is comprehended in
the maxim salus populi suprema lex--regard for public welfare is the highest
law. It is not a rule, it is an evolution. This power has always been as broad
as public welfare and as strong as the arm of the state, this can only be
measured by the legislative will of the people, subject to the fundamental
rights and constitutional limitations. This is an emanation of sovereignty and
it is the obligation of the State to assume such responsibilities and protect
its citizens. [658G-H; 659A-C]
3.6 In
the instant case, the victims cannot be considered to be any match to the
multinational companies or the Government with whom in the conditions that the
victims or their representatives were after the disaster physically, mentally,
financially, economically and also because of the position of litigation would
have to contend. In such a situation of 604 predicament the victims can
legitimately be considered to be disabled. They were in no position by
themselves to look after their own interest effectively or purposefully. In
that background, they are people who needed the State's protection and should
come within the umbrella of State's sovereignty to assert, establish and
maintain their rights against the wrong doers in this mass disaster. In that
perspective, it is jurisprudentially possible to apply the principle of parens
patriae doctrine to the victims. But quite apart from that, it has to be borne
in mind that in this case the State is acting on the basis of the Statute itself.
For the authority of the Central Government to sue for and on behalf of or
instead in place of the victims, no other theory, concept, or any
jurisprudential principle is required than the Act itself. The Act empowers and
substitutes the Central Government. The victims have been divested of their
rights to sue and such claims and such rights have been vested in the Central
Government. The victims have been divested because the victims were disabled.
The disablement of the victims vis-a-vis their adversaries in this matter is a
self evident factor. Even if the strict application of the 'parens patriae'
doctrine is not in order, as a concept it is a guide. The jurisdiction of the
State's power cannot be circumscribed by the limitations of the traditional
concept of parens patriae. Jurisprudentially it could be utilised to suit or
alter or adapt itself to the changed circumstances.
In the
situation in which the victims were, the State had to assume the role of a
parent protecting the rights of the victims who must come within the protective
umbrella of the State and the common sovereignty of the Indian people. The act
is an exercise of the sovereign power of the State. It is an appropriate
evolution of the expression of sovereignty in the situation that had arisen. It
has to be accepted as such. [685C-H]
3.7
The concept of parens patriae can be varied to enable the Government to
represent the victims effectively in domestic forum if the situation so
warrants. There is no reason to confine the 'parens patriae' doctrine to only
quasi-sovereign right of the State independent of and behind the title of the
citizen. [692B-C]
3.8
The power to compromise and to conduct the proceedings are not uncanalised or
arbitrary. These were clearly exercisable only in the ultimate interests of the
victims.
The
possibility of abuse of a statute does not impart to it any element of
invalidity. [659C-D] E.P. Royappa v. State of Tamil Nadu, [1974] 2 SCR 348;
Menaka
Gandhi v. Union of India, [1978] 2 SCR 621; R.D. Shetty v. International
Airport Authority of India, [1979] 3 SCR 1014 followed.
605
Ram Saroop v. S.P. Sahi, [1969] 2 Suppl. SCR 583 relied on.
Budhkaran
Chankhani v. Thakur Prasad Shah, AIR 1942 Col 311; Banku Behari Mondal v. Banku
Behari Hazra, AIR 1943 Cal 203; Medai Dalavoi T. Kumaraswamy Mudaliar v. Medai
Dalavoi Rajammal, AIR 1957 Mad. 563 approved.
State
of U.P. v. Poosu, [1978] 3 SCR 1005; K.M.
Nanavati v. State of Bombay, [1961] 1 SCR 497; Ram Gopal
Sarubai v. Smt. Sarubhai & Ors., [1981] 4 SCC 505; India Mica &
Micanite Industries Ltd. v. State of Bihar & Ors. [1982] 3 SCC 182; Alfred
L Snapp & SonInc. v. Puerto
Rico, 458 US 592 73, Ed. 2d 995, 102 s. ct. 3260; State of Georgia v. Tennessee Copper Co., 206 US 230, 51 L.Ed. 1038 27 s. et. 618, referred to.
B.K.
Mukherjea on Hindu Religious and Charitable Trusts, Tagore Law Lectures, 5th
Edn. p. 404; Words & Phrases, permanent Edn. vol. 33 p. 99; Black's Law
Dictionary, 5th Edn. 1979, p. 1003; Weaver's Constitutional Law, p. 490;
American Constitutional Law by Lawrence H.
Tribe 1978 Edn. para 3.24, referred to.
4.1
Section 3 provides for the substitution of the Central Government with the
right to represent and act in place of (whether within or outside India) every person who has made or is
entitled to make, a claim in respect of the disaster. The State has taken over
the rights and claims of the victims in the exercise of sovereignty in order to
discharge the constitutional obligations as the parent and guardian of the
victims who in the situation as placed needed the umbrella of protection. Thus,
the State has the power and jurisdiction and for this purpose unless the Act is
otherwise unreasonable or violative of the constitutional provisions no
question of giving a hearing to the parties for taking over these rights by the
State arises. For legislation by the Parliament, no principle of natural
justice is attracted provided such legislation is within the competence of the
legislature. Indeed the present Act is within the competence of the Parliament.
Section 3 makes the Central Government the dominoes litis and it has the
carriage of the proceedings, but that does not solve the problem of by what
procedure the proceedings should be carried. [692A-D]
4.2
Section 4 means and entails that before entering into any settlement affecting
the rights and claims of the victims some kind of notice or information should
be given to the victims. [699D] 606
4.3
Sections 3 and 4 are categorical and clear. When the expression is explicit,
the expression is conclusive, alike in what it says and in what it does not
say. These give the Central Government an exclusive right to act in place of
the persons who are entitled to make claim or have already made claim. The
expression 'exclusive' is explicit and significant. The exclusively cannot be
wittled down or watered down. The said expression must be given its full
meaning and extent. This is corroborated by the use of the expression 'claim'
for all purposes. If such duality of rights are given to. the Central
Government alongwith the victims in instituting or proceeding for the
realisation or the enforcement of the claims arising out of Bhopal gas leak
disaster, then that would be so cumbersome that it would not be speedy,
effective or equitable and would not be the best or more advantageous procedure
for securing the claims arising out of the leakage. [683A-C]
4.4
Sections 3 and 4 of the Act should be read together along with other provisions
of the Act and in particular sections 9 and 11 of the Act. These should be
appreciated in the context of the object sought to be achieved by the Act as
indicated in the Statement of objects and Reasons and the Preamble to the act.
The Act was so designed that the victims of the disaster are fully protected
and the claims of compensation or damages for loss of life or personal injuries
or in respect of other matters arising out of or connected with the disaster
are processed speedily, effectively, equitably and to the best advantage of the
claimants. Section 3 of the Act is subject to other provisions of the Act which
includes Sections 4 and 11. Section 4 of the Act opens with non-obstante
clause, vis-a-vis, section 3 and, therefore overrides section 3. [659G-H;
660A-B]
4.5 In
the instant case, the Government of India is only capable to represent the
victims as a party. The adjudication of the claims would be done by the Court.
The doctrine of 'Bona fide Representation' as also 'defacto validity' are not
applicable to the present case. [690F] Basheshar v. Income Tax Commissioner,
AIR 1959 SC 149; In re Special Courts Bill, [1979] 2 SCR 476; A.R. Antulay v.
R.S. Nayak & Anr., [1988] 2 SCC 602; Ram Krishna Dalmia v. Tendulkar, [1955] SCR 279; Ambika Prasad Mishra
v. State of U.P. & Ors. etc. [1980] 3 SCR 1159; Bodhan Chowdhary v. State
of Bihar, [1955] 1 SCR 1045; Lakshmi Kant
Pandey v. Union of India, [1984] 2 SCR 795; M/s Mackinnon Mackenzie & Co.
Ltd. v. Audrey D' Costa and Anr., [1987] 2 SCC 469; Sheela Barse v. Secretary,
Children Aid Society & Ors., [1987] 1 SCR 870; Gokaraju Rangaraju v. State
of A.P., [1981] 3 SCR 474; Pushpadevi M.
Jatia v. M.L. Wadhwan. [1987] 3 SCC 367; 607 M/s Beopar Sahayak (P) Ltd. &
Ors. v. Vishwanath & Ors., [1987] 3 SCC 693; Dharampal Singh v. Director of
Small Industries Services & Ors., AIR 1980 SC 1888; N.K. Mohammed Sulaiman
v. N.C. Mohammed lsmail & Ors., [1966] 1 SCR 937;
Malkariun
Bin Shidrammappa Pasare v. Narhari Bin Shivappa & Anr., 271 A 216, referred
to.
Black's
Law Dictionary 5th Edn. p. 437, referred to.
5. The
restrictions or limitations on the substantive and procedural rights in the Act
will have to be judged from the point of view of the particular Statute in
question. No abstract rule or standard of reasonableness can be applied.
That
question has to be judged having regard to the nature of the rights alleged to
have been infringed in this case, the extent and urgency of the evil sought to
be remedied, disproportionate imposition, prevailing conditions at the time,
all these facts will have to be taken into consideration. Having considered the
background, the plight of the impoverished, the urgency of the victims' need,
the presence of the foreign contingency lawyers, the procedure of settlement in
USA in mass action, the strength of the foreign multinationals, the nature of
injuries and damages, and the limited but significant right of participation of
the victims as contemplated by s. 4 of the Act, the Act cannot be condemned as
unreasonable. [684C-E] State of Madras v. V.G. Row, [1952] SCR 597, referred
to.
6.1 In
view of the principles settled by this Court and accepted all over the world in
a case of this magnitude and nature, when the victims have been given some say
by Section 4 of the Act, in order to make that opportunity contemplated by
section 4 of the Act, meaningful and effective, it should be so read that the
victims have to be given an opportunity of making their representation before
the court comes to any conclusion in respect of any settlement. How that
opportunity should be given, would depend upon the particular situation. Fair procedure
should be followed in a representative mass tort action. [696E-F]
6.2
One assumption under which the Act is justified is that the victims were
disabled to defend themselves in an action of this type. If that is so, then
the Court cannot presume that the victims were a lot, capable and informed to
be able to have comprehended or contemplated the settlement.
In the
aforesaid view of the matter notice was necessary.
The
victims at large did not have the notice. The Central Government as the
representative of the victims must have the views of the victims and place such
view before the court in such manner it considers neces608 sary before a
settlement is entered into. If the victims want to advert to certain aspect of
the matter during the proceedings under the Act and settlement indeed is an
important stage in the proceedings, opportunities must be given to the victims.
Individual notices may not be necessary. The Court can, and should in such
situation formulate modalities of giving notice and public notice can also be
given inviting views of the victims by tile help of mass media. However, it is
not necessary that such views would require the consent of all the victims.
[698B-C; 698G-H; 699A]
6.3
One of the important requirements of justice is that people affected by an
action or inaction should have opportunity to have their say. That opportunity
the victims have got when these applications were heard and they were heard
after utmost publicity and they would have further opportunity when review application
against the settlement would be heard. 1700G-H; 701A]
7.1
The Act does not expressly exclude the application of the Code of Civil
Procedure. Section 11 of the Act provides the overriding effect indicating that
anything inconsistent with the provisions of the Act or in other laws including
the Civil Procedure Code should be ignored and the Act should prevail. Strictly
speaking, Order 1 Rule 8 will not apply to a suit or a proceeding under the
Act. It is not a case of one having common interest with others. Here the
plaintiff, the Central Government has replaced and divested the victims. 1696H;
697A-B]
7.2 In
the instant case, there is no question of abandonment as such of the suit or
part of the suit, the provisions of order XXIII Rule 1 would also not strictly
apply.
However,
Order XXIH Rule 3B of the Code is an important and significant pointer and the
principles behind the said provision would apply to this case. The said rule 3B
provides that no agreement of compromise in a representative suit shall be
entered into without the leave of the Court expressly recorded in the
proceedings; and sub-rule (2) of rule 3B enjoins that before granting such
leave the court shall give notice in such manner as it may think fit in a
representative action. Representative suit has been defined under Explanation
to the said rule vide clause (d) as any other suit in which the decree passed
may, by virtue of the provisions this Code or of any other law for the time
being in force, bind any person who is not named as party to the suit.
Indubitably the victims would be bound by the Settlement though not named in
the suit. 11his is a position conceded by all. If that is so, it would be a
representative suit in terms of and for the purpose of Rule 315 of Order XXIII
of the Code. If the principles of this rule are the principles of natural
justice then we are of the opinion that 609 the principles behind it would be
applicable; and also that section 4 of the Act should be so construed in spite
of the difficulties of the process of notice and other difficulties of making
"informed decision making process cumbersome". [697C-G]
7.3 In
as much as section 4 of the Act had given a qualified right of participation to
the victims, there cannot be any question of violation of the principles of
natural justice. The scope of the application of the principles of natural
justice cannot be judged by any strait jacket formula. [662G-H] R. Viswanathan
v. Rukn-ul-Mulk Syed Abdul Wajid, [1963] 3 SCR 22; M. Narayanan Nambiar v.
State of Kerala, [1963] Supp. (2) 724; Chintaharan
Ghose & Ors. v. Gujaraddi Sheik & Ors., AIR 1951 Cal. 456; Ram 'Sarup v. Nanak Ram, AIR 1952 All. 275;
referred to.
8. The
Act has to be understood that it is in respect of the person responsible, being
the person in-charge-of the UCIL and the parent company UCC. This
interpretation of the Act is further strengthened by the fact that a
'claimant" has been defined in clause (c) of Section 2 as a person who is
entitled to make a claim and the expression "person" in Section 2(e)
includes the Government. Therefore, the Act proceeded on the assumption that
the Government could be a claimant being a person as such. [690A-B]
9.1
The fact that the provisions of the principles of natural justice have to be
complied with, is undisputed.
This
is well-settled by the various decisions of the Court.
The
Indian Constitution mandates that clearly, otherwise the Act and the actions
would be violative of Article 14 of the Constitution and would also be
destructive of Article 19(1)(g) and negate Article 21 of the Constitution by
denying a procedure which is just, fair and reasonable. [693D-E] 9.2 Rules of
natural justice are not embodied rules.
Hence,
it was not possible to make an exhaustive catalogue of such rules. Audi alteram
partem is a highly effective rule devised by the Courts to ensure that a
statutory authority arrives at a just decision and it is calculated to act as a
healthy check on the abuse or misuse of power. The rules of natural justice can
operate only in areas not covered by any law validly made. The general
principle as distinguished from an absolute rule of uniform application is that
where a statute does not in terms exclude the rule of prior hearing but
contemplates a post-decisional hearing 610 amounting to a full review of the
original order on merits then such a statute would be construed as excluding
the audi alteram partem rule at the pre-decisional stage. If the statute
conferring the power is silent with regard to the giving of a pre-decisional
hearing to the person affected the administrative decision after
post-decisional hearing was good. [694A-D]
9.3 In
the instant case, no question of violation of the principle of natural justice
arises, and there is no scope for the application of the principle that no man
should be a Judge in his own cause. The Central Government was not judging any
claim, but was fighting and advancing the claims of the victims. The
adjudication would be done by the courts, and therefore, there is no scope of
the violation of any principle of natural justice. [688G-H; 689A-B] Menaka
Gandhi v. Union of India, [1978] 2 SCR 621; Olga Tellis v. Bombay Municipal
Corporation, [1985] Supp. 2 SCR 51; Union of India v. Tulsi Ram Patel, [1985]
Supp. 2 SCR 131; Swadeshi Cotton Mills v. Union of India, [1981] 2 SCR 533,
relied on.
Ganga
Bai v. Vijay Kumar, [1974] 3 SCR 882; S.L. Kapoor v. Jagmohan, [1981] 1 SCR
745; Sangram v. Election Commission, [1955] 2 SCR 1, referred to.
10.
Though not expressly stated, the Act proceeds on 'the major inarticulate
premise'. It is on this promise or premise that the State would be justified in
taking upon itself the right and obligation to proceed and prosecute the claim
and deny access to the courts of law to the victims on their own. If it is only
so read, it can only be held to be constitutionally valid. It has to be borne
in mind that the language of the Act does not militate against this
construction but on the Contrary. Sections 9, 10 and the scheme of the Act
suggest that the Act contains such an obligation. If it is so read, then only
meat can be put into the skeleton of the Act making it meaningful and
purposeful. The Act must, therefore, be so read. This approach to the
interpretation of the Act can legitimately be called the 'constructive
intuition' which is a permissible mode of viewing the Acts of Parliament. The
freedom to search for 'the spirit of the Act' or the quantity of the mischief
at which it is aimed (both synonymous for the intention of the parliament)
opens up the possibility of liberal interpretation "that delicate and
important branch of judicial power, the concession of which is dangerous, the
denial ruinous". Given this freedom it is a rare opportunity though never
to be misused and challenge for the Judges to adopt and give meaning to 611 the
act, articulate and inarticulate and thus translate the intention of the
Parliament and fulfil the object of the Act. After all, the Act was passed to
give relief to the victims, who, it was thought, were unable to establish their
own rights and fight for themselves. [687E-H; 688A]
11.1
The circumstances that financial institutions held shares in the UCIL would not
disqualify the Government of India from acting as parens patriae and in
discharging its statutory duties under the Act. The suit was filed only against
the UCC and not against UCIL. On the basis of the claim made by the Government
of India, UCIL was not a necessary party. It was suing only the multinational
based on several legal grounds of liability of the UCC, inter alia, on the
basis of enterprise liability. If the Government of India had instituted a suit
against UCIL to a certain extent it would have weakened its case against UCC in
view of the judgment of this Court in M.C. Mehta's case. [668H; 669A-B] M.C.
Mehta v. Union of India, [1987] 1 SCR 819, referred to.
11.2
Even if there was any remote conflict of interests between the Union of India
and the victims on account of the sharesholding, doctrine of necessity would
override the possible violation of the principles of natural justice.
[669F]
Kasturilal Ralia Ram Jain v. State of UP,
[1965] 1 SCR 375; State of Rajasthan v.
Vidyawati, [1962] 2 Supp. SCR 989; J. Mohapatra & Co. & Anr. v. State
of Orissa & Anr., [1984] 4 SCC 103,
referred to.
Halsbury's
Laws of England, Vol. 1, 4th Edn. para 73 Smith's
Judicial Review of Administrative Action, 4th Edn. pp. 276-277; Natural Justice
by G.A. Flick, [1979] Edn. pp. 138-141, referred to.
12.
The Act does not create new causes of action or create special courts. The
jurisdiction of the civil court to entertain suit would still arise out of
section 9 of the CPC and the substantive cause of action and the nature of the
reliefs available would also continue to remain unchanged. The only difference
produced by the provisions of the Act would be that instead of the suit being
filed by the victims themselves the suit would be filed by the Central
Government on their behalf. [655F]
13.
Normally, in measuring civil liability, the law has attached more importance to
the principle of compensation than that of punishment. Penal redress, however,
involves both compensation to the 612 person injured and punishment as
deterrence. The Act, as such does not abridge or curtail damage or liability
whatever that might be. So the challenge to the Act on the ground that there
has been curtailment or deprivation of the rights of the victims which is
unreasonable in the situation is unwarranted and cannot be sustained. [680G-H;
681A-F] Roshanlal Kuthiala & Ors. v. R.B. Mohan Singh, Oberoi (1975) 2 SCR
491; Nandram Heeralal v. Union of India & Anr., AIR 1978 M.P. 209; Ryland
v. Flatcher, (1868) Vol 3 LR E& I Appeal Cases 330; Rookes v. Barnard,
[1964] AC 1129, referred to.
Salmond's
Law of Torts, 15th Edn. p. 30, referred to.
14.
The Act in question does not purport to deal with the criminal liability, if
any, of the parties or persons concerned nor it deals with any of the
consequences flowing from those. This position is clear from the provisions and
the preamble to the Act. [636F]
15.
The major inarticulate premise apparent from the Act and the scheme and the
spirit of the Act is that so long as the rights of the victims are prosecuted
the state must protect the victims. Otherwise the object of the Act would be
defeated its purpose frustrated. Therefore, continuance of the payments of the
interim maintenance for the continued sustenance of the victims is an
obligation arising out of State's assumption of the power and temporary
deprivation of the rights of the victims and divestiture of the right of the
victims to fight for their own rights. This is the only reasonable
interpretation which is just, fair and proper. [686B-C]
16.
The promises made to the victims and hopes raised in their hearts and minds can
only be redeemed in some measure if attempts are made vigorously to distribute
the amount realised to the victims in accordance with the scheme. That would be
redemption to a certain extent. The law relating to damages and payment of
interim damages or compensation to the victims of this nature should be
seriously and scientifically examined by the appropriate agencies. [704F-H;
705A]
17.
The Bhopal Gas Leak disaster and its aftermath
emphasise the need for laying down certain norms and standards that the
Government may follow before granting permission or licences for the running of
industries dealing with materials which are of dangerous potentialities. The
Government, should, therefore, examine or have the problem examined by an
expert committee as to what should be the conditions on 613 which future
licences and/or permission for running industries on Indian soil would be
granted and for ensuring enforcement of those conditions, sufficient safety
measures should be formulated and scheme of enforcement indicated.
The
Government should insist as a condition precedent to the grant of such licences
or permission, creation of a fund in anticipation by the industries to be
available for payment of damages out of the said fund in case of leakages or
damages in case of accident or disaster flowing from negligent working of such
industrial operations or failure to ensure measures preventing such occurrence.
The Government should also ensure that the parties must agree to abide to pay
such damages out of the said Fund by procedure separately evolved for
computation and payment of damages without exposing the victims or sufferers of
the negligent act to the long and delayed procedure. Special procedure must be
provided for and the industries must agree as a condition for the grant of
licence to abide by such procedure or to abide by statutory arbitration. The
basis for damages in case of leakages and accident should also be statutorily
fixed taking into consideration the nature of damages inflicted, the
consequences thereof and the ability and capacity of the parties to pay. Such
should also provide for deterrant or punitive damages, the basis for which
should be formulated by a proper expert committee or by the Government. For
this purpose, the Government should have the matter examined by such body as it
considers necessary and proper like the Law Commission or other competent
bodies.
This
is vital for the future. [705B-F]
18.
That people are born free, the dignity of the persons must be recognised, and
competent tribunal is one of the surest methods of effective remedy. If, therefore,
as a result of this tragedy new consciousness and awareness on the part of the
people of this country to be more vigilant about measures and the necessity of
ensuring more strict vigilance for permitting the operations of such dangerous
and poisonous gases dawn, then perhaps the tragic experience of Bhopal would
not go in vain. [682D-E] Per Singh, J. (concurring):
1.1 In
India, the need for industrial
development has led to the establishment of a number of plants and factories by
the domestic companies and under-takings as well as by Transnational
Corporations. Many of these industries are engaged in hazardous or inherently
dangerous activities which pose potential threat to life, health and safety of
persons working in the factory, or residing in the surrounding areas. Though
working of such factories and plants is regulated by a 614 number of laws of
our country, there is no special legislation providing for compensation and
damages to outsiders who may suffer on account of any industrial accident. As
the law stands today, affected persons have to approach civil courts for
obtaining compensation and damages. In civil courts, the determination of
amount of compensation or damages as well the liability of the enterprise has
been bound by the shackles of conservative principles. [707D-G]
1.2
The principles laid down in Ryland v. Fletcher made it difficult to obtain
adequate damages from the enterprise and that too only after the negligence of
enterprise was proved. [707G-H]
1.3
The law laid down in Oleum Gas Leak case made a land-mark departure from the
conservative principles with regard to the liability of an enterprise carrying
on hazardous or inherently dangerous activities. [709C]
1.4 In
the instant case, there is no scope for any doubt regarding the liability of
the UCC for the damage caused to the human beings and nature in and around Bhopal. [709E] Ryland v. Fletcher, [1868]
LR 3 HL 330; M.C. Mehta v. Union of India, [1987] 1 SCR 819, referred to.
2. In
the context of our national dimensions of human rights, right to life, liberty,
pollution free air and water is guaranteed by the Constitution under Articles
21, 48A and 51(g), it is the duty of the State to take effective steps to
protect the constitutional rights guaranteed. These rights must be integrated
and illumined by evolving international dimensions and standards, having regard
to our sovereignty as highlighted by Clauses 9 and 13 of U.N. Code of Conduct
on Transnational Corporations. Such a law may provide for conditions for
granting licence to Transnational Corporations, prescribing norms and standards
for running industries on Indian soil ensuring the above said constitutional
rights of our people. A Transnational Corporation should be made liable and
subservient to laws of our country and the liability should not be restricted
to affiliate company only but the parent corporations should also be made
liable for any damage caused to the human beings or ecology.
The
law must require transnational Corporations to agree to pay such damages as may
be determined by the statutory agencies and forum constituted under it without
exposing the victims to long drawn litigation. In order to meet the situation,
to avoid delay and to ensure immediate relief to the victims, the law should
615 provide for constitution of tribunals regulated by special procedure for
determining compensation to victims of industrial disaster or accident, appeal
against which may lie to this Court on the limited ground of questions of law
only after depositing the amount determined by the Tribunal. The law should
also provide for interim relief to victims during the pendency of proceedings.
These steps would minimise the misery and agony of victims of hazardous
enterprises. [710H; 711A-F]
3.
Industrial development in our country and the hazards involved therein, pose a
mandatory need to constitute a statutory "Industrial Disaster Fund",
contributions to which may be made by the Government, the industries whether
they are transnational corporations or domestic undertakings, public or
private. The extent of contribution may be worked out having regard to the
extent of hazardous nature of the enterprise and other allied matters. The fund
should be permanent in nature. so that money is readily available for providing
immediate effective relief to the victims. [711 G -H; 712A] Ranganathan and
Ahmadi, J J----Per Ranganathan, J. (Concurring).'
1. The
provisions of the Act, read by themselves, guarantee a complete and full
protection to the rights of the claimants in every respect. Save only that they
cannot file a suit themselves, their right to acquire redress has not really
been abridged by the provisions of the Act. Sections 3 and 4 of the Act
completely vindicate the objects and reasons which compelled Parliament to
enact this piece of legislation. Far from abridging the rights of the claimants
in any manner, these provisions are so worded as to enable the Government to
prosecute the litigation with the maximum amount of resources, efficiency and
competence at its command. as well as with all the assistance and help that can
be extended to it by such of those litigants and claimants as are capable of
playing more than a mere passive role in the litigation. [720G-H; 721A-B]
2. Even
if the provisions of s. 3 had been scrupulously observed and the names of all
parties, other than the Central Government, had been got deleted from the array
of parties in the suits and proceedings pending in this country, the result
would not have been fatal to the interests of the litigants. On the contrary,
it enabled the litigants to obtain the benefit of all legal expertise at the
command of the Government of India in exercising their rights against the Union
Carbide Corporation. Such representation can well be justified by resort to a
principle analogous to, if not precisely the same, as that of, "parens 616
patriae". A victim of the tragedy is compelled to part with a valuable
right of his in order that it might be more efficiently and satisfactorily
exploited for his benefit than he himself is capable of. It is of course
possible that there may be an affluent claimant or lawyer engaged by him, who
may be capable of fighting the litigation better. It is possible that the
Government of India as a litigant may or may not be able to pursue the litigation
with as much determination or capability as such a litigant. But in a case of
the present type one should not be confounded by such a possibility. There are
more indigent litigants than affluent ones. There are more illiterates than
enlightened ones.
There
are very few of the claimants, capable of finding the financial wherewithal
required for fighting the litigation.
Very
few of them are capable or prosecuting such a litigation in this country not to
speak of the necessity to run to a foreign country. The financial position of
UCIL was negligible compared to the magnitude of the claim that could arise
and, though eventually the battle had to be pitched on our own soil, an initial
as well as final recourse to legal proceedings in the United States was very much on the cards, indeed
inevitable. In this situation, the legislature was perfectly justified in
coming to the aid of the victims with this piece of legislation and in asking
the Central Government to shoulder the responsibility by substituting itself in
place of the victims for all purposes connected with the claims. [716C-H; 717A]
3.
Section 4 adequately safeguards the interest of individual victims. It enables
each one of them to bring to the notice of the Union any special features or circumstances which he would like
to urge in respect of any matter and if any such features are brought to its
notice the Union is obliged to take it into account.
The individual claimants are also at liberty to engage their own counsel to
associate with the State counsel in conducting the proceedings. If the suits in
this case had proceeded, in the normal course, either to the stage of a decree
or even to one of settlement the claimants could have kept themselves abreast
of the developments and the statutory provisions would have been more than
adequate to ensure that the points of view of all the victims are presented to
the court. Even a settlement or compromise could not have been arrived at
without the court being apprised of the views of any of them who chose to do
so. The statute has provided that though the Union of India will be the dominus
litis in the suit, the interest of all the victims and their claims should be
safeguarded by giving them a voice in the proceedings to the extent indicated
above. This provision of the statute is an adaptation of the principle of Order
1 Rule 8 and of order XXIII Rule 38 of the Code of Civil Procedure in its
application to the suits governed by it and, though the extent of participation
allowed to 617 the victims is somewhat differently enunciated in the
legislation, substantially speaking, it does incorporate the principles of
natural justice to the extent possible in the circumstances. The statute
cannot, therefore, be faulted on the ground that it denies the victims an opportunity
to present their views or places them at any disadvantage in the matter of
having an effective voice in settling the suit by way of compromise. [724G-H;
725A-D]
4.
Sections 3 and 4 combine together the interest of the weak, illiterate,
helpless and poor victims as well as the interest of those who could have
managed for themselves, even without the help of this enactment. The
combination thus envisaged enables the Government to fight the battle with the
foreign adversary with the full aid and assistance of such of the victims or
their legal advisers as are in a position to offer any such assistance. Though
section 3 denies the climants the benefit of being eo nominee parties in such
suits or proceedings, section 4 preserves to them substantially all that they
can achieve by proceeding on their own. In other words, while seeming to
deprive the claimants of their right to take legal action on their own, it has
preserved those rights, to be exercised indirectly. A conjoint reading of
sections 3 and 4 would show that there has been no real total deprivation of
the right of the claimants to enforce their claim for damage in appropriate
proceedings before any appropriate forum. There is only a restriction of this
right which, in the circumstances, is totally reasonable and justified. [718D-G
]
5. It
is not possible to bring the suits brought under the Act within the categories
of representative action envisaged in the Code of Civil Procedure. The Act
deals with a class of action which is sui generis and for which a special
formula has been found and encapsuled in s. 4. The Act divests the individual
claimants of their right to sue and vests it in the Union. In relation to the suit in India, the Union is the sole Plaintiff. none of the others are envisaged as
plaintiffs or respondents. The victims of the tragedy were so numerous that
they were never defined at the stage of filing the plaint nor do they need to
be defined at the stage of settlement. The litigation is carried on by the
State in its capacity not exactly the same as, but somewhat analogous to that
of "parens patriae". In the case of a litigation by a Karta of a
Hindu undivided family or by a guardian on behalf of a ward, who is non-sui
juris, the junior members of the family or the wards, are not to be consulted
before entering into a settlement. In such cases, court acts as guardian of
such persons to scrutinise the settlement and satisfy itself that it is in the
best interest of all concerned. If it is later discovered that there has been
any fraud or collusion, it may be open to the junior members of the 618 family
or the wards to call the Karta or guardian to account but, barring such a
contingency, the settlement would be effective and binding. In the same way,
the Union as "parens patriae' would have been at liberty to enter into
such settlement as it considered best on its own and seek the Court's approval
therefore. [723G-H; 724A-D]
6. It
is common knowledge that any authority given to conduct a litigation cannot be
effective unless it is accompanied by an authority to withdraw or settle the
same if the circumstances call for it. The vagaries of a litigation of this
magnitude and intricacy could not be fully anticipated.
There
were possibilities that the litigation may have to be fought out to the bitter
finish. There were possibilities that the UCC might be willing to adequately
compensate the victims either on their own or at the insistence of the
Government concerned. There was also the possibility, which had already been in
evidence before Judge Keenan, that the proceedings might ultimately have to end
in negotiated settlement. In most of the mass disaster cases reported,
proceedings finally end in a compromise, if only to avoid an indefinite
prolongation of the agonies caused by such litigation. The legislation,
therefore, cannot be considered to be unreasonable merely because in addition
to the right to institute a suit or other proceedings it also empowers the
Government to withdraw the proceedings or enter into a compromise. [719B-E] M.C.
Mehta v. Union of India, [1987] 1 SCR 819, referred to.
7. The
Act has provided an adequate opportunity to the victims to speak out and if
they or the counsel engaged by some of them in the trial court had kept in
touch with the proceedings in this court, they could have most certainly made
themselves heard. If a feeling has gained ground that their voice has not been
fully heard, the fault was not with the statute but was rather due to the
development leading to the finalisation of the settlement when the appeal
against the interim order was being heard in this Court. [726B-D]
8. In
the field of torts, under the common law of England, no action could be laid by
the dependants or heirs of a person whose death was brought about by the
tortious act of another on the maxim actio personalis maritur cum persona
although a person injured by a similar act could claim damages for the wrong
done to him. In England this situation was remedied by the
passing of Fatal Accidents Act, 1846, popularly known as Lord Compbell's Act.
Thereafter the Indian Legislature enacted the Fatal Accidents Act, 1855.
This
Act is fashioned on the 619 lines of the English Act of 1840. Even though the
English Act has undergone a substantial change, our law has remained static and
seems a trifle archaic. The magnitude of the gas leak disaster in which
hundreds lost their lives and thousands were maimed, not to speak of the damage
to livestock, flora and fauna, business and property, is an eye opener.
The
nation must learn a lesson from this traumatic experience and evolve safeguards
atleast for the future. The time is ripe to take a fresh look at the outdated
century old legislation which is out of tune with modern concepts. [728F-H;
729A-B]
9. The
Central Government will be well advised to insist on certain safeguards before
permitting a transnational company to do business in the country. It is
necessary to insist on a right to be informed of the nature of the processes
involved so as to take prompt action in the event of an accident. The victims
in this case have been considerably handicapped on account of the fact that the
immediate tortfeasor was the subsidiary of a multi-national with its Indian
assets totally inadequate to satisfy the claims arising out of the disaster. It
is, therefore, necessary to evolve, either by international consensus or by
unilateral legislation, steps to overcome these handicaps and to ensure that
foreign corporations seeking to establish an industry here, agree to submit to
the jurisdiction of the Courts in India in respect of actions for tortious acts
in this country; that the liability of such a corporation is not limited to
such of its assets (or the assets of its affiliates) as may be found in this
country, but that the victims are able to reach out to the assets of such
concerns anywhere in the world; and that any decree obtained in Indian Courts
in compliance with due process of law is capable of being executed against the
foreign corporation, its affiliates and their assets without further procedural
hurdles. in those other countries. [729G-H; 730A-E]
10. It
is hoped that calamities like the one which this country has suffered will
serve as catalyst to expedite the acceptance of an international code on such
matters in the near future. [730F-G]
ORIGINAL
JURISDICTION: Writ Petition No. 268 of 1989 etc. etc.
(Under
Article 32 of the Constitution of India).
K.
Parasaran, Attorney General, R.K. Garg, Ms. Indira Jaising, L.N. Sinha, Dr. V.
Gauri Shankar, Vepa P. Sarathi, Shanti Bhushan, Rakesh Luthra, C.L. Sahu,
Indeevar Goodwill, N.S. Malik, N.S. Pundir, R.C, Kaushik, D.K. Garg, Rajeev
Dhawan, Miss Kamini 620 Jaiswal, Anip Sachthey, R.C. Pathak, H.D. Pathak,
Harish Uppal, S.K. Gambhir, Gopal Subramanium, D.S. Shastri, Arun Sharma, Miss
A. Subhashini, C.V.S. Rao, Satish K. Agnihotri, Ashok Kumar Singh, R.K. Jain,
Kailash Vasdev and Prashant Bhushan for the appearing parties.
The
Judgments of the Court were delivered by SABYASACHI MUKHARJI, CJ. 1. Is the
Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (hereinafter referred
to as 'the Act') is constitutionally valid? That is the question.
2. The
Act was passed as a sequel to a grim tragedy. On the night of 2nd December,
1984 occurred the most tragic industrial disaster in recorded human history in the
city of Bhopal in the State of Madhya Pradesh in India. On that night there was
massive escape of lethal gas from the MIC storage tank at Bhopal Plant of the
Union Carbide (I) Ltd.
(hereinafter
referred to as 'UCIL') resulting in large scale death and untold disaster. A
chemical plant owned and operated by UCIL was situated in the northern sector
of the city of Bhopal. There were numerous hutments
adjacent to it on its southern side, which were occupied by impoverished
squatters. UCIL manufactured the pesticides, Sevin and Tamik, at the Bhopal plant, at the request of, it is
stated by Judge John F. Keenan of the United States District Court in his
judgment, and indubitably with the approval of the Govt. of India. UCIL was
incorporated in 1984 under the appropriate Indian law: 50.99% of its
shareholdings were owned by the Union Carbide Corporation (UCC), a New York
Corporation, L.I.C. and the Unit Trust of India own 22% of the shares of
U.C.I.L., a subsidiary of U.C.C.
3.
Methyl Isocyanate (MIC), a highly toxic gas, is an ingredient in the production
of both Sevin and Temik. On the night of the tragedy MIC leaked from the plant
in substantial quantities. the exact reasons for and circumstances of such
leakage have not yet been ascertained or clearly established. The results of
the disaster were horrendous. Though no one is yet certain as to how many
actually died as the immediate and direct result of the leakage, estimates
attribute it to about 3,000. Some suffered injuries the effects of which are
described as Carcinogenic and ontogenic by Ms. Indira Jaisingh, learned
counsel; some suffered injuries serious and permanent and some mild and
temporary.
Livestock
was killed, damaged and infected. Businesses were interrupted. Environment was
polluted and the ecology affected, flora and fauna disturbed.
621
4. On 7th December, 1984, Chairman of UCC Mr. Warren
Anderson came to Bhopal and was arrested. He was later
released on bail. Between December 1984 and January 1985 suits were filed by
several American lawyers in the courts in America on behalf of several victims. It has been stated that within a week
after the disaster, many American lawyers, described by some as 'ambulance
chasers', whose fees were stated to be based on a percentage of the contingency
of obtaining damages or not, flew over to Bhopal and obtained Powers of
Attorney to bring actions against UCC and UCIL. Some suits were also filed
before the District Court of Bhopal by individual claimants against UCC (the
American Company) and the UCIL.
5. On
or about 6th February,
1985, all the suits in
various U.S. Distt. Courts were consolidated by the Judicial Panel on
Multi-District Litigation and assigned to U.S.
Distt.
Court, Southern Distt. of New York. Judge Keenan was at all material times the Presiding Judge
there.
6. On 29th March, 1985, the Act in question was passed.
The
Act was passed to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with
speedily, effectively and equitably. On 8th April, 1985 by virtue of the Act the Union of
India filed a complaint before the U.S. Distt. Court, Southern Distt. of New York.
On 16th April, 1985 at the first pre-trial conference
in the consolidated action transferred and assigned to the U.S. Distt. Court,
Southern Distt., New York, Judge Keenan gave the following directions:
(i) that
a three member Executive Committee be formed to frame and develop issues in the
case and prepare expeditiously for trial or settlement negotiations. The
Committee was to comprise of one lawyer selected by the firm retained by the
Union of India and two other lawyers chosen by lawyers retained by the
individual plaintiffs.
(ii) that
as a matter of fundamental human decency, temporary relief was necessary for
the-victims and should be furnished in a systematic and coordinated fashion
without unnecessary delay regardless of the posture of the litigation then
pending.
7. On 24th September, 1985 in exercise of powers conferred by
section 9 of the Act, the Govt. of India framed the Bhopal Gas Leak Disaster
(Registration and Processing of Claims) Scheme, 1985 (hereinafter called the
Scheme). 622
8. On 12th May, 1986 an order was passed by Judge Keenan
allowing the application of UCC on forum non convenience as indicated
hereinafter. On 21st
May, 1986 there was a
motion for fairness hearing on behalf of the private plaintiffs. On 26th June, 1986 individual plaintiffs filed appeal
before the US Court of Appeal for the second circuit challenging the order of
Judge Keenan. By an order dated 28th May, 1986 Judge Keenan declined the motion for a fairness hearing.
The request for fairness hearing was rejected at the instance of Union of India
in view of the meagerness of the amount of proposed settlement. On 10th July, 1986 UCC filed an appeal before the US
Court of Appeal for the Second Circuit. It challenged Union of India being
entitled to American mode of discovery, but did not challenge the other two
conditions imposed by Judge Keenan, it is stated. On 28th July, 1986 the Union of India filed cross-appeal
before the US Court of Appeal praying that none of the conditions imposed by
Judge Keenan should be disturbed. In this connection it would be pertinent to
set out the conditions incorporated in the order of Judge Keenan, dated 12th May, 1986 whereby he had dismissed the case
before him on the ground of forum non convenience, as mentioned before. The
conditions were following:
1.
That UCC shall consent to the jurisdiction of the courts of India and shall continue to waive
defenses based on the statute of limitation,
2.
That UCC shall agree to satisfy any judgment rendered by an Indian court
against it and if applicable, upheld on appeal, provided the judgment
and-affirmance "comport with minimal requirements of due process";
and
3.
That UCC shah be subject to discovery under the Federal Rules of Civil
Procedure of the US after appropriate demand by the
plaintiffs.
9. On 5th September, 1986 the Union of India filed a suit for
damages in the Distt. Court of Bhopal, being regular suit No. H 13/86. It is
this suit, inter alia, and the orders passed therein which were settled by the
orders of this Court dated 14th & 15th February, 1989, which will be referred to later. On
17th November, 1986 upon the application of the Union
of India, the Distt. Court, Bhopal,
granted a temporary injunction restraining the UCC from selling assets, paying
dividends or buying back debts. On 27th November, 1986 the UCC gave an undertaking to
preserve and maintain unencumbered assets to the extent of 3 billion US dollars.
623
10. On
30th November, 1986 the Distt. Court, Bhopal lifted the
injunction against the Carbide selling assets on the strength of the written
undertaking by UCC to maintain unencumbered assets of 3 billion US dollars. On 16th December, 1986 UCC filed a written statement
contending that they were not liable on the ground that they had nothing to do
with the Indian Company; and that they were a different legal entity; and that
they never exercised any control and that they were not liable in the suit. Thereafter,
on 14th January, 1987 the Court of Appeal for the Second
Circuit affirmed the decision of Judge Keenan but deleted the condition
regarding the discovery under the American procedure granted in favour of the
Union of India. It also suo motu set aside the condition that on the judgment
of the Indian court complying with due process and the decree issued should be
satisfied by UCC. 1t ruled that such a condition cannot be imposed as the
situation was covered by the provisions of the Recognition of Foreign Country
Money Judgments Act.
11. On
2nd April, 1987, the court made a written proposal
to all parties for considering reconciliatory interim relief to the gas
victims. In September, 1987, UCC and the Govt. of India sought time from the
Court of Distt. Judge, Bhopal, to explore avenues for settlement.
It has been asserted by the learned Attorney General that the possibility of
settlement was there long before the full and final settlement was effected. He
sought to draw our attention to the assertion that the persons concerned were
aware that efforts were being made from time to time for settlement.
However,
in November'87 both the Indian Govt. and the Union Carbide announced that
settlement talks had failed and Judge Deo extended the time.
12.
The Distt. Judge of Bhopal on 17th December, 1987 ordered interim relief amounting to Rs.350 crores.
Being aggrieved thereby the UCC filed a Civil Revision which was registered as
Civil Revision Petition No. 26/88 and the same was heard. On or about 4th
February, 1988, the Chief Judicial Magistrate of Bhopal ordered notice for
warrant on Union Carbide, Hong Kong for the criminal case filed by CBI against
Union Carbide. The charge sheet there was under sections 304, 324, 326, 429 of
the Indian Penal Code read with section 35 IPC and the charge was against
S/Shri Warren Anderson, Keshub Mahindra. Vijay Gokhale, J. Mukund, Dr. R.B. Roy
Chowdhay. S.P. Chowdhary, K.V. Shetty, S.1. Qureshi and Union Carbide of
U.S.A., Union Carbide of Hong Kong and Union Carbide having Calcutta address. It charged the Union
Carbide by saying that MIC gas was stored and it was further stated that MIC
had to be stored and handled 624 in stainless steel which was not done.
The
charge sheet, inter alia, stated that a Scientific Team headed by Dr.
Varadarajan had concluded that the factors which had led to the toxic gas
leakage causing its heavy toll existed in the unique properties of very high
reactivity, volatility and inhalation toxicity of MIC. It was further stated in
the charge sheet that the needless storage of large quantities of the material
in very large size containers for inordinately long periods as well as
insufficient caution in design, in choice of materials of construction and in
provision of measuring and alarm instruments, together with the inadequate
controls on systems of storage and on quality of stored materials as well as
lack of necessary facilities for quick effective disposal of material
exhibiting instability, led to the accident. It also charged that MIC was stored
in a negligent manner and the local administration was not informed, inter
alia, of the dangerous effect of the exposure of MIC or the gases produced by
its reaction and the medical steps to be taken immediately. It was further
stated that apart from the design defects the UCC did not take any adequate
remedial action to prevent back flow of solution from VGS into RVVH and PVH
lines. There were various other acts of criminal negligence alleged. The High
Court passed an order staying the operation of the order dated 17.12.87
directing the defendant-applicant to deposit Rs.3,500 millions within two
months from the date of the said order. On 4th April, 1988 the judgment and order were passed
by the High Court modifying the order of the Distt. Judge, and granting interim
relief of Rs.250 crores. The High Court held that under the substantive law of
torts, the Court has jurisdiction to grant interim relief under Section 9 of
the CPC. On 30th June,
1988 Judge Deo passed
an order restraining the Union Carbide from settling with any individual gas
leak plaintiffs. On 6th
September, 1988
special leave was granted by this Court in the petition filed by UCC against
the grant of interim relief and Union of India was also granted special leave
in the petition challenging the reduction of quantum of compensation from
Rs.350 crores to Rs.250 crores. Thereafter, these matters were heard in
NovemberDecember'88 by the bench presided over by the learned Chief Justice Of
India and hearing, continued also in January February'89 and ultimately on 14-15th February, 1989 the order culminating in the
settlement was passed.
13. In
judging the constitutional validity of the Act, the subsequent events, namely,
how the Act has worked itself out, have to be looked into. It is, therefore,
necessary to refer to the two orders of this Court. The proof of the cake is in
its eating, it is said, and it is perhaps not possible to ignore the terms of
the settlement reached on 14th and 625 15th February, 1989 in considering the effect of the
language used in the Act. Is that valid' or proper--or has the Act been worked
in any improper way? These questions do arise.
14. On
14th February, 1989 an order was passed in C.A. Nos. 3187-88/88 with S.L.P. (C) No. 13080/88. The
parties thereto were UCC and the Union of India as well as Jana Swasthya
Kendra, Bhopal, Zehraeli Gas Kand Sangharsh
Morcha, Bhopal. MP. That order recited that having
considered all the facts and the circumstances of the case placed before the
Court, the material relating to the proceedings in the Courts in the United
States of America, the offers and counter-offers made between the parties at
different stages during the various proceedings, as well as the complex issues
of law and fact raised and the submissions made thereon, and in particular the
enormity of human suffering occasioned by the Bhopal Gas disaster and the
pressing urgency to provide immediate and substantial relief to victims of the
disaster, the 'Court found that the case was preeminently fit for an overall
settlement between the parties covering all litigations, claims, rights and
liabilities relating to and arising out of the disaster and it was found just,
equitable and reasonable to pass, inter alia, the following orders:
.lm
"(1) The Union Carbide Corporation shall pay a sum of U.S. Dollars 470
million (Four hundred and seventy millions) to the Union of India in full
settlement of all claims, fights and liabilities related to and arising out of
Bhopal Gas disaster.
(2)
The aforesaid sum shall be paid by the Union Carbide Corporation to the Union
of India on or before 31st
March, 1989.
(3) To
enable the effectuation of the settlement, all civil proceedings related to and
arising out of the Bhopal Gas disaster shall hereby stand transferred to this
Court and shall stand concluded in terms of the settlement, and all criminal
proceedings related to and arising out of the disaster shall stand quashed
wherever these may be pending
15. A
written memorandum was filed thereafter and the Court on 15th February, 1989 passed an order after giving due
consideration thereto. The terms of settlement were as follows:
626
"1. The parties acknowledge that the order dated February 14, 1989 disposes of in its entirety all
proceedings in Suit No. 1113 of 1986. This settlement shall finally dispose of
all past, present and future claims, causes of action and civil and criminal
proceedings (of any nature whatsoever wherever pending) by all Indian citizens
and all public and private entities with respect to all past, present or future
deaths, personal injuries, health effects, compensation, losses, damages and
civil and criminal complaints of any nature whatsoever against UCC, Union
Carbide India Limited, Union Carbide Eastern, and all of their subsidiaries and
affiliates as well as each of their present and former directors, officers,
employees, agents, representatives, attorneys, advocates and solicitors arising
out of, relating to or connected with the Bhopal gas leak disaster, including
past, present and future claims, causes of action and proceedings against each
other. All such claims and causes of action whether within or outside India of
Indian citizens, public or private entities are hereby extinguished, including
without limitation each of the claims filed or to be filed under the Bhopal Gas
Leak Disaster (Registration and Processing of Claims) Scheme 1985, and all such
civil proceedings in India are hereby transferred to this Court and are
dismissed without prejudice, and all such criminal proceedings including
contempt proceedings stand quashed and accused deemed to be acquitted.
2.
Upon full payment in accordance with the Court's directions the undertaking
given by UCC pursuant to the order dated November 30, 1986 in the District Court, Bhopal stands discharged, and all orders
passed in Suit No. 1113 of 1986 and or in any Revision therefrom, also stand
discharged."
16. It
appears from the statement of objects & reasons of the Act that the
Parliament recognized that the gas leak disaster involving the release, on 2nd
and 3rd December, 1984 of highly noxious and abnormally dangerous gas from a
plant of UCIL, a subsidiary of UCC, was of an unprecedented nature, which
resulted in loss of life and damage to property on an extensive scale, as
mentioned before. It was stated that the victims who had managed to survive
were still suffering from the adverse effects and the further complications
which might arise in their cases, of course, could not be fully visualised. It
was asserted by 627 Ms. Indira Jaising that in case of some of the victims the
injuries were carcinogenic and ontogenic and these might lead to further
genetic complications and damages. The Central Govt. and the Govt. of Madhya
Pradesh and various agencies had to incur expenditure on a large scale for
containing the disaster and mitigating or otherwise coping with the effects
thereto. Accordingly, the Bhopal Gas Leak Disaster (Processing of Claims)
Ordinance, 1985 was promulgated, which provided for the appointment of a
Commissioner for the welfare of the victims of the disaster and for the
formulation of the Scheme to provide for various matters necessary for
processing of the claims and for the utilisation by way of disbursal or
otherwise of amounts received in satisfaction of the claims.
17.
Thereafter, the Act was passed which received the assent of the President on 29th March, 1985. Section 2(b) of the Act defines
'claim'. It says that "claims" means--(i) a claim, arising out of, or
connected with, the disaster, for compensation or damages for any loss of life
or personal injury which has been, or is likely to be suffered; (ii) a claim,
arising out of, or connected with, the disaster, for any damage to property
which has been, or is likely to be, sustained; (iii) a claim for expenses
incurred or required to be incurred for containing the disaster or mitigating
or otherwise coping with the effects of the disaster; (iv) any other claim
(including any claim by way of loss of business or employment) arising out of,
or connected with, the disaster. A "claimant" is defined as a person
entitled to make a claim. It has been provided in the Explanation to Section 2
that for the purpose of clauses (b) and (c), where the death of a person has
taken place as a result of the disaster, the claim for compensation or damages
for the death of such person shall be for the benefit of the spouse, children
(including a child in the womb) and other heirs of the deceased and they shall
be deemed to be the claimants in respect thereof.
18.
Section 3 is headed "Power of Central Govt. to represent claimants".
It provides as follows:
"3(1)
Subject to the other provisions of this Act, the Central Government shall, and
shall have the exclusive right to, represent, and act in place of (whether
within or outside India) every person who has made, or is entitled to make, a
claim for all purposes connected with such claim in the same manner and to the
same effect as such persons.
(2) In
particular and without prejudice to the generality of 628 the provisions of
sub-section (1), the purposes referred to therein include-(a) Institution of
any suit or other proceeding in or before any court or other authority (whether
within or outside India) or withdrawal of any such suit or other proceeding,
and (b) entering into a compromise.
(3)
The provisions of sub-section (1) shall apply also in relation to claims in
respect of which suits or other proceedings have been instituted in or before
any court or other authority (whether within or outside India) before the
commencement of this Act:
Provided
that in the case of any such suit or other proceeding with respect to any claim
pending immediately before the commencement of this Act in or before any court
or other authority outside India, the Central Govt.
shall
represent, and act in place of, or along with, such claimant, if such court or
other authority so permits."
19.
Section 4 of the Act is headed as "Claimant's right to be represented by a
legal practitioner". It provides as follows:
"Notwithstanding
anything contained in section 3, in representing, and acting in place of, any
person in relation to any claim, the Central Government shall have due regard
to any matters which such person may require to be urged with respect to his
claim and shall, if such person so desires, permit at the expense of such
person, a legal practitioner of his choice to be associated in the conduct of
any suit or other proceeding relating to his claim." 20. Section 5 deals
with the powers of the Central Govt. and enjoins that for the purpose of
discharging its functions under this Act, the Central Govt. shall have the
powers of a civil court while trying a suit under the Code of Civil Procedure,
1908. Section 6 provides for the appointment of a Commissioner and other
officers and employees. Section 7 deals with powers to delegate. Section 8
deals with limitation, while section 9 deals with the power to frame Scheme.
The Central Govt. was enjoined to frame a scheme which was to take into
account, inter alia, the processing of the claims for securing their
enforcement, creation of a fund for meeting expenses in connection 629 with the
administration of the Scheme and of the provisions of this Act and the amounts
which the Central Govt. might, after due appropriation made by the Parliament
by law in that behalf, credit to the fund referred to in clauses above and any
other amounts which might be credited to such fund.
Such
Scheme was enjoined, as soon as after it had been framed, to be laid before
each House of Parliament. Section 10 deals with removal of doubts. Section 11
deals with the overriding effect and provides that the provisions of the Act
and of any Scheme framed thereunder shall have effect notwithstanding anything
inconsistent therewith contained in any enactment other than the Act or any
instrument having effect by virtue of any enactment other than the Act.
21. A
Scheme has been framed and was published on 24th September, 1985. Clause 3 of the said Scheme provides that the
Deputy Commissioners appointed under Section 6 of the Act shall be the
authorities for registration of Claims (including the receipt, scrutiny and
proper categorisation of such claims under paragraph 5 of the Scheme) arising
within the areas of their respective jurisdiction and they shall be assisted by
such other officers as may be appointed by the Central Govt. under Section 6 of
the Act for scrutiny and verification of the claims and other related matters.
The
Scheme also provides for the manner of filing claims. It enjoins that the Dy.
Commissioner shall provide the required forms for filing the applications. It
also provides for categorisation and registration of claims. Sub-clause (2) of
Clause 5 enjoins that the claims received for registration shall be placed
under different heads.
22.
Sub-clause (3) of clause 5 enjoins that on the consideration of claims made
under paragraph 4 of the Scheme, if the Dy. Commissioner is of the opinion that
the claims fall in any category different from the category mentioned by the
claimant, he may decide the appropriate category after giving an opportunity to
the claimant to be heard and also after taking into consideration any facts
made available to him in this behalf. Sub-clause (6) of Clause 5 enjoins that
if the claimant is not satisfied with the order of the Dy. Commissioner, he may
prefer an appeal against such order to the Commissioner, who shall decide the
same.
23.
Clause 9 of the Scheme provides for processing of Claims Account Fund, which
the Central Govt. may, after due appropriation made by Parliament, credit to
the said Fund.
It
provides that there shall also be a Claims and Relief Fund, which will include
the amounts 630 received in satisfaction of the claims and any other amounts
made available to the Commissioner as donation or for relief purposes.
Subclause (3) of clause 10 provides that the amount in the said Fund shall be
applied by the Commissioner for, disbursal of amounts in settlement of claims,
or as relief, or apportionment of part of the Fund for disbursal of amounts in
settlement of claims arising in future or for disbursal of amounts to the Govt.
of Madhya Pradesh for the social and economic rehabilitation of the persons
affected by the Bhopal gas leak disaster.
24.
Clause 11 of the Scheme deals with the disbursal, apportionment of certain
amounts, and sub-clause (2) thereof enjoins that the Central Govt. may
determine the total amount of compensation to be apportioned for each category
of claims and the quantum of compensation payable, in general, in relation to
each type of injury or loss. Sub-clause (5) thereto provides that in case of a
dispute as to disbursal of the amounts received in satisfaction of claims, an
appeal shall lie against the order of the Dy. Commissioner to the Additional
Commissioner, who may decide the matter and make such disbursal as he may, for
reasons to be recorded in writing, think fit. The other clauses are not
relevant for our present purposes.
25.
Counsel for different parties in all these matters have canvassed their
submissions before us for the gas victims. Mr. R.K. Garg, Ms. Indira Jaising,
and Mr. Kailash Vasudev have made various submissions challenging the validity
of the Act on various grounds. They all have submitted that the Act should be
read in the way they suggested and as a whole. Mr. Shanti Bhushan, appearing
for interveners on behalf of Bhopal Gas Peedit Mahila Udyog Sangathan and
following him Mr. Prashant Bhushan have urged that the Act should be read in
the manner canvassed by them and if the same is not so read then the same would
be violative of the fundamental rights of the victims, and as such
unconstitutional. The learned Attorney General assisted by Mr. Gopal
Subramanium has on the other hand urged that the Act is valid and
constitutional and that the settlement arrived at on 14th/15th February is
proper and valid.
26. In
order to appreciate the background Ms. Indira Jaising placed before us the
proceedings of the Lok Sabha wherein Mr. Veerendra Patil, the Hon'ble Minister,
stated on March 27, 1985 that the tragedy that had occurred in Bhopal on 2nd
and 3rd December, 1984 was unique and unprecedented in character and magnitude
not only for our country but for the entire world. It was stated that one of
631 the options available was to settle the case in Indian courts. The second
one was to file the cases in American courts. Mr. Patil reiterated that the
Govt. wanted to proceed against the parent company and also to appoint a
Commission of Inquiry.
27.
Mr. Garg in support of the proposition that the Act was unconstitutional,
submitted that the Act must be examined on the touchstone of the fundamental
rights on the basis of the test laid down by this court in state of Madras v.
V.G, Row, [1952] SCR 597, There at page 607 of the report this Court has
reiterated that in considering the reasonableness of the law imposing
restrictions on the fundamental rights, both the substantive and the procedural
aspects of the impugned restrictive law should be examined from the point of
view of reasonableness. And the test of reasonableness, wherever prescribed,
should be applied to each individual Statute impugned, and no abstract standard
or general pattern of reasonableness can be laid down as applicable to all
cases. The nature of the right alleged to have been infringed, the underlying
purpose of the restrictions imposed, the extent and urgency of the evil sought
to be remedied thereby, the disproportion of the imposition, the prevailing
conditions at the time, should all enter into the judicial verdict. (The
emphasis supplied). Chief Justice Patanjali Sastri reiterated that in
evaluating such elusive factors and forming their own conception of what is
reasonable, in the circumstances of a given case, it is inevitable that the
social philosophy and the scale of values of the judges participating in the
decision would play an important role.
28.
Hence, whether by sections, 3, 4 & 11 the rights of the victims and the
citizens to fight for their own causes and to assert their own grievances have
been taken away validly and properly, must be judged in the light of the
prevailing conditions at the time, the nature of the right of the citizen, the
purpose of the restrictions on their rights to sue for enforcement in the
courts of law or for punishment for offences against his person or property,
the urgency and extent of the evils sought to be remedied by the Act, and the
proportion of the impairment of the rights of the citizen with reference to the
intended remedy prescribed. According to Mr. Garg, the present position called
for a comprehensive appreciation of the national and international background
in which precious rights to life and liberty were enshrined as fundamental
rights and remedy for them was also guaranteed under Article 32 of the
Constitution. He sought to urge that multinational corporations have assumed
powers or potencies to override the political and economic independence of the
sovereign nations which have 632 been used to take away in the last four
decades, much wealth out of the Third World. Now these are plundered much more than what was done to the erstwhile
colonies by imperialist nations in the last three centuries of foreign rule.
The role of courts in cases of conflict between rights of citizens and the vast
economic powers claimed by multinational corporations to deny moral and legal
liabilities for their corporate criminal activities should not be lost sight
of.
He, in
this background, urged that these considerations assume immense importance to
shape human fights jurisprudence under the Constitution, and for the Third
World to regulate and control the power and economic interests of multinational
corporations and the power of exploitation and domination by developed nations
without submitting to due observance of the laws of the developing countries.
It therefore appears that the production of, or carrying on trade in dangerous
chemicals by multinational industries on the soil of Third World countries call
for strictest enforcement of constitutional guarantees for enjoying human
fights in free India, urged Mr. Garg. In this connection, our attention was
drawn to the Charter of Universal Declaration of Human Rights. Article 1 of the
Universal Declaration of Human Rights, 1948 reiterates that all human-beings
are born free and equal in dignity and rights. Article 3 states that everyone
has right to life, liberty and security of person.
Article
6 of the Declaration states that everyone has the right to recognition
everywhere as a person before the law. Article 7 states that all are equal
before the law and are entitled without any discrimination to equal protection
of the law. All are entitled to equal protection against any discrimination in
violation of the Declaration of Human Rights and against any incitement to such
discrimination. Article 8 states that everyone has the right to an effective
remedy by competent National Tribunal for acts violating fundamental rights
guaranteed to him by the Constitution or by the law. It is, therefore,
necessary to bear in mind that Indian citizens have a fight to live which
cannot be taken away by the Union of India or the Govt. of a State, except by a
procedure which is just, fair and reasonable. The right to life includes the
fight to protection of limb against mutilation and physical injuries, and does
not mean merely the fight to breathe but also includes the fight to livelihood.
It was urged that this right is available in all its dimension till the last
breath against all injuries to head, heart and mind or the lungs affecting the
citizen or his next generation or of genetic disorders. The enforcement of the
right to life or limb calls for adequate and appropriate reliefs enforceable in
courts of law and of equity with sufficient power to offer adequate deterrence
in all cases of corporate criminal liability under strict liability, absolute
liability, punitive liability and criminal prosecution and 633 punishment to
the delinquents. The damages awarded in civil jurisdiction must be commensurate
to meet well-defined demands of evolved human rights jurisprudence in modern
world. It was, therefore, submitted that punishment in criminal jurisdiction
for serious offences is independent of the claims enforced in civil
jurisdiction and no immunity against it can be granted as part of settlement in
any civil suit. If any Act authorises or permits doing of the same, the same
will be unwarranted by law and as such bad. The Constitution of India does not
permit the same.
29.
Our attention was drawn to Article 21 of the Constitution and the principles of
international law. Right to equality is guaranteed to every person under Art.
14 in all matters like the laws of procedure for enforcement of any legal or
constitutional right in every jurisdiction, substantive law defining the rights
expressly or by necessary implications, denial of any of these rights to any
class of citizens in either field must have nexus with constitutionally
permissible object and can never be arbitrary. Arbitrariness is, therefore,
anti-thetical to the right of equality. In this connection, reliance was placed
on the observations of this Court in E.P. Royappa v. State of Tamil Nadu &
Anr., [1974] 2 SCR 348 and Maneka Gandhi v. Union of India, [1978] 2 SCR 621
where it was held that the view that Articles 19 & 21 constitute watertight
compartments has been rightly overruled. Articles dealing with different
fundamental rights contained in Part III of the Constitution do not represent
entirely separate streams of rights which do not mingle at any point of time. They.
are all parts of an integrated scheme in the Constitution and must be preserved
and cannot be destroyed arbitrarily. Reliance was placed on the observations in
R.D. Shetty v. The I.A.A. of India & Ors., [1979] 3 SCR 1014. Hence, the
rights of the citizens to fight for remedies and enforce their rights flowing
from the breach of obligation in respect of crime cannot be obliterated. The
Act and Sections 3, 4 & 11 of the Act in so far as these purport to do so
and have so operated, are violative of Articles 14, 19(1)(g) and 21 of the
Constitution. The procedure envisaged by the said Sections deprives the just
and legitimate rights of the victims to assert and obtain their just dues. The
rights cannot be so destroyed.
It was
contended that under the law the victims had right to ventilate their rights.
30. It
was further contended that Union of India was a joint tort-feasor along with
UCC and UCIL. It had negligently permitted the establishment of such a factory
without proper safeguards exposing the victims and citizens to great danger.
Such a person or authority 634 cannot be entrusted to represent the victims by
denying the victims their rights to plead their own cases. It was submitted
that the object of the Act was to fully protect people against the disaster of
highly obnoxious gas and disaster of unprecedented nature. Such an object
cannot be achieved without enforcement of the criminal liability by criminal
prosecution. Entering into settlement without reference to the victims was,
therefore, bad and unconstitutional, it was urged. If an Act, it was submitted,
permits such a settlement or deprivation of the rights of the victims, then the
same is bad.
31.
Before we deal with the various other contentions raised in this case, it is
necessary to deal with the application for intervention and submission made on
behalf of the Coal India in Writ Petition No. 268/89 wherein Mr. L.N. Sinha in
his written submission had urged for the intervener that Article 21 of the
Constitution neither confers nor creates nor determines the dimensions nor the
permissible limits of restrictions which appropriate legislation might impose
on the right to life or liberty. He submitted that provisions for procedure are
relevant in judicial or quasi judicial proceedings for enforcement of rights or
obligations. With regard to alteration of rights, procedure is governed by the
Constitution directly. He sought to intervene on behalf of Coal India and wanted these submissions to be
taken into consideration. However, when this contention was sought to be urged
before this Court on 25th
April, 1989, after
hearing all the parties, it appeared that there was no dispute between the
parties in the instant writ petitions between the victims and the Government of
India that the rights claimed in these cases are referrable to Article 21 of
the Constitution. Therefore, no dispute really arises with regard to the
contention of Coal India and we need not consider the
submissions urged by Shri Sinha on behalf of the intervener in this case. It
has been so recorded.
32. By
the order dated 3rd
March, 1989, Writ
Petitions Nos. 268/89 and 164/86 have been directed to be disposed of by this Bench.'
We have heard these two writ petitions along with the other writ petitions and
other matters as indicated hereinbefore. The contentions are common. These writ
petitions question the validity of the Act and the settlement entered into
pursuant to the Act. Writ Petition No. 164/86 is by one Shri Rakesh Shrouti who
is an Indian citizen and claims to be a practising advocate having his
residence at Bhopal. He says that he and his family members were at Bhopal on 2nd/3rd December, 1984 and suffered immensely as a result of the gas leak. He
challenges the validity of the Act on various grounds. He contends that the
Union of India should not have the exclusive right to represent the 635 victims
in suits against the Union Carbide and thereby deprive the victims of their
right to sue and deny access to justice. He further challenges the right of the
Union of India to represent the victims against Union Carbide because of
conflict of interests. The conduct of the Union of India was also deprecated
and it was further stated that such conduct did not inspire confidence. In the
premises, the said petitioner sought a declaration under Article 32 of the
Constitution that the Act is void, inoperative and unenforceable as violative
of Articles 14, 19 & 21 of the Constitution Similarly, the second writ
petition, namely, writ petition No. 268/89 which is filed by Sh. Charan Lal
Sahu, who is also a practising Advocate on behalf of the victims and claims to
have suffered damages as a result of the gas leak. challenges the Act. He
further challenges the settlement entered into under the Act. He says that the
said settlement was violative of principles of natural justice and the
fundamental right of the said petitioner and other victims. It is his case that
in so far as the Act permits such a course to be adopted, such a course was not
permissible under the Constitution. He further asserts that the Union of India
was negligent and a joint tort-feasor. In the premises, according to him, the
Act is bad, the settlement is bad and these should be set aside.
33. In
order to determine the question whether the Act in question is constitutionally
valid or not in the light of Articles 14, 19(l)(g) and 21 of the Constitution,
it is necessary to find out what does the Act actually mean and provide for.
The Act in question, as the Preamble to the Act states, was passed in order to
confer powers on the Central Government to secure that the claims arising out
of, or connected with, the Bhopal gas leak disaster are dealt with speedily,
effectively, equitably and to the best advantage of the claimants and for
matters incidental thereto. Therefore, securing the claims arising out of or
connected with the Bhopal gas leak disaster is the object and
purpose of the Act. We have noticed the proceedings of the Lok Sabha in
connection with the enactment of the Act. Our attention was also drawn by the
learned Attorney General to the proceedings of the Rajya Sabha wherein the
Hon'ble Minister, Shri Virendra Patil explained that the bill enabled the Government
to assume exclusive right to represent and act, whether within or outside India
in place of every person who had made or was entitled to make claim in relation
to the disaster and to institute any suit or other proceedings or enter into
any compromise as mentioned in the Act. The whole object of the Bill was to
make procedural changes to the existing Indian law which would enable the
Central Government to take up the responsibility of fighting litigation on
behalf of these victims. The first point was that it 636 sought to create a
locus standi in the Central Government to file suits on behalf of the victims. The
object of the Statute. it was highlighted, was that because of the dimension of
the tragedy covering thousands of people, large number of whom being poor,
would not be able to go to the courts, it was necessary to create the locus
standi in the Central Government to start the litigation for payment of
compensation in the courts on their behalf. The second aspect of the Bill was
that by creating this locus standi in the Central Government, the Central
Government became competent to institute judicial proceedings for payment of
compensation on behalf of the victims. The next aspect of the Bill was to make
a distinction between those on whose behalf suits had already been filed and
those on whose behalf proceedings had not yet then been instituted. One of the
Members emphasised that under Article 21 of the Constitution, the personal
liberty of every citizen was guaranteed and it has been widely interpreted as
to what was the meaning of the expression 'personal liberty'. It was cmphasised
that one could not take away the right of a person, the liberty of a person, to
institute proceedings for his own benefit and for his protection. It is from
this point of view that it was necessary, the member debated, to preserve the
right of a claimant to have his own lawyers to represent him along with the
Central Government in the proceedings under Section 4 of the Act, this made the
Bill constitutionally valid.
34.
Before we deal with the question of constitutionality, it has to be emphasised
that the Act in question deals with the Bhopal gas leak disaster and it deals
with the claims meaning thereby claims arising out of or connected with the
disaster for compensation of damages for loss of life or any personal injury
which has been or is likely to be caused and also claims arising out of or
connected with the disaster for any damages to property or claims for expenses
incurred or required to be incurred for containing the disaster or making or
otherwise coping with the impact of the disaster and other incidental claims.
The Act in question does not purport to deal with the criminal liability, if
any, of the parties or persons concerned nor it deals with any of the consequences
flowing from those. This position is clear from the provisions and the Preamble
to the Act. Learned Attorney General also says that the Act does not cover
criminal liability. The power that has been given to the Central Government is
to represent the 'claims', meaning thereby the monetary claims. The monetary
claims, as was argued on behalf of the victims, are damages flowing from the
gas disaster. Such damages, Mr. Garg and Ms. Jaising submitted, are based on
strict liability, absolute liability and punitive liability. The Act does not,
either expressly or impliedly, deal with the extent of the damages or 637 liability.
Neither section 3 nor any other section deals with any consequences of criminal
liability. The expression "the Central Government shall, and shall have
the exclusive right to, represent, and act in place of (whether within or
outside India) every person who has made, or is entitled to make, a claim for
all purposes connected with such claim in the same manner and to the same effect
as such person", read as it is, means that Central Government is
substituted and vested with the exclusive right to act in place of the victims,
i.e., eliminating the victims, their heirs and their legal representatives, in
respect of all such claims arising out of or connected with the Bhopal gas leak
disaster. The right, therefore, embraces right to institute proceedings within
or outside India along with right to institute any
suit or other proceedings or to enter into compromise. Sub-section 1 of section
3 of the Act, therefore, substitutes the Central Government in place of the
victims. The victims, or their heirs and legal representatives, get their
rights substituted in the Central Government along with the concomitant right
to institute such proceedings, withdraw such proceedings or suit and also to
enter into compromise. The victims or the heirs or the legal representatives of
the victims, are substituted and their rights are vested in the Central
Government. This happens by operation of section 3 which is the legislation in
question.
Sub-section
(3) of section 3 makes it clear that the provisions of sub-section (1) of
section 3 shall also apply in relation to claims in respect of which suits or
other proceedings have been instituted in or before any court or other
authority (whether within or outside India) before the commencement of this
Act, but makes a distinction in the case of any such suit or other proceeding
with respect to any claim pending immediately before the commencement of this
Act in or before any court or other authority outside India, and provides that
the Central Government shall represent, and act in place of, or along with,
such claimant, if such court or other authority so permits. Therefore, in cases
where such suits or proceedings have been instituted before the commencement of
the Act in any court or before any authority outside India, the section by its
own force will not come into force in substituting the Central Government in
place of the victims or the heirs or their legal representatives, but the
Central Government has been given the right to act in place of, or along with,
such claimant, provided such court or other authority so permits. It is to have
adherence and conformity with the procedure of the countries or places outside India, where suits or proceedings are to
be instituted or have been instituted. Therefore, the Central Government is
authorised to act along with the claimants in respect of proceedings instituted
outside India subject to the orders of such courts
or the authorities. Is such a right valid and proper? 638
35.
There is the concept known both in this country and abroad, called "parens
patriae. Dr. D.K. Mukherjea in his "Hindu Law of Religious and Charitable
Trusts", Tagore Law Lectures, Fifth Edition, at page 404, referring to the
concept of parens patriae, has noted that in English Law, the Crown as parens
patriae is the constitutional protector of all property subject to charitable
trusts, such trusts being essentially matters of public concern. Thus the
position is that according to Indian concept parens patriae doctrine recognized
King as the protector of all citizens and as parent. In Budhakaran Chankhani v.
Thakur Prasad Shah, AIR 1942 Cal. 311 the position was explained by the
Calcutta High Court at page 3 18 of the report. The same position was
reiterated by the said Court in Banku Behary Mondal v. Banku Behary Hazra &
Anr., AIR 1943 Cal. 203 at page 205 of the report. The
position was further elaborated and explained by the Madras High Court in Medai
Dalavoi T. Kumaraswami Mudaliar v. Medai Dalavoi Rajammal, AIR 1957 Mad. 563 at page 567 of the report. This Court also
recognized the concept of parens patriae relying on the observations of Dr.
Mukherjea aforesaid in Ram Saroop v. S.P. Sahi, [1959] 2 Supp. SCR 583, at
pages 598 and 599. In the "Words and Phrases" Permanent edition, Vol.
35 at p. 99, it is stated that parens patriae is the inherent power and
authority of a Legislature to provide protection to the person and property of persons
non suijuris, such as minor, insane, and incompetent persons, but the words
"parens patriae" meaning thereby 'the father of the country', were
applied originally to the King and are used to designate the State referring to
its sovereign power of guardianship over persons under disability, (Emphasis
supplied). Parens patriae jurisdiction, it has been explained, is the right of
the sovereign and imposes a duty on sovereign, in public interest, to protect
persons under disability who have no rightful protector. The connotation of the
term "parens patriae" differs from country to country, for instance,
in England it is the King, in America it is the people, etc. The
Government is within its duty to protect and to control persons under
disability. Conceptually, the parens patriae theory is the obligation of the
State to protect and take into custody the rights and the privileges of its
citizens for discharging its obligations. Our Constitution makes it imperative
for the State to secure to all its citizens the rights guaranteed by the
Constitution and where the citizens are not in a position to assert and secure
their rights, the State must come into picture and protect and fight for the
rights of the citizens. The Preamble to the Constitution, read with the
Directive Principles, Articles 38, 39 and 39A enjoins the State to take up
these responsibilities. It is the protective measure to which the social
welfare state is committed. It is necessary for the State to ensure the
funda639 mental rights in conjunction with the Directive Principles of State
Policy to effectively discharge its obligation and for this purpose, if
necessary, to deprive some rights and privileges of the individual victims or
their heirs to protect their rights better and secure these further. Reference
may be made to Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 US 592, 73
L. Ed. 2d 995, 1028. Ct, 3260 in this connection. There it was held by the
Supreme Court of the United States of America that Commonwealth of Puerto have
standing to sue as parens patriae to enjoin apple growers' discrimination
against Puerto Rico migrant farm workers. This case illustrates in some aspect
the scope of 'parens patriae'. The Commonwealth of Puerto
Rico sued in the
United States District Court for the Western District of Virginia, as parens
patriae for Puerto Rican migrant farm workers, and against Virginia apple growers, to enjoin
discrimination against Puerto Ricans in favour of Jamaican workers in violation
of the Wagner-Peyser Act, and the Immigration and Nationality Act. The District
Court dismissed the action on the ground that the Commonwealth lacked standing
to sue, but the Court of Appeal for the Fourth Circuit reversed it. On
certiorari, the United States Supreme Court affirmed. In the opinion by White,
J. joined by Burger, Chief Justice and Brennan, Marshall, Blackman, Rennquist,
Stevens, and O'Connor, JJ., it was held that Puerto Rico had a claim to
represent its quasi sovereign interests in federal court at least which was as
strong as that of any State, and that it had parens patriae standing to sue to
secure its residents from the harmful effects of discrimination and to obtain
full and equal participation in the federal employment service scheme
established pursuant to the Wagner-Peyser Act and the Immigration and
Nationality Act of 1952. Justice White referred to the meaning of the
expression "parens patriae". According to Black's Law Dictionary, 5th
Edition 1979, page 1003, it means literally 'parent of the country' and refers
traditionally to the role of the State as a sovereign and guardian of persons
under legal disability. Justice White at page 1003 of the report emphasised
that the parens patriae action had its roots in the common-law concept of the
"royal prerogative". The royal prerogative included the right or
responsibility to take care of persons who were legally unable, on account of
mental incapacity, whether it proceeds from nonage, idiocy, or lunacy to take
proper care of themselves and their property. This prerogative of parens
patriae is inherent in the supreme power of every state, whether that power is
lodged in a royal person or m the legislature and is a most beneficent
function. After discussing several cases Justice White observed at page 1007 of
the report that in order to maintain an action, in parens patriae, the state
must articulate an interest apart from the interests of 640 particular parties,
i.e. the State must be more than a nominal party. The State must express a
quasi-sovereign interest. Again an instructive insight can be obtained from the
observations of Justice Holmes of the American Supreme Court in the case of Georgia v. Tennessee Copper Co., 206 US 230, 51 L.Ed. 1038, 27 S Ct 618, which was a case
involving air pollution in Georgia caused by the discharge of noxious gases
from the defendant's plant in Tennessee. Justice Holmes at page 1044 of the
report described the State's interest as follows:
"This
is a suit by a State for an injury to it in its capacity of quasi-sovereign. In
that capacity the State has an interest independent of and behind the titles of
its citizens, in all the earth and air within its domain. It has the last word
as to whether its mountains shall be stripped of their forests and its
inhabitants shall breathe pure air. It might have to pay individuals before it
could utter that word, but with it remains the final power ......
.....
When the States by their union made the forcible abatement of outside nuisances
impossible to each, they did not thereby agree to submit to whatever might be
done. They did not renounce the possibility of making reasonable demands on the
ground of their still remaining quasi-sovereign interests"
36.
Therefore, conceptually and from the jurisprudential point of view, especially
in the background of the Preamble to the Constitution of India and the mandate
of the Directive Principles, it was possible to authorise the Central
Government to take over the claims of the victims to tight against the
multinational Corporation in respect of the claims. Because of the situation the
victims were under disability in pursuing their claims in the circumstances of
the situation fully and properly. On its plain terms the State has taken over
the exclusive right to represent and act in place of every person who has made
or is entitled to make a claim for all purposes connected with such claim in
the same manner and to the same effect as such person.
Whether
such provision is valid or not in the background of the requirement of the
Constitution and the Code of Civil Procedure, is another debate. But there is
no prohibition or inhibition, in our opinion, conceptually or jurisprudentially
for Indian State taking over the claims of the victims or for the State
acting for the victims as the Act has sought to provide. The actual meaning of
what the Act has provided and the validity thereof, however, will have to be
examined in the light of the specific submissions advanced in this case.
641
37.
Ms. Indira Jaising as mentioned hereinbefore on behalf of some other victims
drew out attention to the background of the passing of the Act in question. She
drew our attention to the fact that the Act was to meet a specific situation
that had arisen after the tragic disaster and the advent of American lawyers
seeking to represent the victims in American courts. The Government's view,
according to her, as was manifest from the Statement of Objects and Reasons,
debates of the Parliament, etc. was that the interests of the victims would be
best served if the Central Government was given the right to represent the
victims in the courts of United States as they would otherwise be exploited by
'ambulance-chasers' working on contingency fees. The Government also proceeded
initially on the hypothesis that US was the most convenient forum in which to
sue UCC. The Government however feared that it might not have locus standi to
represent the victims in the courts of the United States of America unless a law was passed to enable it to sue on
behalf of the victims. The dominant object of the Act, therefore, according to
her, was to give to the Government of India locus Standi to sue on behalf of
the victims in foreign jurisdiction, a standing which it otherwise would not
have had. According to her, the Act was never intended to give exclusive rights
to the Central Government to sue on behalf of the victims in India or abroad. She drew our attention
to the parliamentary debates as mentioned hereinbefore. She drew our attention
to the expression 'parens patriae' as appearing in the Words and Phrases,
Volume 31 p. 99. She contends that the Act was passed to provide locus standi
only to represent in America. She drew our attention to the
"American Constitutional Law by Laurence B. Trioe, 1978 Edition at
paragraph 3.24, where it was stated that in its capacity as proprietor, a state
may satisfy the requirement of injury to its own interests by an assertion of
harm to the state as such. It was further stated by the learned author there
that the State may sue under the federal anti-trust laws to redress wrongs
suffered by it as the owner of a railroad and as the owner and operator of
various public institutions. It was emphasised that in its quasi-sovereign
capacity, the state has an interest, independent of and behind the titles of
its citizens, in all the earth and air within its domain. It was sought to be
suggested that in the instant Act no such right was either asserted or
mentioned. The State also in its quasi-sovereign capacity is entitled to bring
suit against a private individual to enjoin a corporation not to discharge noxious
gases from its out of state plant into the suing state's territory. Finally, it
was emphasised that as 'parens patriae' on behalf of the citizens, where a
state's capacity as parens patriae is not negated by the federal structure, the
protection of the general health, comfort, and welfare of the state's
inhabitants has been held to give the state itself a sufficient 642 interest.
Ms. Jaising sought to contend that to the extent that the Act was not confined
to empowering the Government to sue on behalf of those who were not sui generis
but extended also to representing those who are, this exercise of the power
cannot be referrable to the doctrine of 'parens patriae'. To the extent, it is
not confined in enabling the Government to represent its citizens in foreign
jurisdiction but empowered it to sue in local courts to the exclusion of the
victims it cannot be said to be in exercise of doctrine of 'parens patriae',
according to her. We are unable to agree. As we have indicated before
conceptually and jurisprudentially there is no warrant in the background of the
present Act, in the light of circumstances of the Act in question to confine
the concept into such narrow field. The concept can be varied to enable the
Government to represent the victims effectively in domestic forum if.the
situation so warrants. We also do not find any reason to confine the 'parens
patriae' doctrine to only quasisovereign right of the State independent of and
behind the title of the citizens, as we shall indicate later.
38. It
was further contended that deprivation of the rights of the victims and denial
of the rights of the victims or the fights of the heirs of the victims to
access to justice was unwarranted and unconstitutional. She submitted that it
has been asserted by the Government that the Act was passed pursuant to Entry
13 of the List I of the Seventh Schedule to the Constitution. It was therefore
submitted that to the extent it was a law relating to civil procedure, it sets
up a different procedure for the Bhopal gas victims and denies to them equality
before law, violating Article 14 of the Constitution. Even assuming that due to
the magnitude of the disaster, the number of claimants and their disability
they constituted a separate class and that it was permissible to enact a
special legislation setting up a special procedure for them, the reasonableness
of the procedure has still to be tested. Its reasonableness, according to her,
will have to be judged on the touchstone of the existing Civil Procedure Code
of 1908 and when so tested, it is found wanting in several respects. It was
also contended by the Government that it was a legislation relating to
"actionable wrongs" under Entry 8 of the Concurrent List of the
Seventh Schedule. But so read, she said, it could only deal with the procedural
aspects and not the substantive aspect of "actionable wrongs". If it
does, then the reasonableness of a law must be judged with reference to the
existing substantive law of actionable wrongs and so judged it is in violation
of many constitutional rights as it takes away from the victims the right to
sue for actionable wrongs according to counsel for the victims. According to
her, it fails to take into account the law of strict liability for ultra 643
hazardous activity as clarified by this Court in M.C. Mehta's, case (supra).
She further submitted that it is a bad Act as it fails to provide for the right
to punitive damages and destruction of environment.
39. It
was contended on behalf of the Central Government that the Act was passed to
give effect to the Directive Principle as enshrined under Article 39-A of the
Constitution of India. It was, on the other side, submitted that it is not
permissible for the State to grant legal aid on pain of destroying rights that
inhere in citizens or on pain of demanding that the citizens surrender their
rights to the State. The Act in fact demands a surrender of rights of the
citizens to the State. On the interpretation of the Act, Ms. Indira Jaising
submitted that sections 3 and 4 as noted above, give exclusive power to the
Government to represent the victims and there is deprivation of the victims'
right to sue for the wrongs done to them which is uncanalised and unguided and
the expression "due regard" in section 4 of the Act does not imply
consent and as such violative of the rights of the victims. The right to be
associated with the conduct of the suit is hedged in with so many conditions
that it is illusory. According to her, a combined reading of sections 3 and 4
of the act lead to the conclusion that the victims are displaced by the Central
Government which has constituted itself as the "surrogate" of the
claimants, that they have no control over the proceedings, that they have no
right to decide whether or not to compromise and if so on what terms and they
have no right to be heard by the court before any such compromise is effected.
Therefore, section 3 read with section 4, according to her, hands over to the
Government all effective rights of the victims to sue and is a naked usurption
of power. It was submitted that in any event on a plain reading of the Act,
section 3 read with section 4 did not grant the Government immunity from being
sued as a joint tort-feasor.
40. It
was further urged that section 9 makes the Government the total arbitor in the
matter of the registration, processing and recording of claims. Reference was
made to section 9(2)(a), (b) and (c) and disbursal of claims under sections
9(2)(f) and 10. It was urged that the Deputy Commissioner and Commissioner
appointed under the Act and the Scheme are subordinates and agents of the
Central Government. They replace impartial and independent civil court by
officers and subordinates of the Central Government. Clause 11 of the Scheme
makes the Central Government, according to counsel, judge in its own cause
inasmuch as the Central Government could be and was in fact a joint
tort-feasor. It was submitted that sections 5 to 9 of the Act read with the
Scheme do not set up a machinery which is 644 constitutionally valid. The Act,
it was urged, deprives the victims of their rights out of all proportion to the
object sought to be achieved, namely, to sue in foreign jurisdiction or to
represent those incapable of representing themselves. The said object could be
achieved, according to counsel, by limiting the right to sue in foreign
jurisdiction alone and in any event representing only those victims incapable
of representing themselves. The victims who wish to sue for and on their own
behalf must have power to sue, all proper and necessary parties including
Government of India, Government of Madhya Pradesh, UCIL and Shri Arjun Singh to
vindicate their right to life and liberty and their rights cannot and should
not be curtailed, it was submitted.
Hence,
the Act goes well beyond its objects and imposes excessive restriction
amounting to destruction of the rights of the victims, according to. counsel.
In deciding whether any rights are affected, it is not the object of the Act
that is relevant but its direct and inevitable effect on the rights of the
victims that is material. Hence no matter how laudable the object of the Act is
alleged to be by the Government of India, namely, that it is an Act to give
effect to Directive Principles enshrined in Article 39-A of the Constitution,
the direct and inevitable effect of section 3 according to counsel for the
victims is to deprive the victims of the right to sue for and on their own
behalf through counsel of their choice and instead empower the Central
Government to sue for them.
41.
The Act is, it was contended, unconstitutional because it deprives the victims
of their right to life and personal liberty guaranteed by Article 21. The right
to life and liberty includes the right to sue for violations of the right, it
was urged. The right to life guaranteed by Article 21 must be interpreted to
mean all that makes life livable, life in all its fullness. According to
counsel, it includes the right to livelihood. Reference was made to the
decision of Olga Tellis v. B.M.C., [1985] Supp. 2 SCR 51 at p. 78-83.
This
right, it was contended, is inseparable from the remedy. It was urged that
personal liberty includes a wide range of freedoms to decide how to order one's
affairs. Reference was made to Maneka Gandhi v. Union of India, (supra), The
right to life and liberty also includes the right to healthy environment free
from hazardous pollutants. The right to life and liberty, it was submitted, is
inseparable from the remedy to judicial vindication of the violation of that
right--the right of access to justice must be deemed to be part of that right.
Therefore, the importance is given to the right to file a suit for an
actionable wrong. See Ganga Bai v. Vijay Kumar, [1974] 3 SCR
882 at 886. According to counsel appearing for the victims, the Act read
strictly infringes the right to life and personal liberty because the right to
sue by the affected person 645 for damages flowing from infringement of their
rights is taken away. Thus, it was submitted that not just some incidents of
the right to life, but the right itself in all its fullness is taken away. Such
depravation, according to counsel, of the right is not in accordance with
procedure established by law inasmuch as the law which takes away the right,
i.e., impugned Act is neither substantively nor procedurally just, fair or
reasonable. A law which divests the victims of the right to sue to vindicate
for life and personal liberty and vests the said right in the Central
Government is not just, fair or reasonable. The victims are sui generis and
able to decide for themselves how to vindicate their claims in accordance with
law. There is, therefore, no reason shown to exist for divesting them of that
right and vesting that on the Central Government.
42.
All the counsel for the victims have emphasised that vesting of the right in
Central Government is bad and unreasonable because there is conflict of
interests between the Central Government and the victims. It was emphasised
that the conflict of interest has already prejudiced the victims in the conduct
of the case inasmuch as a compromise unacceptable to the victims has been
entered into in accordance with the order of this Court of 14th/15th February,
1989 without heating the victims. This conflict of interest will continue, it
was emphasised, to adversely affect the victims inasmuch as section 9 of the
Act read with clauses 5, 10 and 11 of the Scheme empower the Central Government
to process claims, determine the category into which these fall, determine the
basis on which damages will be payable to each category and determine the
amount of compensation payable to each claimant. Learned counsel urged that the
right to a just, fair and reasonable procedure was itself a guaranteed
fundamental right under Article 14 of the Constitution. This included right to
natural justice. Reference was made to Olga Tellis's. case (supra) and S.L.
Kapoor v. Jagmohan, [1981] 1 SCR 746 at 753, 766. The right to natural justice
is included in Article 14 Tulsi Ram v. Union of India, [1985] Supp. 2 SCR 131.
Reference was also made to Maneka Gandhi's, case (supra). It was contended by
counsel that the right to natural justice is the right to be heard by Court at
the pre-decisional stage, i.e., before any compromise is effected and accepted.
Reference was made to the decision of this Court in Swadeshi Cotton v. Union of
India, [1981] 2 SCR 533. It was submitted that natural justice is a highly
effective tool devised by the Courts to ensure that a statutory authority
arrives at a just decision. It is calculated to act as a healthy check on the abuse
of power. Natural justice is not dispensable nor is it an empty formality.
Denial
of that right can and has led to the miscar646 riage of justice in this case.
According to counsel, if the victims had been given an opportunity to be heard,
they would, inter alia, have pointed out that the amount agreed to be paid by
UCC was hopelessly inadequate and that UCC, its officer and agents ought not to
be absolved of criminal liability, that the Central Government itself was
liable to have been sued as a joint tort-feasor and, according to counsel, had
agreed to submit to a decree if found liable under the order dated 31st
December, 1985, that suits had been filed against the State of Madhya Pradesh,
Shri Arjun Singh and UCIL which said suits cannot be deemed to have been
settled by the compromise/order of 14th/15th February, 1989. It was also
pointed out that Union of India was under a duty to sue UCIL, which it had
failed and neglected to do.
It was
submitted that to the extent that the statute does not provide for a
pre-decisional hearing on the fairness of the proposed settlement or compromise
by Court, it is void as offending natural justice hence violative of Articles
14 and 21 of the Constitution. Alternatively, it was contended by the counsel
that since the statute neither expressly nor by necessary implication bars the
right to be heard by Court before any compromise is effected such a right to a
predecisional hearing by Court must be read into section 3(2)(b) of the Act.
Admittedly, it does not expressly exclude the right to a hearing by Court prior
to any settlement being entered into. Far from excluding such a right by
necessary implication, having regard to the nature of the rights affected,
i.e., the right to life and personal liberty, such a right to hearing must be
read into the Act in order to ensure that justice is done to the victims,
according to all the counsel. The Act sets up a procedure different from the
ordinary procedure established by law, namely, Civil Procedure Code. But it was
submitted that the Act should be harmoniously read with the provisions of Civil
Procedure Code and if it is not so read, then the Act in question would be
unreasonable and unfair. In this connection, reliance was placed on the
provisions of Order I, Rule 4, Order 23, Rule 1 proviso, Order 23, Rule 3-9 and
Order 32, Rule 7 of CPC and it was submitted that these are not inconsistent
with the Act. On the contrary these are necessary and complementary, intended
to ensure that there is no miscarriage of justice. Hence these must be held to
apply to the facts and circumstances of the case and the impugned Act must be
read along with these provisions. Assuming that the said provisions do not
directly apply then, provisions analogous to the said provisions must be read with
section 3(2)(b) to make the Act reasonable, it was submitted. It was urged that
if these are not so read then the absence of such provisions would vest
arbitrary and unguided powers in the Central Government making section 3(2)(b)
unconstitutional.
The said
provisions are intended to ensure the machinery of 647 accountability to the
victims and to provide to them, an opportunity to be heard by court before any
compromise is arrived at. In this connection, reference was made to Rule 23(3)
of the Federal Rules of Civil Procedure in America which provides for a hearing to the victims before a compromise is effected.
The victims as plaintiffs in an Indian court cannot be subjected to a procedure
which is less fair than that provided by a US
forum initially chosen by the Government of India, it was urged.
43.
Counsel submitted that Section 6 of the Act is unreasonable because it replaces
an independent and impartial Civil Court of competent jurisdiction by an
Officer known as the Commissioner to be appointed by the Central Government. No
qualification, according to counsel, had been prescribed for the appointment of
a Commissioner and clause 5 of the Scheme framed under the Act vests in the
Commissioner the judicial function of deciding appeals against the order of the
Deputy Commissioner registering or refusing to register a claim. It was further
submitted that clause 11(2) of the Scheme is unreasonable because it replaces
an independent and impartial civil court of competent jurisdiction with the
Central Government, which is a joint tort-feasor for the purpose of determining
the total amount of compensation to be apportioned for each category of claims
and the quantum of compensation payable for each type of injury or loss. It was
submitted that the said function is a judicial function and if there is any
conflict of interest between the victims and Central Government, vesting such a
power in the Central Government amounts to making it a judge in its own cause.
It was urged that having regard to the fact that amount received in
satisfaction of the claims is ostensibly pre-determined, namely, 470 million
dollars unless the order of 14th/15th February is set aside which ought to be
done, according to counsel, the Central Government would have a vested interest
in ensuring that the amount of damages to be disbursed does not exceed the said
amount. Even otherwise, according to counsel, the Government of India has been
sued as a joint tort-feasor, and as they would have a vested interest in
depressing the quantum of damages, payable to the victims. This would,
according to counsel, result in a deliberate under-estimation of the extent of
injuries and compensation payable.
44.
Clause 11(4) of the Scheme, according to counsel, is unreasonable inasmuch as
it does not take into account the claims of the victims to punitive and
exemplary damages and damages for loss and destruction of environment. Counsel
submitted that in any event the expression "claims" in section 2(b)
cannot be interpreted to mean 648 claims against the Central Government, the
State of Madhya Pradesh, UCIL, which was not sued in suit No. 1113/86 and Shri
Arjun Singh, all of whom have been sued as joint tort feasors in relation to
the liability arising out of the disaster. Counsel submitted that if section 3
is to be held to be intra vires, the word "exclusive" should be
severed from section 3 and on the other hand, if section 3 is held ultra vires,
then victims who have already filed suits or those who had lodged claims should
be entitled to continue their own suits as well as Suit No. 1113/86 as
plaintiffs with leave under Order 1 Rule 8. Counsel submitted that interim
relief as decided by this Court can be paid to the victims even otherwise also,
according to counsel, under clause 10(2)(b) of the Scheme.
45.
Counsel submitted that the balance of $ 470 million after deducting interim
relief as determined by this Court should be attached. In any event, it was
submitted that, it be declared that the word "claim" in section 2
does not include claims against Central Govt. or State of Madhya Pradesh or UCIL. Hence, it was urged that
the rights of the victims to sue the Government of India, the State of Madhya Pradesh or UCIL would remain unaffected by
the Act or by the compromise effected under the Act. Machinery to decide suit
expeditiously has to be devised, it was submitted. Other suits filed against
UCC, UCIL, State of Madhya
Pradesh and Arjun
Singh should to be transferred to the Supreme Court for trial and disposal,
according to counsel. It was submitted that the Court should fix the basis of
damages payable to different categories, namely, death and disablement
mentioned under clause 5(2) of the scheme. Counsel submitted that this Court
should set up a procedure which would ensure that an impartial judge assisted
by medical experts and assessors would adjudicate the basis on which an
individual claimant would fall into a particular category. It was also urged
that this Court should quantify the amount of compensation payable to each
category of claimant in clause 5(2) of the Scheme. This decision cannot, it was
submitted, be left to the Central Government as is purported to be done by
clause 11(2) of the Scheme.
This
Court must set up, it was urged, a trust with independent trustees to
administer the trust and trustees to be accountable to this Court. An
independent census should be carried out of number of claimants, nature and
extent of injury caused to them, the category into which they fall.
Apportionment
of amounts should be set aside or invested for future claimants, that is the
category in clause 5(2)(a) of the Scheme, which is, according to counsel, of
utmost importance 649 since the injuries are said to be. carcinogenic and
ontogenic and wide affecting persons yet unborn.
47.
Shri Garg, further and on behalf of some of the victims counsel, urged before
us that deprivation of the rights of the victims and vesting of those fights in
the State is violative of the rights of the victims and cannot.
be
justified or warranted by the Constitution. Neither section 3 nor section 4 of
the Act gives any right to the victims; on the other hand, it is a complete
denial of access to justice for the victims, according to him. This, according
to counsel, is arbitrary. He also submitted that section 4 of the Act, as it
stands, gives no right to the victims and as such even assuming that in order
to fight for the rights of the victims, it was necessary to substitute the
victims even then in so far as the victims have been denied the right of say,
in the conduct of the proceedings, this is disproportionate to the benefit
conferred upon the victims. Denial of rights to the victims is so great and
deprivation of the right to natural justice and access to justice is so
tremendous that judged by the well settled principles by which yardsticks
provisions like these should be judged in the constitutional framework of this
country, the Act is violative of the fundamental rights of the victims. It was
further submitted by him that all the rights of the victims by the process of this
Act, the right of the victims to enforce full liability against the
multinationals as well as against the Indian Companies, absolute liability and
criminal liability have all been curtailed.
48.
All the counsel submitted that in any event, the criminal liability cannot be
subject matter of this Act.
Therefore,
the Government was not entitled to agree to any settlement on the ground that
criminal prosecution would be withdrawn and this being a part of the
consideration or inducement for settling the civil liability, he submitted that
the settlement arrived at on the 14th/l5th February, 1989 as recorded in the
order of this Court is wholly unwarranted, unconstitutional and illegal.
49.
Mr. Garg additionally further urged that by the procedure of the Act, each
individual claim had to be first determined and the Government could only take
over the aggregate of all individual claims and that could only be done by
aggregating the individual claims of the victims.
That
was not done, according to him. Read in that fashion, according to Shri Garg,
the conduct of the Government in implementing the Act is wholly improper and
unwarranted. It was submitted by him that the enforcement of the fight of the
victims 650 without a just, fair and reasonable procedure which is vitally
necessary for representing the citizens or victims was bad. It was further
urged by him that the Bhopal gas victims have been singled out
for hostile discrimination resulting in total denial of all procedures of
approach to competent courts and tribunals. It was submitted that the Central
Government was incompetent to represent the victims in the litigations or for
enforcement of the claims. It was then submitted by him that the claims of the
victims must be enforced fully against the Union Carbide Corporation carrying
on commercial activities for profit resulting in unprecedented gas leak
disaster responsible for a large number of deaths and severe injuries to
others. It was submitted that the liability of each party responsible,
including the Government of India, which is a joint tort-feasor along with the
Union Carbide, has to be ascertained in appropriate proceedings. It was
submitted on behalf of the victims that Union of India owned 22% of the shares
in Union Carbide and therefore, it was incompetent to represent the victims.
There
was conflict of interest between the Union of India and the Union Carbide and
so Central Government was incompetent. It is submitted that pecuniary interest
howsoever small disqualifies a person to be a judge in his own cause.
The
settlement accepted by the Union of India, according to various counsel is
vitiated by the pecuniary bias as holders of its shares to the extent of 22%.
50. It
was submitted that the pleadings in the court of the United States and in the
Bhopal court considered in the context of the settlement order of this Court
accepted by the Union of India establish that the victims' individuality were
sacrificed wontedly and callously and, therefore, there was violation,
according to some of the victims, both in the Act and in its implementation of
Articles 14, 19(l)(g) and 21 of the Constitution.
51.
The principles of the decision of this Court in M.C. Mehta & Anr. v. Union
of India, [1987] 1 SCR 819 must be so interpreted that complete justice is done
and it in no way excludes the grant of punitive damages for wrongs justifying
deterrents to ensure the safety of citizens in free India.
No
multinational corporation, according to Shri Garg, can claim the privilege of
the protection of Indian law to earn profits without meeting fully the demands
of civil and criminal justice administered in India with this Court functioning as the custodian. Shri Garg
urged that the liability for damages, in India and the Third World Countries, of the multinational companies cannot be
less but must be more because the persons affected are often without remedy for
651 reasons of inadequate facilities for protection of health or property.
Therefore, the damages sustainable by Indian victims against the multinationals
dealing with dangerous gases without proper security and other measures are far
greater than damages suffered by the citizens of other advanced and developed
countries. It is, therefore, necessary to ensure by damages and deterrent
remedies that these multinationals are not tempted to shift dangerous
manufacturing operations intended to advance their strategic objectives of
profit and war to the Third World Countries with little respect for the right
to life and dignity of the people of sovereign third world countries. The
strictest enforcement of punitive liability also serves the interest of the
American people. The Act, therefore, according to Shri Garg is clearly
unconstitutional and therefore, void.
52. It
was urged that the settlement is without jurisdiction. This Court was
incompetent to grant immunity against criminal liabilities in the manner it has
purported to do by its order dated 14th/l5th February, 1989, it was strenuously
suggested by counsel. It was further submitted that to hold the Act to be valid,
the victims must be heard before the settlement and the Act can only be valid
if it is so interpreted. This is necessary further, according to Shri Garg, to
lay down the scope of heating. Shri Garg also drew our attention to the scheme
of disbursement of relief to the victims. He submitted that the scheme of
disbursement is unreasonable and discriminatory because there is no procedure
which is just, fair and reasonable in accordance with the provisions of Civil
Procedure Code. He further submitted that the Act does not lay down any
guidelines for the conduct of the Union of India in advancing the claims of the
victims. There were no essential legislative guidelines for determining the
rights of the victims, the conduct of the proceedings on behalf of the victims
and for the reliefclaimed. Denial of access to justice to the victims through
an impartial judiciary is so great a denial that it can only be consistent with
the situation which calls for such a drastic provision. The present
circumstances were not such.
He
drew our attention to the decision of this Court in Basheshar v. Income Tax
Commissioner, AIR 1959 SC 149; in Re Special Courts Bill, [1979] 2 SCR 476;
A.R. Antulay v. R.S. Nayak & Anr., [1988] 2 SCC 602; Ram Krishna Dalmia v. Tendulkar, [1955] SCR
279; Ambika Prasad Mishra etc. v. State of U.P. & Ors. etc., [1960] 3 SCR
1159 and Bodhan Chowdhary v. State of Bihar, [1955] 1 SCR 1045. Shri Garg further submitted that Article 21 must be
read with Article 51 of the Constitution and other directive principles. He
drew our attention to Lakshmi Kant Pandey v. Union of India, [1984] 2 SCR 795;
M/s Mackinnon Machkenzie & Co. Ltd. v. Audrey D'Costa 652 and Anr., [1987]
2 SCC 469; Sheela Barse v. Secretary, Children Aid Society & Ors., [1987] 1
SCR 870. Shri Garg submitted that in india, the national dimensions of human
rights and the international dimensions are both congruent and their
enforcement is guaranteed under Articles 32 and 226 to the extent these are
enforceable against the State, these are also enforceable against transnational
corporations inducted by the State on conditions of due observance of the
Constitution and all laws of the land. Shri Garg submitted that in the
background of an unprecedented disaster resulting in extensive damage to life
and property and the destruction of the environment affecting large number of
people and for the full protection of the interest of the victims and for
complete satisfaction of all claims for compensation, the Act was passed
empowering the Government of India to take necessary steps for processing of
the claims and for utilisation of disbursal of the amount received in
satisfaction of the claims. The Central Government was given the exclusive
right to represent the victims and to act in place of, in United States or in india, every citizen entitled to make a
claim. Shri Garg urged that on a proper reading of section 3(1) of the Act read
with section 4 exclusion of all victims for all purpose is incomplete and the
Act is bad. He submitted that the decree for adjudication of the Court must
ascertain the magnitude of the damages and should be able to grant reliefs
required by law under heads of strict liability, absolute liability and
punitive liability.
53.
Shri Garg submitted that it is necessary to consider that the Union of India is
liable for the torts. In several decisions to which Shri Garg grew our
attention, it has been clarified that Government is not liable only if the
tortious act complained has been committed by its servants in exercise of its sovereign
powers bY which it is meant powers that can be lawfully exercised under
sovereign rights only vide Nandram Heeralal v. Union of India & Anr., AIR
1978 M.P. 209 at p. 212. There is a real and marked distinction between the
sovereign functions of the government and those which are non-sovereign and
some of the functions that fall in the latter category are those connected with
trade, commerce, business and industrial undertakings. Sovereign functions are
such acts which are of such a nature as cannot be performed by a private
individual or association unless powers are delegated by sovereign authority of
state.
54.
According to Shri Garg, the Union and the
State Governments under the Constitution and as per laws of the Factories,
Environment Control, etc. are bound to exercise control on the factories in
public interest and public purpose. These functions are not sovereign func653
tions, according to Shri Garg, and the Government in this case was guilty of
negligence. In support of this, Shri Garg submitted that the offence of
negligence on the part of the Govt. would be evident from the fact that-(a) the
Government allowed the Union Carbide factory to be installed in the heart of
the city;
(b) the
Government allowed habitation in the front of the factory knowing that the most
dangerous and lethal gases were being used in the manufacturing processes;
(c) the
gas leakage from this factory was a common affair and it was agitated
continuously by the people journalists and it was agitated in the Vidhan Sabha
right from 1980 to 1984.
These
features firmly proved, according to Shri Garg, the grossest negligence of the
governments. Shri Garg submitted that the gas victims had legal and moral right
to sue the governments and so it had full right to implead all the necessary
and proper parties like Union Carbide, UCIL, and also the then Chief Minister
Shri Arjun Singh of the State.
He
drew our attention to Order 2, rule 3, of the Civil Procedure Code. In suits on
joint torts, according to Shri Garg, each of the joint tort feasors is
responsible for the injury sustained for the common acts and they can all be
sued together. Shri Garg's main criticism has been that the most crucial
question of corporate responsibility of the people's right to life and their
right to guard it as enshrined in Article 21 of the Constitution were sought to
be gagged by the Act. Shri Garg tried to submit that this was an enabling Act
only but not an Act which deprived the victims of their right to sue. He
submitted that in this Act, there is denial of natural justice both in the
institution under section 3 and in the conduct of the suit under section 4. It
must be seen that justice is done to all (R. Viswanathan v. Rukh-ul-Mulk Syed
Abdul Wajid, [1963] 3 SCR 22). It was urged that it was necessary to give a
reasonable notice to the parties. He referred to M. Narayanan Nambiar v. State
of Kerala, [1963] Supp. 2 SCR 724.
55.
Shri Shanti Bhushan appearing for Bhopal Gas Peedit Mahila Udyog Sangathan
submitted that if the Act is to be upheld, it has to be read down and construed
in the manner urged by him. It was submitted that when the Bhopal Gas disaster
took place, which was the worst industrial disaster in the world which resulted
in the deaths 654 of several thousands of people and caused serious injuries to
lakhs others, there arose a right to the victims to get not merely damages
under the law of the torts but also arose clearly, by virtue of right to life
guaranteed as fundamental right by Article 21 of the Constitution a right to get
full protection of life and limb. This fundamental right also, according to
Shri Shanti Bhushan, embodied within itself a right to have the claim
adjudicated by the established courts of law. It is well settled that right of
access to courts in respect of violation of their fundamental rights itself is
a fundamental right which cannot be denied to the people. Shri Shanti Bhushan
submitted that there may be some justification for the Act being passed. He
said that the claim against the Union Carbide are covered by the Act. The claims
of the victims against the Central Government or any other party who is also
liable under tort to the victims is not covered by the Act. The second point
that Shri Shanti Bhushan made was that the Act so far as it empowered the Central
Government to represent and act in place of the victims is in respect of the
civil liability arising out of disaster and not in respect of any right in
respect of criminal liability. The Central Govt., according to Shri Shanti
Bhushan, cannot have any right or authority in relation to any offences which
arose out of the disaster and which resulted in criminal liability. It was
submitted that there cannot be any settlement or compromise in relation to
non-compoundable criminal cases and in respect of compoundable criminal cases
the legal right to compound these could only be possessed by the victims alone
and the Central Government could not compound those offences on their behalf.
It was submitted by Shri Shanti Bhushan that even this Court has no jurisdiction
whatsoever to transfer any criminal proceedings to itself either under any
provision of the Constitution or under any provision of the Criminal Procedure
Code or under any other provision of law and, therefore, if the settlement in
question was to be treated not as a compromise but as an order of the Court, it
would be without jurisdiction and liable to be declared so on the principles
laid down, according to Shri Bhushan, by this Court in Antulay's case (supra).
Shri Shanti Bhushan submitted that even if under the Act, the Central
Government is considered to be able to represent the victims and to pursue the
litigation on their behalf and even to enter into compromise on their behalf,
it would be a gross violation of the constitutional rights of the victims to
enter into a settlement with the Union Carbide without giving the victims
opportunities to express their views about the fairness or adequacy of the
settlement before any court could permit such a settlement to be made.
56.
Mr. Shanti Bhushan submitted that the suit which may be 655 brought by the
Central Government against Union Carbide under section 3 of the Act would be a
suit of the kind contemplated by the Explanation to Order 23, rule 3 of the
Code of Civil Procedure since the victims are not parties and yet the decree
obtained in the suit would bind them. It was, therefore, urged by Shri Shanti
Bhushan that the provisions of Section 3(1) of the Act merely empowers the
Central Government to enter into a compromise but did not lay down the
procedure which was to be followed for entering into any compromise. Therefore,
there is nothing which is inconsistent with the provisions of Order 23 Rule 3-B
of the CPC to which the provisions Section 11 of the Act be applied. If,
however, by any stretch of argument the provisions of the Act could be
construed so as to override the provisions of Order 23 Rule 3-B CPC, it was
urged, the same would render the provisions of the Act violative of the
victims' fundamental rights and the actions would be rendered unconstitutional.
If it empowered the Central Government to compromise the victims' rights,
without even having to apply the principles of natural justice, then it would
be unconstitutional and as such bad. Mr. Shanti Bhushan, Ms. Jaising and Mr. Garg
submitted that these procedures must be construed in accordance with the
provisions contained in Order 23 Rule 3-B CPC and an opportunity must be given
to those whose claims are being compromised to show to the court that the
compromise is not fair and should not accordingly be permitted by the court.
Such a hearing in terms, according to counsel, of Order 23 Rule 3-B CPC has to
be before the compromise is entered into. It was then submitted that section 3
of the Act only empowers the Central Government to represent and act in place
of the victims and to institute suits on behalf of the victims or even to enter
into compromise on behalf of the victims.
57.
The Act does not create new causes of action create special courts. The
jurisdiction of the civil court to entertain suit would still arise out of
section 9 of the CPC and the substantive cause of action and the nature of the
reliefs available would also continue to remain unchanged.
The
only difference produced by the provisions of the Act would be that instead of
the suit being filed by the victims themselves the suit would be filed by the
Central Government on their behalf.
58.
Shri Shanti Bhushan then argued that the cause of action of each victim is
separate and entitled him to bring a suit for separate amount according to the
damages suffered by him. He submitted that even where the Central Government
was empowered to file suits on behalf of all the victims it could only ask for
a decree of the same kind as could have been asked for by the victims themselves,
namely, a 656 decree awarding various specified amounts to different victims
whose names had to be disclosed. According to Shri Shanti Bhushan, even if all
the details were not available at the time when the suit was filed, the details
of the victims' damages had to be procured and specified in the plaint before a
proper decree could be passed in the suit.
even
if the subject matter of the suit had to be compromised between the Central
Government and the Union Carbide the compromise had to indicate as to what
amount would be payable to each victim, in addition to the total amount which
was payable by Union Carbide, submitted Shri Shanti Bhushan.
It was
submitted that there was nothing in the Act which permitted the Central
Government to enter into any general compromise with Union Carbide providing
for the lumpsum amount without disclosure as to how much amount is payable to
each victim.
59. If
the Act in question had not been enacted, the victims would have been entitled
to not only sue Union Carbide themselves but also to enter into any compromise
or settlement of their claims with the Union Carbide immediately. The
provisions of the Act, according to Mr. Shanti Bhushan, deprive the victims of
their legal right and such deprivation of their rights and creation of a
corresponding right in the Central Government can be treated as reasonable only
if the deprivation of their rights imposed a corresponding liability on the
Central Government to continue to pay such interim relief to the victims as they
might be entitled to till the time that the Central Government is able to
obtain the whole amount of compensation from the Union Carbide. He submitted
that the deprivation of the right of the victims to sue for their claims and
denial of access to justice and to assert their claims and the substitution of
the Central Government to carry on the litigation for or on their behalf can
only be justified, if and only if the Central Government is enjoined to provide
for such interim relief or continue to provide in the words of Judge Keenan, as
a matter of fundamental human decency, such interim relief, necessary to enable
the victims to fight the battle. Counsel submitted that the Act must be so
read. Shri Shanti Bhushan urged that if the Act is construed in such a manner
that it did not create such an obligation on the Central Government, the Act
cannot be upheld as a reasonable provision when it deprived the victims of
their normal legal rights of immediately obtaining compensation from Union
Carbide. He referred to section 10(b) of the Act and clause 10 and 11(1) of the
Scheme to show that the legislative policy underlying the Bhopal Act clearly
contemplated payment of interim relief to the victims from time to time till
such time as the Central Government was able to recover from Union Carbide 657
full amount of compensation from which the interim reliefs paid by the Central
Government were to be deducted from the amount payable to them by way of final
disbursal of the amounts recovered.
60.
The settlement is bad, according to Shri Shanti Bhushan if part of the bargain
was giving up of the criminal liability against UCIL and UCC. Shri Shanti
Bhushan submitted that this Court should not hesitate to declare that the
settlement is bad because the fight will go on and the victims should be
provided reliefs and interim compensation by the Central Government to be
reimbursed ultimately from the amount to be realised by the Central Government.
This obligation was over and above the liability of the Central Government as a
joint tort-feasor, according to Shri Shanti Bhushan.
61.
Shri Kailash Vasdev, appearing for the petitioners in Writ Petition No. 155
1/86 submitted that the Act displaced the claimants in the matter of their
right to seek redressal and remedies of the actual injury and harm caused
individually to the claimants. The Act in question by replacing the Central
Government in place of the victims. by conferment of exclusive right to sue in
place of victims, according to him, contravened the procedure established by
law. The right to sue for the wrong done to an individual was exclusive to the
individual. It was submitted that under the civil law of the country,
individuals have rights to enforce their claims and any deprivation would place
them into a different category from the other litigants. The right to enter
into compromise, it was further submitted, without consultation of the victims,
if that is the construction of section 3 read with section 4 of the Act, then
it is violative of procedure established by law. The procedure substituted, if
that be the construction of the Act, would be in violation of the principles of
natural justice and as such bad. It was submitted that the concept of 'parens
patriae' would not be applicable in these cases. It was submitted that
traditionally, sovereigns can sue under the doctrine of 'parens patriae' only
for violations of their "quasi-sovereign" interests. Such interests
do not include the claims of individual citizens. It was submitted that the Act
in question is different from the concept of parens patriae because there was
no special need to be satisfied and a class action, according to Shri Vasdev,
would have served the same purpose as a suit brought under the statute and
ought to have been preferred because it safeguarded claimants' right to
procedural due process. In addition, a suit brought under the statute would
threaten the victims' substantive due process rights. It was further submitted
that in order to sustain an action, it was necessary for the Government of
India to have standing 658
62.
Counsel submitted that 'parens patriae' has received no judicial recognition in
this country as a basis for recovery of money damages for injuries suffered by
individuals. He may be right to that extent but the doctrine of parens patriae
has been used in India in varying contexts and
contingencies.
63. We
are of the opinion that the Act in question was passed in recognition of the
right of the sovereign to act as parens patriae as contended by the learned
Attorney General. The Government of India in order to effectively safeguard the
rights of the victims in the matter of the conduct of the case was entitled to
act as parens patriae, which position was reinforced by the statutory
provisions, namely, the Act. We have noted the several decisions referred to
hereinbefore, namely, Bhudhkaran Chankhani v. Thakur Prasad Shad, (supra);
Banku Behary Mondal v. Banku Behari Hazra, (supra); Medai Dalavoi T.
Kumaraswami Mudaliar v. Medai Dalavai Rajammal, (supra) and to the decision of this
Court in Mahant Ram Saroop Dasji v. S.P. Sahi, (supra) and the decision of the
American Supreme Court in Alfred Schnapp v. Puerto Rico, (supra). It has to be
borne in mind that conceptually and jurisprudentially, the doctrine of parens
patriae is not limited to representation of some of the victims outside the
territories of the country. It is true that the doctrine has been so utilised
in America so far. In our opinion, learned
Attorney General was right in contending that where citizens of a country are
victims of a tragedy because of the negligence of any multinational, a peculiar
situation arises which calls for suitable effective machinery to articulate and
effectuate the grievances and demands of the victims, for which the
conventional adversary system would be totally inadequate. The State in
discharge of its sovereign obligation must come forward. The Indian state
because of its constitutional commitment is obliged to take upon itself the
claims of the victims and to protect them in their hour of need. Learned
Attorney General was also right in submitting that the decisions of the
Calcutta, Madras and U.S. Supreme Court clearly indicate that parens patriae
doctrine can be invoked by sovereign state within India, even if it be
contended that it has not so far been invoked inside India in respect of claims
for damages of victims suffered at the hands of the multinational. In our
opinion, conceptually and jurisprudentially, there is no bar on the State to
assume responsibilities analogous to parens patriae to discharge the State's
obligations under the Constitution. What the Central Government has done in the
instant case seems to us to be an expression of its sovereign power. This power
is plenary and inherent in every sovereign state to do all things which promote
the health, peace, 659 morals, education and good order of the people and tend
to increase the wealth and prosperity of the state. Sovereignty is difficult to
define. See in this connection, Weaver on Constitional Law, p. 490. By the
nature of things, the state sovereignty in these matters cannot be limited. It
has to be adjusted to the conditions touching the common welfare when covered
by legislative enactments. This power is to the public what the law of
necessity is to the individual. It is comprehended in the maxim salus populi
suprema lex--regard for public welfare is the highest law. It is not a rule, it
is an evolution. This power has always been as broad as public welfare and as
strong as the arm of the state, this can only be measured by the legislative
will of the people, subject to the fundamental rights and constitutional
limitations. This is an emanation of sovereignty subject to as aforesaid.
Indeed, it is the obligation of the State to assume such responsibility and
protect its citizens. It has to be borne in mind, as was stressed by the
learned Attorney General, that conferment of power and the manner of its
exercise are two different matters. It was submitted that the power to conduct
the suit and to compromise, if necessary, was vested in the Central Government
for the purpose of the Act. The power to compromise and to conduct the
proceedings are not uncanalised or arbitrary. These were clearly exercisable
only in the ultimate interests of the victims. The possibility of abuse of a
statute does not impart to it any element of invalidity. In this connection,
the observations of Viscount Simonds in Belfast Corporation v. O.D. Commission,
[1950] AC 490 at 520-21 are relevant where it was emphasised that validity of a
measure is not be determined by its application to particular cases. This Court
in Collector of Customs, Madras v. Nathella Sampathu Chetty, [1962] 3 SCR 786
at 825 emphasised that the constitutional validity of the statute would have to
be determined on the basis of its provisions and on the ambit of its operation
as reasonably construed. It has to be borne in mind that if upon so judged it
passes the test of reasonableness, then the possibility of the powers conferred
being improperly used is no ground for pronouncing the law itself invalid. See
in this connection also the observations in P.J. Irani v. State of Madras,
[1962] 2 SCR 169 at 178 to 181 and D.K. Trivedi v. State of Gujarat, [1986] Supp. SCC 20 at 60-61
64.
Sections 3 and 4 of the Act should be read together as contended by the learned
Attorney General, along with other provisions of the Act and in particular
sections 9 and 11 of the Act. These should be appreciated in the context of the
object sought to be achieved by the Act as indicated in the Statement of
Objects and Reasons and the Preamble to the Act. The Act was so designed that
the victims of the 660 disaster are fully protected and the claims of
compensation or damages for loss of life or personal injuries or in' respect of
other matters arising out of or connected with the disaster are processed
speedily, effectively, equitably and to the best advantage of the claimants.
Section 3 of the Act is subject to other provisions of the Act which includes
sections 4 and 11. Section 4 of the Act opens with nonobstante clause,
vis-a-vis, section 3 and therefore, overrides section 3. Learned Attorney
General submitted that the right of the Central Government under section 3 of
the Act was to represent the victims exclusively and act in the place of the
victims. The Central Government, it was urged, in other words, is substituted
in the place of 'the victims and is the dominus litis. Learned Attorney General
submitted that the dominus litis carries with it the right to conduct the suit
in the best manner as it deems fit, including, the right to withdraw and right
to enter into compromise. The right to withdraw and the right to compromise
conferred by section 3(2) of the Act cannot be exercised to defeat the rights
of the victims. As to how the rights should be exercised is guided by the
objects and the reasons contained in the Preamble, namely, to speedily and
effectively process the claims of the victims and to protect their claims. The
Act was passed replacing the Ordinance at a time when many private plaintiffs had
instituted complaints/suits in the American Courts. In such a situation, the
Government of India acting in place of the victims necessarily should have
right under the statute to act in all situations including the position of
withdrawing the suit or to enter into compromise. Learned Attorney General
submitted that if the UCC were to agree to pay a lump sum amount which would be
just, fair and equitable, but insists on a condition that the proceedings
should be completely withdrawn, then necessarily there should be power under
the Act to so withdraw. According to him, therefore, the Act engrafted a
provision empowring the Government to compromise. The provisions under section
3(2)(b) of the Act to enter into compromise was consistent with the powers of
dominus litis. In this connection, our attention was drawn to the definition of
'Dominus Litis' in Black's Law Dictionary, Fifth Edition, P. 437, which states
as follows:
"'Dominus
litis'. The master of the suit; i.e. the person who was really and directly interested
in the suit as a party, as distinguished from his attorney or advocate. But the
term is also applied to one who, though not originally a party, has made
himself such, by intervention or otherwise, and has assumed entire control and
responsibility for one side and is treated by the Court as liable for costs. Virginia
Electric & Power Co, v. Bowers, ISI Va.,
542, 25 S.E. 2d 361,263".
661
65.
Learned Attorney General sought to contend that the victims had not been
excluded entirely either in the conduct of proceedings or in entering into
compromise, and he referred to the proceedings in detail emphasising the
participation of some of the victims at some stage. He drew our attention to
the fact that the victims had filed separate consolidated complaints in
addition to the complaint filed by the Government of India. Judge Keenan of the
Distt. Court of America had passed orders permitting the victims to be
represented not only 'by the private Attorneys but also by the Govt. of India.
Hence, it was submitted that it could not be contended that the victims had
been excluded. Learned Attorney General further contended that pursuant to the
orders passed by Judge Keenan imposing certain conditions against the Union
Carbide and allowing the motion for forum non convenience of the UCC that the
suit came back to India and was instituted before the
Distt. Court of Bhopal. In those circumstances, it was urged by the learned
Attorney General that the private plaintiffs who went to America and who were represented by the
contingency lawyers fully knew that they could also have joined in the said
suit as they were before the American Court
along with the Govt. of India. It was contended that in the proceedings at any
point of time or stage including when the compromise was entered into, these
private plaintiffs could have participated in the court proceedings and could
have made their representation, if they so desired. Even in the Indian suits,
these private parties have been permitted to continue as parties represented by
separate counsel even though the Act empowers the Union to be the sole plaintiff. Learned Attorney General
submitted that Section 4 of the Act clearly enabled the victims to exercise
their right of participation in the proceedings. The Central Govt. was enjoined
to have due regard to any matter which such person might require to be urged.
Indeed, the learned Attorney General urged very strenuously that in the instant
case, Zehreeli Gas Kand Sangharsh Morcha and Jana Swasthya Kendra (Bhopal) had filed before the Distt. Judge,
Bhopal, an application under Order I Rule 8 read with Order I Rule 10 and
Section 15 1 of the CPC for their-intervention on behalf of the victims. They
had participated in the hearing before the learned Distt. Judge, who referred to
their intervention in the order. It was further emphasised that when the UCC
went up in revision to the High Court of Madhya Pradesh at Jabalpur against the interim compensation
ordered to be paid by the Distt. Court, the intervener through its Advocate,
Mr. Vibhuti Jha had participated in the proceedings. The aforesaid Association
had also intervened in the civil appeals preferred pursuant to the special
leave granted by this Court to the Union of India and Union Carbide against the
judgment of the 662 High Court for interim compensation. In those
circumstances, it was submitted that there did not exist any other gas victim
intervening in the proceedings, claiming participation under Section 4. Hence,
the right to compromise provided for by the Act, could not be held to be
violative of the principles of natural justice. According to the learned
Attorney General, this Court first proposed the order to counsel in court and
after they agreed thereto, dictated the order on 14th February, 1989. On 15th February, 1989 after the Memorandum of Settlement was filed pursuant to the orders of
the court, further orders were passed.
The
said Association, namely, Zehreeli Gas Kand Sangharsh Morcha was present,
according to the records, in the Court on both the dates and did not apparently
object to the compromise. Mr. Charanlal Sahu, one of the petitioners in the
writ petition, had watched the proceedings and after the Court had passed the
order on 15th February,
1989 mentioned that he
had filed a suit for Rs. 100 crores. Learned Attorney General submitted that
Mr. Sahu neither protested against the settlement nor did he make any prayer to
be heard. Shri Charan Lal Sahu, in the petition of opposition in one of these
matters have prayed that a sum of Rs. 100 million should be paid over to him
for himself as well as on behalf of those victims whom he claimed to represent.
In the aforesaid background on the construction of the Section, it was urged by
the learned Attorney General that Section 3 of the Act cannot be held to be
unconstitutional. The same provided a just, fair and reasonable procedure and
enabled the victims to participate in the proceedings at all stages--those who
were capable and willing to do so. Our attention was drawn to the fact that
Section 11 of the Act provides that the provisions of the Act shall have effect
notwithstanding anything inconsistent therewith contained in any other
enactment other than the Act. It was, therefore, urged that the provisions of
the Civil Procedure Code stood overridden in respect of the areas covered by
the Act, namely, (a) representation, (b) powers of representation; and (c)
compromise.
66.
According to the learned Attorney General, the Act did not violate the
principles of natural justice. The provisions of the CPC could not be read into
the Act for Section 11 of the Act provides that the application of the
provision of the Civil Procedure Code in so far as those were inconsistent with
the Act should be construed as overridden in respect of areas covered by it.
Furthermore, inasmuch as Section 4 had given a qualified right of participation
to the victims, there cannot be any question of violation of the principles of
natural justice. The scope of the application of the principles of natural
justice cannot be judged by any strait jacket formula. According to him, the
663 extension of the principles of natural justice beyond what is provided by
the Act in Sections 3 & 4, was unwarranted and would deprive the provisions
of the Statute of their efficacy in relation to the achievement of 'speedy
relief', which is the object intended to be achieved. He emphasised that the
process of notice, consultation and exchange of information, informed
decision-making process, the modalities of assessing a consensus of opinion
would involve such time that the Govt. would be totally unable to act in the
matter efficiently, effectively and purposefully on behalf of the victims for
realisation of the just dues of the victims. He further urged that the Civil
Procedure Code before its amendment in 1976 did not have the provisions of
Order l Rules 8(4), (5) & (6) and Explanations etc. nor Order XXIII Rules
3A and 3B. Before the amendment the High Court had taken a view against the
requirement of hearing the parties represented in the suit under Order 1, Rule
8 before it before settling or disposing of the suit. Our attention was drawn
to the decision of the Calcutta High Court in Chintaharan Ghose & Ors. v.
Gujaraddi Sheik & Ors., AIR 1951 Cal. 456 at 457-459, wherein it was held
by the learned Single Judge that the plaintiff in a representative suit had
right to compromise subject to the conditions that the suit was properly filed
in terms of the provisions of that Rule and the settlement was agreed bona
fide. Learned Attorney General in that context contended that when the suit was
validly instituted, the plaintiff had a right to compromise the suit and there
need not be any provision for notice to the parties represented before entering
into any compromise. Reliance was placed on the decision of the Allahabad High
Court in Ram Sarup v. Nanak Ram, AIR 1952 Allahabad 275, where it was held that
a compromise entered into in a suit filed under Order 1 Rule 8 of the CPC was
binding on all persons as the plaintiffs who had instituted the suit in
representative capacity had the authority to compromise. He further submitted
that most, if not all, of the victims had given their powers of attorney which
were duly filed in favour of the Union of India. These powers or attorney have
neither been impeached nor revoked or withdrawn. By virtue of the powers of
attorney the Union of India, it was stated, had the authority to file the suits
and to compromise the interests of the victims if so required. The Act in
question itself contemplates settlement as we have noted, and a settlement
would need a common spokesman.
67. It
was submitted that the Govt. of India as the statutory representative
discharged its duty and is in a centralised position of assessing the merits
and demerits of any proposed course of action. So far as the act of compromise,
abridging or curtailing the ambit of the 664 rights of the victims, it was
submitted that in respect of liabilities of UCC & UCIL, be it corporate,
criminal or tortious, it was open to an individual to take a decision of enforcing
the liability to its logical extent or stopping short of it and acceding to a
compromise. Just as an individual can make an election in the matter of
adjudication of liability so can a statutory representative make an election.
Therefore, it is wholly wrong to contend, it was urged, that Section 3(ii)(b)
is inconsistent with individual's right of election and at the same time it
provides the centralised decision-making processes to effectively adjudge and
secure the common good. It was only a central agency like the Govt. of India,
who could have a perspective of the totality of the claims and a vision of the
problems of individual plaintiffs in enforcing these, it was urged. It was
emphasised that it has to be borne in mind that a compromise is a legal act. In
the present case, it is a part of the conduct of the suit. It is, therefore,
imperative that the choice of compromise is made carefully, cautiously and with
a measure of discretion, it was submitted. But if any claimant wished to be
associated with the conduct of the suit, he would necessarily have been
afforded an opportunity for that purpose, according to the learned Attorney
General.
In
this connection, reference was made to Section 4 of the Act. On the other hand,
an individual who did not participate in the conduct of the suit and who is
unaware of the various intricacies of the case, could hardly be expected to
meaningfully partake in the legal act of settlement either in conducting the
proceedings or entering into compromise, it was urged. In those circumstances,
the learned Attorney General submitted that the orders of 14-15th February, 1989 and the Memorandum of Settlement
were justified both under the Act and the Constitution. According to him, the
terms of Settlement might be envisaged as pursuant to Section 3(ii)(b) of the
Act, which was filed according to him pursuant to judical direction. He sought
more than once to emphasise, that the order was passed by the highest Court of
the land in exercise of extraordinary jurisdiction vested in it under the
Constitution.
68.
Our attention was drawn to several decisions for the power of this Court under
Articles 136 and 142 of the Constitution. Looked closely at the provisions of
the Act, it was contended that taking into consideration all the factors,
namely, possibilities of champerty, exploitation, unconscionable agreements and
the need to represent the dead and the disabled, the course of events would
reveal a methodical and systematic protection and vindication of rights to the
largest possible extent. It was observed that the rights are indispensably
valuable possessions, but the rights is something which a 665 man can stand on,
something which must be demanded or insisted upon without embarrassment or
shame. When rights are curtailed, permissibility of such a measure can be
examined only upon the strength, urgency and the preeminence of rights and the
largest good of the largest number sought to b,e served by curtailment. Under
the circumstances which were faced by the victims of Bhopal gas tragedy, the justifying basis,
according to the learned Attorney General, or ground of human rights is that
every person morally ought to have something to which he or she is entitled. It
was emphasised that the Statute aimed at it. The Act provides for assumption of
rights to sue with the aim of securing speedy, effective and equitable results
to the best advantage of the claimants. The Act and the scheme, according to
the learned Attorney General, sought to translate that profession into a system
of faith and possible association when in doubt.
Unless
such a profession is shown to be unconscionable under the circumstances or
strikes judicial conscience as a subversion of the objects of the Act, a
declaredly fair, just and equitable exercise of a valid power would not be open
to challenge. He disputed the submission that the right to represent victims
postulated as contended mainly by the counsel on behalf of the petitioners, a
pre-determination of each individual claim as a sine qua non for proceeding
with the action. Such a construction would deplete the case of its vigour,
urgency and sense of purpose, he urged. In this case, with the first of the
cases having been filed in U.S. Federal Court on December 7, 1984 a settlement would have been reached for a much smaller sum
to the detriment of the victims. Learned Attorney General emphasised that this
background has to be kept in mind while adjudging the validity of the Act and
the appropriateness of the conduct of the suit in the settlement entered into.
69. He
submitted that it has to be borne in mind that if the contentions of the
petitioners are entertained, the rights theoretically might be upheld but the
ends of justice would stand sacrificed. It is in those circumstances that it
was emphasised that the claimant is an individual and is the best person to
speak about his injury. The knowledge in relation to his injury is relevant for
the purpose of compensation, whose distribution and disbursement is the
secondary stage. It is fallacious to suggest that the plaint was not based upon
necessary data. He insisted that the figures mentioned in the plaint although
tentative were not mentioned without examination or analysis.
70. It
was further submitted by the learned Attorney General 666 that while the Govt.
of India had proceeded against the UCC, it had to represent the victims as a
class and it was not possible to define each individual's right after careful
scrutiny, nor was it necessary or possible to do so in a mass disaster case.
The settlement was a substitute for adjudication since it involved a process of
reparation and relief. The relief and reparation cannot be said to be
irrelevant for the purpose of the Act. It was stated that the alleged liability
of the Govt. of India or any claim asserted against the alleged joint
tort-feasor should not be allowed to be a constraint on the Govt. of India to
protect the interests of its own citizens. Any counter-claim by UCC or any
claim by a citizen against the Govt. cannot vitiate the action of the State in
the collective interest of the victims, who are the citizens. Learned Attorney
General submitted that any industrial activity, normally, has to be licensed.
The mere regulation of any activity does not carry with it legally a
presumption of liability for injury caused by the activity in the event of a
mishap occurring in the course of such an activity. In any event, the learned
Attorney General submitted the Govt. of India enjoys sovereign immunity in
accordance with settled law. If this were not the case, the Sovereign will have
to abandon all regulatory functions including the licensing of drivers of
automobiles.
Hence,
we have to examine the question whether even on the assumption that there was
negligence on the part of the Govt. of India in permitting/licensing of the
industry set up by the Union Carbide in Bhopal or permitting the factory to
grow up, such permission or conduct of the Union of India was responsible for
the damage which has been suffered as a result of Bhopal gas leakage. It is
further to be examined whether such conduct was in discharge of the sovereign
functions of the Govt., and as such damages, if any, resulting there from are
liable to be proceeded against the Govt. as a joint tort-feasor or not. In
those circumstances, it was further asserted on behalf of the Union of India
that though calculation of damages in a precise manner is a logical consequence
of a suit in progress it cannot be said to be a condition precedent for the
purpose of settling the matter. Learned Attorney General urged that the
accountability to the victims should be through the court. He urged that the
allegation that a large number of victims did not give consent to the
settlement entered into, is really of no relevance in the matter of a
compromise in a mass tort action. It was highlighted that it is possible that
those who do not need urgent relief or are uninformed of the issues in the
case, may choose to deny consent and may place the flow of relief in jeopardy.
Thus, consent based upon individual subjective opinion can never be correlated
to the proposal of an overall settlement in an urgent matter.
Learned
Attorney General urged further that if indeed consent were to be insisted upon
as a mandatory 667 requirement of a Statute, it would not necessarily lead to
an accurate reflection of the victims' opinion as opinions may be diverse. No
individual would be in a position to relate himself to a lump sum figure and
would not be able to define his expectations on a global criteria. In such
circumstances the value of consent is very much diminished. It was urged that
if at all consent was to be insisted it should not be an expression of the mind
without supporting information and response. To make consent meaningful it is
necessary that it must be assertion of a fight to be exercised in a meaningful
manner based on information and comprehension of collective welfare and
individual good. In a matter of such dimensions the insistence upon consent
will lead to a process of enquiry which might make effective consideration of
any proposal impossible. For the purpose of affording consent, it would also be
necessary that each individual not only assesses the damages to himself
objectively and places his opinion in the realm of fair expectation, but would
also have to do so in respect of others. The learned Attorney General advanced
various reasons why it is difficult now or impossible to have the concurrence
of all.
71. In
answer to the criticism by the petitioners, it was explained on behalf of the
Union of India that UCIL was not impleaded as a party in the suit because it
would have militated against the plea of multinational enterprise liability and
the entire theory of the case in the plaint.
It was
highlighted that the power to represent under the Act was exclusive, the power
to compromise for the Govt. of India is without reference to the victims, yet
it is a power guided by the sole object of the welfare of the victims. The
presence and ultimately the careful imprimatur of the judicial process is the
best safeguard to the victims. Learned Attorney General insisted that hearing
the parties after the settlement would also not serve any purpose. He urged
that it can never be ascertained with certainty whether the victims or groups
have authorised what was being allegedly spoken on their behalf; and that the
victims would be unable to judge a proposal of this nature. A method of
consensus need not be evolved like in America where every settlement made by
contingency fee lawyers who are anxious to obtain their share automatically become
adversaries of the victims and the court should therefore be satisfied. Here
the Court arrived at the figure and directed the parties to file a settlement
on the basis of its order of February 14, 1985
and the interveners were heard, it was urged. It was also urged that notice to
the victims individually would have been a difficult exercise and analysis of
their response time consuming.
668
72.
The learned Attorney General urged that neither the Central Govt. nor the State
Govt. of Madhya Pradesh is liable for the claim of the victims. He asserted
that, on the facts of the present case, there is and can be no liability on
their part as joint tort-feasors. For the welfare of the community several
socio-economic activities will have to be permitted by the Govt. Many of these
activities may have to be regulated by licensing provisions contained in
Statutes made either by Parliament or by State Legislatures.
Any
injury caused to a person, to his life or liberty in the conduct of a licensed
authority so as to make the said licensing authority or the Govt. liable to
damages would not be in conformity with jurisprudential principle. If in such
circumstances it was urged on behalf of the Govt., the public exchequer is made
liable, it will cause great public injury and may result in drainage of the
treasury. It would terrorise the welfare state from acting for development of
the people, and will affect the sovereign governmental activities which are
beneficial to the community not being adequately licensed and would thereby
lead to public injury.
In any
event, it was urged on behalf of the Govt., that such licensing authorities
even assuming without admitting could be held to be liable as joint tort
feasors, it could be so held only on adequate allegations of negligence with
full particulars and details of the alleged act or omission of the licensing
authority alleged and its direct nexus to the injury caused to the victims. It
had to be proved by cogent and adequate evidence. On some conjecture or surmise
without any foundation on facts, Govt's right to represent the victims cannot
be challenged. It was asserted that even if the Govt. is considered to be
liable as a joint tort feasor, it will be entitled to claim sovereign immunity
on the law as it now stands.
73.
Reference was made to the decision of this Court in Kasturilal Kalia Ram Jain
v. The State of U.P., [1965] 1 SCR 375 where the conduct of some police
officers in seizing gold in exercise of their statutory powers was held to be
in discharge of the sovereign functions of the State and such activities
enjoyed sovereign immunities. The liability of the Govt. of India under the
Constitution has to be referred to Article 300, which takes us to Sections 15
& 18 of the Indian Independence Act, 1947, and Section 176(1) of the Govt.
of India Act, 1935. Reference was also made to the observations of this Court
in The State of Rajasthan v. Mst. Vidhyawati, & Anr., [1962] 2 Supp. SCR
989.
74. We
have noted the shareholding of UCC. The circumstances that financial institutions
held shares in the UCIL would not disqualify 669 the Govt. of India from acting
as patens patriae and in discharging of its statutory duties under the Act. The
suit was filed only against the UCC and not against UCIL. On the basis of the
claim made by the Govt. of India, UCIL was not a necessary party. It was suing
only the multinational based on several legal grounds of liability of the UCC,
inter alia. on the basis of enterprise liability. If the Govt. of India had
instituted a suit against UCIL to a certain extent it would have weakened its
case against UCC in view of the judgment of this Court in M.C. Mehta's case
(supra). According to learned Attorney General, the Union of India in the
present case was not proceeding on the basis of lesser liability of UCC
predicated in Mehta's case but on a different jurisprudential principle to make
UCC strictly and absolutely liable for the entire damages.
75.
The learned Attorney General submitted that even assuming for the purpose of
argument without conceding that any objection can be raised for the Govt. of
India representing the victims, to the present situation the doctrine of
necessity applied. The UCC had to be sued before the American courts. The
tragedy was treated as a national calamity, and the Govt. of India had the
right, and indeed the duty, to take care of its citizens, in the exercise of
its parens patriae jurisdiction or on principle analogous thereto. After having
statutorily armed itself in recognition of such parens patraie right or on principles
analogous thereto, it went to the American courts. No other person was properly
designed for representing the victims as a foreign court had to recognise a
right of representation. The Govt. of India was permitted to represent the victims before the American courts.
Private plaintiffs were also represented by their attorneys. A Committee of
three attorneys was formed before the case proceeded before Judge Keenan. It
was highlighted that the order of Judge Keenan permitted the Govt. of India to
represent the victims. If there was any remote conflict of interests between
the Union of India and the victims from the theoretical point of view the
doctrine of necessity would override the possible violation of the principles
of natural justice--that no man should be Judge in his own case. Reference may
be made to Halsbury's Laws of England, Vol. 1, 4th Edn., page 89, para 73,
where it was pointed that that if all the members of the only tribunal
competent to determine a matter are subject to disqualification, they may be
authorised and obliged to hear that matter by virtue of the operation of the
common law doctrine of necessity. Reference was also made to De Smith's
Judicial Review of Administrative Action (4th Edn. pages 276-277. See also G.A.
Flick--Natural Justice, [1879] pages 138-141.
Reference
was also made to the observations of this Court in J. Mohapatra & Co. 670
& Anr. v. State of Orissa & Anr., [1984] 4 SCC 103, where
at page 112 of the report, the Court recognised 'the principle of necessity. It
was submitted that these were situations where on the principle of doctrine of
necessity a person interested was held not disqualified to adjudicate on his
rights. The present is a case where the Govt. of India only represented the
victims as a party and did not adjudicate between the victims and the UCC. It
is the Court which would adjudicate the rights of the victims. The
representation of the victims by the Govt. of India cannot be held to be bad,
and there is and there was no scope of violation of any principle of natural
justice. We are of the opinion in the facts and the circumstances of the case
that this contention urged by Union of India is right. There was no scope of
violation of the principle of natural justice on this score.
76. It
was also urged that the doctrine of de facto representation will also apply to
the facts and the circumstances of the present case. Reliance was placed on the
decision of this Court in Gokaraju Rangaraju etc. v. State of A.P., [1981] 3
SCR 474, where it was held that the doctrine of de facto representation
envisages that acts performed within the scope of assumed official authority in
the interest of public or third persons and not for one's own benefit, are
generally to be treated as binding as if they were the acts of officers de
jure. This doctrine is rounded on good sense, sound policy and practical
expediency. It is aimed at the prevention of public and private mischief and
protection of public and private interest. It avoides endless confusion and
needless chaos. Reference was made to the observations of this Court in
Pushpadevi M. Jatia v. M.L. Wadhawan, [1987] 3 SCC 367 at 389-390 and M/s.
Beopar Shayak (P) Ltd. & Ors. v. Vishwa Nath & Ors., [1987] 3 SCC 693
at 702 & 703. Apart from the aforesaid doctrine, doctrine of bona fide
representation was sought to be resorted to in the circumstances. In this
connection, reference was made to Dharampal Sing, v. Director of Small
Industries Services & Ors., AIR 1980 SC 1888; N.K. Mohammad Sulaiman v.
N.C. Mohammad Ismail & Ors., [1966] 1 SCR 937 and Malkarjun Bin Shigramappa
Pasara v. Narhari Bin Shivappa & Anr., 27 IA 2 16.
77. It
was further submitted that the initiation of criminal proceedings and then
quashing thereof, would not make the Act ultra vires so far as it concerned.
Learned Attorney General submitted that the Act only authorised the Govt. of
India to represent the victims to enforce their claims for damages under the
Act. The Govt. as such had nothing to do with the quashing of the criminal
proceedings and it was not representing the victims in respect of the criminal
liability of 671 the UCC or UCIL to the victims. He further submitted that
quashing of criminal proceedings was done by the Court in exercise of plenary
powers under Articles 136 and 142 of the Constitution. In this connection,
reference was made to State of U.P. v. Poosu
& Anr., [1976] 3 SCR 1005; K.M. Nanavati v. The State of Bombay, [1961] 1 SCR 497. According to the
learned Attorney General, there is also power in the Supreme Court to suggest a
settlement and give relief as in Ram Gopal v. Smt. Sarubai & Ors., [1981] 4
SCC 505; India Mica & Micanite Industries Ltd. v. State of Bihar &
Ors., [1982] 3 SCC 182.
78.
Learned Attorney General urged that the Supreme Court is empowered to act even
outside a Statute and give relief in addition to what is contemplated by the
latter in exercise of its plenary power. This Court acts not only as a Court of
Appeal but is also a Court of Equity. See Roshanlal Kuthiala & Ors. v. R.B.
Mohan Singh Oberoi, [1975] 2 SCR 49
1.
During the course of heating of the petitions, he informed this Court that the
Govt. of India and the State Govt. of Madhya Pradesh refuted and denied any
liability, partial or total, of any sort in the Bhopal gas Leak disaster, and this position is supported by the
present state of law. It was, however, submitted that any claim against the
Govt. of India for its alleged tortious liability was outside the purview of
the Act and such claims, if any, are not extinguished by reason of the orders dated
14th & 15th February, 1989 of this Court.
79.
Learned Attorney General further stated that the amount of $ 470 million which
was secured as a result of the memorandum of settlement and the said orders of
this Court would be meant exclusively for the benefit of the victims who have
suffered on account of the Bhopal gas leak disaster. The Govt. of India would
not seek any reimbursement on account of the expenditure incurred suo motu for
relief and rehabilitation of the Bhopal victims nor will the Govt. or its instrumentality make any claim on its
own arising from this disaster. He further assured this Court that in the event
of disbursement of compensation being initiated either under the Act or under
the orders of this Court, a notification would be instantaneously issued under
Section 5(3) of the Act authorising the Commissioner or any other officers to
discharge functions and exercise all or any powers which the Central Govt. may
exercise under Section 5 to enable the victims to place before the Commissioner
or the Dy. Commissioner any additional evidence that they would like to be
considered.
80.
The Constitution Bench of this Court presided over by the learned Chief Justice
has pronounced an order on 4th May, 1989 giving 672 reasons for the orders passed
on 14th-15th February, 1989.
Inasmuch
as good deal of criticism was advanced before this Court during the hearing of
the arguments on behalf of the petitioners about the propriety and validity of
the settlement dated 14th-15th February, 1989 even though the same was not
directly in issue before us, it is necessary to refer briefly to what the
Constitution Bench has stated in the said order dated 4th May, 1989. After
referring to the facts leading to the settlement, the Court has set out the
brief reason on the following points:
(a)
How did the Court arrive at the sum of 470 million US dollars for an overall
settlement?
(b)
Why did the Court consider the sum-of 470 millions US dollars as 'just,
equitable and reasonable'?
(c)
Why did the Court not pronounce on certain important legal questions of
far-reaching importance said to arise in the appeals as to the principles of
liability of monolithic, economically entrenched multinational companies
operating with inherently dangerous technologies in the developing countries of
the third world?
These
questions were said to be of great contemporary relevance to the democracies of
the third world.
This
Court recognised that there was another aspect of the review pertaining to the
part of the settlement which terminated the criminal proceedings. The questions
raised on the point in the review-petitions, the Court was of the view, prima
facie merit consideration and therefore, abstained from saying anything which
might tend to prejudge this issue one way or the other.
81.
The basic consideration, the Court recorded, motivating the conclusion of the
settlement was the compelling need for urgent relief, and the Court set out the
law's delays duly considering that there was a compelling duty both judicial
and humane, to secure immediate relief to the victims. In doing so, the Court
did not enter upon any forbidden ground, the court stated. The Court noted that
indeed efforts had already been made in this direction by Judge Keenan and the
learned District Judge of Bhopal. Even at the opening of the arguments in the
appeals, the Court had suggested to learned counsel to reach a just and fair
settlement. And when counsel met for re-scheduling of the hearings the
suggestion was reiterated. The Court recorded that the response of learned
counsel was positive in attempting a settlement but they expressed a certain
degree of uneasiness and skepticism at the prospects of success in view of
their past experience of such negotiations when, as they stated, there had been
uninformed and even irresponsible criticism of the attempts at settlement.
673
82.
Learned Attorney General had made available to the Court the particulars of
offers and counter-offers made on previous occasions and the history of
settlement. In those circumstances, the Court examined the prima facie material
as the basis of quantification of a sum which, having regard to all the
circumstances including the prospect of delays inherent in the judicial process
in India and thereafter in the matter of domestication of the decree in the
U.S. for the purpose of execution and directed that 470 million US dollars,
which upon immediate payment with interest over a reasonable period, pending
actual distribution amongst the claimants, would aggregate to nearly 500 million
US dollars or its rupee equivalent of approximately Rs.750 crores which the
learned Attorney General had suggested, be made the basis of settlement, and
both the parties accepted this direction.
83.
The Court reiterated that the settlement proposals were considered on the
premise that the Govt. had the exclusive statutory authority to represent and
act on behalf of the victims and neither counsel had any reservation on this.
The
order was also made on the premise that the Act was a valid law. The Court declared
that in the event the Act is declared void in the pending proceedings
challenging its validity, the order dated 14th February, 1989 would require to be examined in the
light of that decision. The Court also reiterated that if any material was
placed before it from which a reasonable inference was possible that the UCC
had, at any time earlier, offered to pay any sum higher than an outright down
payment of US 470 million dollars, this Court would straightaway initiate suo
motu action requiring the concerned parties to show cause why the order dated
14th February'89 should not be set aside and the parties relegated to their
original positions. The Court reiterated that the reasonableness of the sum was
based not only on independent quantification but the idea of reasonableness for
the present purpose was necessarily a broad and general estimate in the context
of a settlement of the dispute and not on the basis of an accurate assessment
by adjudication.
The
Court stated that the question was, how good or reasonable it was as a
settlement, which would avoid delay, uncertainties and assure immediate
payment. An estimate in the very nature of things, would not have the accuracy
of an adjudication. The Court recorded the offers, counter-offers, reasons and
the numbers of the persons treated and the claims already made. The Court found
that from the order of the High Court and the admitted position on the
plaintiff's side, a reasonable prima facie estimate of the number of fatal
cases and serious personal injury cases, was possible to be made. The Court
referred to the High Court's 674 assessment and procedure to examine the task
of assessing the quantum of interim compensation. The Court referred to M. C
Mehta's case reiterated by the High Court, bearing in mind the factors that if
the suit proceeded to trial the plaintiff-Union of India would obtain judgment
in respect of the claims relating to deaths and personal injuries in the
following manner:(a) Rs.2 lakhs in each case of death; (b) Rs.2 lakh in each case
of total permanent disability; (c) Rs. 1 lakh in each case of permanent partial
disablement; and (d) Rs.50,000 in each case of temporary partial disablement.
84.
Half of these amounts were awarded as interim compensation by the High Court.
85.
The figures adopted by the High Court in regard to the number of fatal cases
and cases of serious personal injuries did not appear to have been disputed by
anybody before the High Court, this Court observed. From those figures, it came
to the conclusion that the total number of fatal cases was about 3,000 and of
grievous and serious personal injuries, as verifiable from the records was
30,000. This Court also took into consideration that about 8 months after the
occurrence a survey had been conducted for the purpose of identification of
cases. These figures indicated less than 10,000. In those circumstances, as a
rough and ready estimate, this Court took into consideration the prima facie
findings of the High Court and estimated the number of fatal cases of 3,000 where
compensation could range from Rs. 1 lakh to Rs.3 lakhs. This would account for
Rs.70 crores, nearly 3 times higher than what would have otherwise been awarded
in comparable cases in motor vehicles accident claims.
86.
The Court recognised the effect of death and reiterated that loss of precious
human lives is irreparable. The law can only hope to compensate the estate of a
person whose life was lost by the wrongful act of another only in the way the
law was equipped to compensate i.e. by monetary compensation calculated on
certain well-recognised principles.
"Loss
to the estate" which is the entitlement of the estate and the 'loss of
dependency' estimated on the basis of capitalised present value awardable to
the heirs and dependants, this Court considered, were the main components in
the computation of compensation in fatal accident actions, but the High Court
adopted a higher basis. The Court also took into account the personal injury
cases, and stated that these apportionments were merely broad considerations
generally guiding the idea of reasonableness of the overall basis of 675
settlement, and reiterated that this exercise was not a pre-determination of
the quantum of compensation amongst the claimants either individually or
catagory-wise, and that the determination of the actual quantum of compensation
payable to the claimants has to be done by the authorities under the Act. These
were the broad assessments and on that basis the Court made the assessment. The
Court believed that this was a just and reasonable assessment based on the
materials available at that time. So far as the other question, namely, the
vital juristic principles of great contemporary relevance to the Third World
generally, and to India in particular, touching problems emerging from the
pursuit of such dangerous technologies for economic gains by multinationals in
this case, the Court recognised that these were great problems and reiterated
that there was need to evolve a national policy to protect national interests
from such ultra-hazardous pursuits of economic gain; and that Jurists,
technologists and other experts in economics. environmentology, futurology,
sociology and public health should identify the areas of common concern and
help in evolving proper criteria which might receive judicial recognition and
legal sanction. The Court reiterated that some of these problems were referred
to in M.C. Mehta's case (supra). But in the present case, the compulsions of
the need for immediate relief to tens of thousands of suffering victims could
not wait till these questions vital though these be, were resolved in due
course of judicial proceedings; and the tremendous suffering of thousands of
persons compelled this Court to move into the direction of immediate relief
which, this Court thought, should not be subordinated to the uncertain promises
of the law, and when the assessment of fairness of the amount was based on
certain factors and assumptions not disputed even by the plaintiffs.
87.
Before considering the question of constitutional validity of the Act, in the
light of the background of the facts and circumstances of this case and
submissions made, it is necessary to refer to the order dated 3rd March, 1989
passed by the Constitution Bench in respect of writ petitions Nos. 164/86 and
268/89, consisting of 5 learned Judges presided over by the Hon'ble the Chief
Justice of India. The order stated that these matters would be listed on 8th March, 1989 before a Constitution Bench for
decision "on the sole question whether the Bhopal Gas Leak Disaster
(Processing of Claims) Act, 1985 is ultra vires". This is a judicial order
passed by the said Constitution Bench. This is not an administrative order.
Thus, these matters are before this Court. The question, therefore, arises;
what are these matters? The aforesaid order specifically states that these
matters were placed before this Bench on the "sole question" whether
the Act is ulta vires.
676
Hence, these matters are not before this Bench for disposal of these writ
petitions. If as a result of the determination, one way or the other, it is
held, good and bad, and that some relief becomes necessary, the same cannot be
given or an order cannot be passed in respect thereof, except declaring the Act
or any portion of the Act, valid or invalid constitutionally as the decision
might be.
88. In
writ petition No. 268/89 there is consequential prayer to set aside the order
dated 14/15th February,
1989.
But
since the order dated 3rd March, 1989 above only suggests that these matters
have been placed before this Bench 'on the sole question' whether the Bhopal
Act is ultra vires or not, it is not possible by virtue of that order to go
into the question whether the settlement is valid or liable to be set aside as
prayed for in the prayers in these applications.
89.
The provisions of the Act have been noted and the rival contentions of the
parties have been set out before.
It is,
however, necessary to reiterate that the Act does not in any way circumscribe
the liability of the UCC, UCIL or even the Govt. of India or Govt. of Madhya Pradesh if they
are jointly or severally liable. This follows from the construction of the Act,
from the language that is apparent.
The
context and background do not indicate to the contrary.
Counsel
for the victims plead that that is so. The learned Attorney General accepts
that position. The liability of the Government is, however, disputed. This Act
also does not deal with any question of criminal liability of any of the
parties concerned. On an appropriate reading of the relevant provisions of the
Act, it is apparent that the criminal liability arising out of Bhopal gas leak disaster is not the
subject-matter of this Act and cannot be said to have been in any way affected,
abridged or modified by virtue of this Act. This was the contention of learned
counsel on behalf of the victims. It is also the contention of the learned
Attorney General. In our opinion, it is the correct analysis and consequence of
the relevant provisions of the Act. Hence, the submissions made on behalf of
some of the victims that the Act was bad as it abridged or took away the
victims' right to proceed criminally against the delinquent, be it UCC or UCIL
or jointly or severally the Govt. of India, Govt. of Madhya Pradesh or Mr.
Arjun Singh, the erstwhile Chief Minister of Madhya Pradesh, is on a wrong
basis. There is no curtailment of any right with respect to any criminal
liability. Criminal liability is not the subject-matter of the Act. By the
terms of the Act and also on the concessions made by the learned Attorney
General, if that be so, then can non-prosecution in criminal liability be a
consideration or valid consideration for settlement of claims under the Act?
677 This is a question which has been suggested and articulated by learned
counsel appearing for the victims. On the other hand, it has been asserted by
the learned Attorney General that that part of the order dated 14/15th
February, 1989 dealing with criminal prosecution or the order of this Court was
by virtue of the inherent power of this Court under Articles 136 & 142 of
the Constitution. These, the learned Attorney General said, were in the
exercise of plenary powers of this Court. These are not considerations which
induced the parties to enter into settlement. For the purpose of determination
of constitutional validity of the Act, it is however necessary to say that
criminal liability of any of the delinquents or of the parties is not the
subject-matter of this Act and the Act does not deal with either claims or
rights arising out of such criminal liability. This aspect is necessary to be
reiterated on the question of validity of the Act.
90. We
have set out the language and the purpose of the Act, and also noted the
meaning of the expression 'claim' and find that the Act was to secure the
claims connected with or arising out of the disaster so that these claims might
be dealt with speedily, affectively, equitably and to the best advantage of the
claimants. In our opinion, Clause (b) of Section 2 includes all claims of the
victims arising out of and connected with the disaster for compensation and
damages or loss of life or personal injury or loss to the business and flora
and fauna. What, however, is the extent of liability, is another question. This
Act does not purport to or even to deal with the extent of liability arising
out of the said gas leak disaster. Hence, it would be improper or incorrect to
contend as did Ms. Jaising, Mr Garg and other learned counsel appearing for the
victims, that the Act circumscribed the liability--criminal, punitive or
absolute of the parties in respect of the leakage. The Act provides for a
method or procedure for the establishment and enforcement of that liability.
Good deal of argument was advanced before this Court on the question that the
settlement has abridged the liability and this Court has lost the chance of
laying down the extent of liability arising out of disaster like the Bhopal Gas
Leak disaster. Submissions were made that we should lay down clearly the extent
of liability arising out of these types of disasters and we should further hold
that the Act abridged such liability and as such curtailed the rights of the
victims and was bad on that score. As mentioned hereinbefore, this is an
argument under a misconception. The Act does not in any way except to the
extent indicated in the relevant provisions of the Act circumscribe or abridge
the extent of the rights of the victims so far as the liability of the
delinquents are concerned. Whatever are the rights of the victims and whatever
claims arise out of the 678 gas leak disaster for compensation, personal
injury, loss of life and property, suffered or likely to be sustained or
expenses to be incurred or any other loss are covered by the Act and the
Central Govt. by operation of Section 3 of the Act has been given the exclusive
right to represent the victims in their place and stead. By the Act, the extent
of liability is not in any way abridged and, therefore, if in case of any
industrial disaster like the Bhopal Gas Leak disaster, there is right in
victims to recover damages or compensation on the basis of absolute liability,
then the same is not in any manner abridged or curtailed.
91.
Over 120 years ago Rylands v. Fletcher, [1868] Vol. 3 LR E & I Appeal Cases
330 was decided in England. There A, was the lessee of certain
mines. B, was the owner of a mill standing on land adjoining that under which
the mines were worked. B, desired to construct a reservoir, and employed
competent persons, such as engineers and a contractor, to construct it. A, had
worked his mines up to a spot where there were certain old passages of disused
mines; these passages were connected with vertical shafts which communicated
with the land above, and which had also been out of use for years, and were
apparently filled with marl and the earth of the surrounding land. No care had
been taken by the engineer or the contractor to block up these crafts, and
shortly after water had been introduced into the reservoir it broke through
some of the shafts, flowed through the old passage and flooded As mine. It was
held by the House of Lords in England that where the owner of land, without
wilfulness or negligence, uses his land in the ordinary manner of its use,
though mischief should thereby be occasioned to his neighbour, he will not be
liable in damages.
But if
he brings upon his land any thing which would not naturally come upon it, and
which is in itself dangerous, and may become mischievous if not kept under
proper control, though in so doing he may act without personal wilfulness or
negligence, he will be liable in' damages for any mischief thereby occasioned.
In the background of the facts it was held that A was entitled to recover
damages from B, in respect of the injury. The question of liability was
highlighted by this Court in M.C. Mehta's case (supra) where a Constitution
Bench of this Court had to deal with the rule of strict liability. This Court
held that the rule in Rylands v. Fletcher, (supra) laid down a principle that
if a person who brings on his land and collects and keep there anything likely
to do harm and such thing escapes and does damage to another, he is liable to
compensate for the damage caused. This rule applies only to nonnatural user of
the land and does not apply to things naturally on the land or where the escape
is due to an act of God and an act of a stranger or the default of the person
injured or where the things which escape 679 are present by the consent of the
person injured or in certain cases where there is a statutory authority. There,
this Court observed that the rule in Rylands v. Fletcher, (supra) evolved in
the 19th century at a time when all the developments of science and technology
had not taken place, and the same 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. In a modern industrial society
with highly developed scientific knowledge and technology where hazardous or
inherently dangerous industries are necessary to be carried on as part of the
developmental process, Courts should not feel inhibited by this rule merely
because the new law does not recognise the rule of strict and absolute
liability in case of an enterprise engaged in hazardous and dangerous activity.
This Court noted that 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. Law cannot afford to remain static. This Court reiterated there
that if it is found 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, the Court should not hesitate to evolve
such principle of liability merely because it has not been so done in England.
According to this Court, an enterprise which is engaged in a hazardous or
inherently dangerous industry which poses 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. 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 to anyone on account of an accident in the operation of
such activity resulting, for instance, in escape of toxic gas the enterprise is
strictly and absolutely liable to compensate all those who were affected by the
accident as part of the social cost for carrying on such activity, regardless
of whether it is carried on carefully or not. 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. If the enterprise is permitted
to carry on a hazardous or dangerous activity for its profit, the law must
presume that such permission is conditional on the enterprise absorbing the
cost of any accident arising on account of such activity as an appropriate item
of its overheads. The enterprise alone has the resources to discover and guard
against hazards or dangers and 'to provide warning against potential hazards.
680
This Court reiterated that the measure of compensation in these kinds of cases
must be correlated to the magnitude and capacity of the enterprise because such
compensation must have a 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 the carrying on of the hazardous
or inherently dangerous activity by the enterprise. The determination of actual
damages payable would depend upon various facts and circumstances of the
particular case.
92. It
was urged before us that there was an absolute and strict liability for an
enterprise which was carrying on dangerous operations with gases in this country.
It was further submitted that there was evidence on record that sufficient care
and attention had not been given to safeguard against the dangers of leakage
and protection in case of leakage. Indeed, the criminal prosecution that was
launched against the Chairman of Union Carbide Shri Warren Anderson and others,
as indicated before, charged them along with the defendants in the suit with
delinquency in these matters and criminal negligence in conducting the toxic
gas operations in Bhopal. As in the instant adjudication,
this Court is not concerned with the determination of the actual extent of
liability, we will proceed on the basis that the law enunciated by this Court
in M.C. Mehta's case (supra) is the decision upon the basis of which damages will
be payable to the victims in this case. But then the practical question arises:
what is the extent of actual damages payable, and how would the quantum of
damages be computed? Indeed, in this connection, it may be appropriate to refer
to the order passed by this Court on 3rd May, 1989 giving reasons why the settlement
was arrived at at the figure indicated. This Court had reiterated that it had
proceeded on certain prima facie undisputed figures of death and substantially
compensating personal injury. This Court has referred to the fact that the High
Court had proceeded on the broader principle in M.C. Mehta's case (supra) and
on the basis of the capacity of the enterprise because the compensation must
have deterrent effect. On that basis the High Court had proceeded to estimate
the damages on the basis of Rs.2 lakhs for each case of death and of total
permanent disability, Rs. 1 lakh for each case of partial permanent disability
and Rs.50,000 for each case or' temporary partial disability. In this connection,
the controversy as to what would have been the damages if the action had proceeded,
is another matter.
Normally,
in measuring civil liability, the law has attached more importance to the
principle of compensation than that of punishment. Penal redress, however,
involve both compensation to the person injured and punish681 ment as
deference. These problems were highlighted by the House of Lords in England in Rookes v. Barnard, [1964]AC
1129, which indicate the difference between aggravated and exemplary damages.
Salmond on the Law of Torts, 15th Edition at p. 30 emphasises that the function
of damages is compensation rather than punishment, but punishment cannot always
be ignored. There are views which are against exemplary damages on the ground
that these infringe in principle the object of law of torts, namely,
compensation and not punishment and these tend to impose something equivalent
to fine in criminal law without the safeguards provided by the criminal law. In
Rookes v. Barnard (supra), the House of Lords in England recognised three classes of cases in which the award of
exemplary damages was considered to be justifiable. Awards must not only, it is
said, compensate the parties but also deter the wrong doers and others from
similar conduct in future. The question of awarding exemplary or deterrent
damages is said to have often confused civil and criminal functions of law. Though
it is considered by many that it is a legitimate. encroachment of punishment in
the realm of civil liability, as it operates as a restraint on the
transgression of law which is for the ultimate benefit of the society. Perhaps,
in this case, had the action proceeded, one would have realised that the fall
out of this gas disaster might have been formulation of a concept of damages,
blending both civil and criminal liabilities. There are, however, serious
difficulties in evolving such an actual concept of punitive damages in respect
of a civil action which can be integrated and enforced by the judicial process.
It would have raised serious problems of pleading, proof and discovery, and
interesting and challenging as the task might have been, it is still very
uncertain how far decision based on such a concept would have been a decision
according to 'due process' of law acceptable by international standards. There
were difficulties in that attempt. But as the provisions stand these
considerations do not make the Act constitutionally invalid. These are matters
on the validity of settlement. The Act, as such does not abridges or curtail
damages or liability whatever that might be. So the challenge to the Act on the
ground that there has been curtailment or deprivation of the rights of the
victims which is unreasonable in the situation is unwarranted and cannot be
sustained.
93.
Mr. Garg tried to canvass before us the expanding of horizons of human rights.
He contended that the conduct of the multinational corporations dealing with
dangerous gases for the purpose of development specially in the conditions
prevailing under the Third world countries requires closer scrutiny and
vigilance on the part of emerging nations. He submitted that unless courts are
alert and active 682 in preserving the rights of the individuals and in
enforcing criminal and strict liability and in setting up norms compelling the
Govt. to be more vigilant and enforcing the sovereign will of the people of
India to oversee that such criminal activities which endanger even for the sake
of developmental work, economy and progress of the country, the health and
happiness of the people and damage the future prospects of health, growth and
affect and pollute the environment, should be curbed and, according to him,
these could only be curbed by insisting through the legal adjudication,
punitive and deterrent punishment in the form of damages. He also pleaded that
norms should be set up indicating how these kinds of dangerous operations are
to be permitted under conditions of vigilance and survillence.
While
we appreciate the force of these arguments, and endorse his plea that norms and
deterrence should be aspired for, it is difficult to correlate that aspect with
the present problem in this decision.
94. We
do reiterate, as mentioned in the Universal Declaration of Human Rights that
people are born free and the dignity of the persons must be recognised and an
effective remedy by competent tribunal is one of the surest method of effective
remedy. If, therefore, as a result of this tragedy new consciousness and
awareness on the part of the people of this country to be more vigilant about
measures and the necessity of ensuring more strict vigilance for permitting the
operations of such dangerous and poisonous gases dawn, then perhaps the tragic
experience of Bhopal would not go in vain.
95.
The main question, however, canvassed by all learned counsel for the victims
was that so far as the Act takes away the right of the victims to fight or
establish their own rights, it is a denial of access to justice, and it was
contended that such denial is so great a deprivation of both human dignity and
right to equality that it cannot be justified because it would be affecting
right to life, which again cannot be deprived without a procedure established
by law which is just, fair and reasonable.
96. On
this aspect, Shri Shanti Bhushan tried to urge before us that sections 3 &
4 of the Act. in so far as these enjoin and empower the Central Govt. to
institute or prosecute proceedings was only an enabling provision for the
Central Govt. and not depriving or disabling provisions for the victim. Ms.
Jaising sought to urge in addition, that in order to make the provisions
constitutionally valid, we should eliminate the concept of exclusiveness to the
Central Govt. and give the victims right to sue along with the Central Govt. We
are unable to accept these submissions.
683
97. In
our opinion, Sections 3 & 4 are categorical and clear. When the expression
is explicit, the expression is conclusive, alike in what it says and in what it
does not say. These give to the Central Government an exclusive right to act in
place of the persons who are entitled to make claim or have already made claim.
The expression 'exclusive' is explicit and significant. The exclusivily cannot
be whittled down or watered down as suggested by counsel. The said expression
must be given its full meaning and extent.
This
is corroborated by the use of the expression 'claim' for all purposes. If such
duality of rights are given to the Central Govt. along with the victims in
instituting or proceeding for the realisation or the enforcement of the claims
arising out of Bhopal gas leak disaster, then that would be so cumbersome that
it would not be speedy, effective or equitable and would not be the best or
more advantageous procedure for securing the claims arising out of the leakage.
In that view of the matter and in view of the language used and the purpose
intended to be achieved, we are unable to accept this aspect of the arguments
advanced on behalf of the victims. It was then contended that by the procedure
envisaged by the Act, the victims have been deprived and denied.their rights
and property to fight for compensation. The victims, it has been asserted, have
been denied access to justice. It is a great deprivation, it was urged. It was
contended that the procedure evolved under the Act for the victims is peculiar
and having good deal of disadvantages for the victims. Such special
disadvantageous procedure and treatment is unequal treatment, it was suggested.
It was, therefore, violative of Article 14 of the Constitution, that is the
argument advanced.
98.
The Act does provide a special procedure in respect of the rights of the
victims and to that extent the Central Government takes upon itself the rights
of the victims. It is a special Act providing a special procedure for a kind of
special class of victims. In view of the enormity of the disaster the victims
of the Bhopal gas leak disaster, as they were placed against the multinational
and a big Indian corporation and in view of the presence of foreign contingency
lawyers to whom the victims were exposed, the claimants and victims can
legitimately be described as a class by themselves different and distinct,
sufficiently separate and indentifiable to be entitled to special treatment for
effective, speedy, equitable and best advantageous settlement of their claims.
There indubitably is differentiation. But this differentiation is based on a
principle which has rational nexus with the aim intended to be achieved by this
differentiation. The disaster being unique in its character and in the recorded
history of industrial disasters situated as the victims were against a mighty
multinational with 684 the presence of foreign contingency lawyers. looming on
the scene, in our opinion, there were sufficient grounds for such
differentiation and different treatment. In treating the victims of the gas
leak disaster differently and providing them a procedure, which was just, fair,
reasonable and which was not unwarranted or unauthorised by the Constitution,
Article 14 is not breached. We are, therefore, unable to accept this criticism
of the. Act.
99.
The second aspect canvassed on behalf of the victims is that the procedure
envisaged is unreasonable and as such not warranted by the situation and cannot
be treated as a procedure which is just, fair and reasonable. The argument has
to be judged by the yardstick, as mentioned hereinbefore, enunciated by this
Court in State of Madras v. V.G. Rao, (supra). Hence, both the restrictions or
limitations on the substantive and procedural rights in the impugned
legislation will have to be judged from the point of view of the particular
Statute in question. No abstract rule or standard of reasonableness can be
applied. That question has to be judged having regard to the nature of the
rights alleged to have been infringed in this case, the extent and urgency of
the evil sought to be remedied, disproportionate imposition, prevailing
conditions at the time, all these facts will have to be taken into
consideration. Having considered the background, the plight of the
impoverished, the urgency of the victims' need, the presence of the foreign
contingency lawyers, the procedure of settlement in USA in mass action, the
strength for the foreign multinationals, the nature of injuries and damages,
and the limited but significant right of participation of the victims as
contemplated by s.4 of the Act, the Act cannot be condemned as unreasonable.
100.
In this connection, the concept of 'parens patriae' in jurisprudence may be
examined. It was contended by the learned Attorney General that the State had
taken upon itself this onus to effectively come in as parens patriae, we have
noted the long line of Indian decisions where, though in different contexts,
the concept of State as the parent of people who are not quite able to or
competent to fight for their rights or assert their rights, have been utilised.
It was contended that the doctrine of parens patriae cannot be applicable to
the victims. How the concept has been understood in this country as well as in America has been noted. Legal dictionaries
have been referred to as noted before. It was asserted on behalf of the victims
by learned counsel that the concept of 'parens patriae' can never be invoked
for the purpose of suits in domestic jurisdiction of any country. This can only
be applied in respect of the claims out of the 685 country in foreign
jurisdiction. It was further contended that this concept of 'parens patraie'
can only be applied in case of persons who are under disability and would not
be applicable in respect of those who are able to assert their own rights. It
is true that victims or their representatives are sui generis and cannot as
such due to age, mental capacity or other reason not legally incapable for
suing or pursuing the remedies for the rights yet they are at a tremendous
disadvantage in the broader and comprehensive sense of the term. These victims
cannot be considered to be any match to the multinational companies or the
Govt. with whom in the conditions that the victims or their representatives were
after the disaster physically, mentally, financially, economically and also
because of the position of litigation would have to contend. In such a
situation of predicament the victims can legitimately be considered to be
disabled. They were in no position by themselves to look after their own
interests effectively or purposefully. In that background, they are people who
needed the State's protection and should come within the umbrella of State's
sovereignty to assert, establish and maintain their rights against the wrong
doers in this mass disaster. In that perspective, it is jurisprudentially
possible to apply the principle of parens patriae doctrine to the victims. But
quite apart from that, it has to be borne in mind that in this case the State
is acting on the basis of the Statute itself. For the authority of the Central
Govt. to sue for and on behalf of or instead in place of the victims, no other
theory, concept or any jurisprudential principle is required than the Act
itself. The Act empowers and substitutes the Central Govt. It displaces the
victims by operation of Section 3 of the Act and substitutes the Central Govt.
in its place. The victims have been divested of their rights to sue and such
claims and such rights have been vested in the Central Govt. The victims have
been divested because the victims were disabled. The disablement of the victims
vis-a-vis their adversaries in this matter is a self-evident factor. If that is
the position then, in our opinion, even if the strict application of the 'parens
patriae' doctrine is not in order, as a concept it is a guide. The jurisdiction
of the State's power cannot be circumscribed by the limitations of the
traditional concept of parens patriae. Jurisprudentially, it could be utilised
to suit or alter or adapt itself in the changed circumstances. In the situation
in which the victims were, the State had to assume the role of a parent
protecting the rights of the victims who must come within the protective
umbrella of the State and the common sovereignty of the Indian people. As we
have noted the Act is an exercise of the sovereign power of the State. It is an
appropriate evolution of the expression of sovereignty in the situation that
had arisen. We must recognize and accept it as such.
686
101. But this right and obligation of the State has another aspect. Shri Shanti
Bhushan has argued and this argument has also been adopted by other learned
counsel appearing for the victims that with the assumption by the State of the
jurisdiction and power as a parent to fight for the victims in the situation
there is an imcumbent obligation on the State, in the words of Judge Keenan,
'as a matter of fundamental human decency' to maintain the victims until the
claims are established and realised from the foreign multinationals. The major
inarticulate premise apparent from the Act and the scheme and the spirit of the
Act is that so long as the rights of the victims are prosecuted the State must
protect and preserve the victims.
Otherwise
the object of the Act would be defeated, its purpose frustrated. Therefore,
continuance of the payments of the interim maintenance for the continued
sustenance of the victims is an obligation arising out of State's assumption of
the power and temporary deprivation of the rights of the victims and
divestiture of the rights of the victims to fight for their own rights. This is
the only reasonable interpretation which is just, fair and proper. Indeed, in
the language of the Act there is support for this interpretation. Section 9 of
the Act gives power to the Central Govt. to frame by notification, a scheme for
carrying into effect the purposes of the Act. Sub-section (2) of Section 9
provides for the matters for which the scheme may provide.
Amongst
others, clause (d) of Section 9(2) provides for creation of a fund for meeting
expenses in connection with the administration of the Scheme and of the
provisions of the Act; and clause (e) of Section 9(2) covers the amounts which
the Central Govt. "may after due appropriation made by Parliament by law
in that behalf, credit to the fund referred to in clause (d) and any other
amounts which may be credited to such fund". Clause (f) of Section 9(2)
speaks of the utilisation, by way of disbursal (including apportionment) or
otherwise, of any amounts received in satisfaction of the claims. These
provisions are suggestive but not explicit. Clause (b) of Section 10 which
provides that in disbursing under the scheme the amount received by way of
compensation or damages in satisfaction of a claim as a result of the
adjudication or settlement of the claim by a court or other authority,
deduction shall be made from such amount of the sums, if any, paid to the
claimant by the Govt. before the disbursal of such amount. The Scheme framed is
also significant. Clause 10 of the Scheme provides for the claims and relief
funds and includes disbursal of amounts as relief including interim relief to
persons affected by the Bhopal gas leak disaster and Clause 11(1) stipulates
that disbursal of any amounts under the scheme shall be made by the Deputy
Commissioner to each claimant through credit in a bank or postal saving
account, stressing that the legislative policy underlined 687 the Bhopal Act
contemplated payment of interim relief till such time as the' Central Govt. was
able to recover from the Union Carbide full amount of compensation from which
the interim reliefs already paid were to be deducted from the amount payable to
them for the final disbursal. The Act should be construed as creating an
obligation oh the Central Govt. to pay interim relief as the Act deprives the
victims of normal and immediate right of obtaining compensation from the Union
Carbide. Had the Act not been enacted, the victims could have and perhaps would
have been entitled not only to sue the Union Carbide themselves, but also to
enter into settlement or compromise of some sort with them. The provisions of
the Act deprived the victims of that legal right and opportunity, and that
deprivation is substantial deprivation because upon immediate relief depends
often the survival of these victims. In that background, it is just and proper
that this deprivation is only to be justified if the Act is read with the
obligation of granting interim relief or maintenance by the Central Government
until the full amount of the dues of the victims is realised from the Union
Carbide after adjudication or settlement and then deducting therefrom the
interim relief paid to the victims.
As
submitted by learned Attorney General, it is true that there is no actual
expression used in the Act itself which expressly postulates or indicates such
a duty or obligation under the Act. Such an obligation is, however, inherent
and must be the basis of properly construing the spirit of the Act. In our
opinion, this is the true basis and will be in consonance with the spirit of
the Act. It must be, to use the well-known phrase 'the major inarticulate
premise' upon which though not expressly stated, the Act proceeds. It is on
this promise or premise that the State would be justified in taking upon itself
the right and obligation to proceed and prosecute the claim and deny access to
the courts of law to the victims on their own. If it is only so read, it can
only be held to be constitutionally valid. It has to be borne in mind that the
language of the Act does not militate against this construction but on the
contrary, Sections 9, 10 and the scheme of the Act suggest that the Act
contains such an obligation. If it is so read, then only meat can be put into
the skeleton of the Act making it meaningful and purposeful. The Act must,
therefore, be so read. This approach to the interpretation of the Act can
legitimately be called the 'constructive intuition' which, in our opinion, is a
permissible mode of viewing the Acts of Parliament. The freedom to search for
'the spirit of the Act' or the quantity of the mischief at which it is aimed
(both synonymous for the intention of the parliament) opens up the possibility
of liberal interpretation "that delicate and important branch of judicial
power, the concession of which is dangerous, the denial ruinous". Given
this freedom it is a rare 688 opportunity though never to be misused and
challenge for the Judges to adopt and give meaning to the Act, articulate and
inarticulate, and thus translate the intention of the Parliament and fulfil the
object of the Act. After all, the Act was passed to give relief to the victims
who, it was thought, were unable to establish their own rights and fight for
themselves. it is common knowledge that the victims were poor and impoverished.
How could they survive the long ordeal of litigation and ultimate execution of
the decree or the orders unless provisions be made for their sustenance and
maintenance, especially when they have been deprived of the fight to fight for
these claims themselves? We, therefore, read the Act accordingly.
102.
It was, then, contended that the Central Govt. was not competent to represent
the victims. This argument has been canvassed on various grounds. It has been
urged that the Central Govt. owns 22% share in UCIL and as such there is a
conflict of interest between the Central Govt. and the victims, and on that
ground the former is disentitled to represent the latter in their battle
against UCC and UCIL. A large number of authorities on this aspect were cited.
However,
it is not necessary in the view we have taken to deal with these because
factually the Central Govt. does not own any share in UCIL. These are the
statutory independent organisations, namely, Unit Trust of India and Life
Insurance Corporation, who own 20 to 22% share in UCIL. The Govt. has certain
amount of say and control in LIC and UTI. Hence, it cannot be said, in our
opinion, that there is any conflict of interest in the real sense of the matter
in respect of the claims of Bhopal gas
leak disaster between the Central Govt. and the victims. Secondly, in a
situation of this nature, the Central Govt. is the only authority which can
pursue and effectively represent the victims. There is no other organisation or
Unit which can effectively represent the victims. Perhaps, theoretically, it
might have been possible to constitute another independent statutory body by
the Govt. under its control and supervision in whom the claim of the victims
might have been vested and substituted and that Body could have been entrusted
with the task of agitating or establishing the same claims in the same manner
as the Central Govt. has done under the Act. But the fact that that has not
been done, in our opinion, does not in any way affect the position. Apart from
that, lastly, in our opinion, this concept that where there is a conflict of
interest, the person having the conflict should not be entrusted with the task
of this nature, does not apply in the instant situation. In the instant case,
no question of violation of the principle of natural justice arises, and there
is no scope for the application of the principle that no man should be a Judge
in his own cause. The Central 689 Govt. was not judging any claim, but was
fighting and advancing the claims-of the victims. In those circumstances, it
cannot be said that there was any violation of the principles of natural
justice and such entrustment to the Central Govt. of the right to ventilate for
the victims was improper or bad. The adjudication would be done by the courts,
and therefore there is no scope of the violation of any principle of natural
justice.
103.
Along with this submission, the argument was that the power and the right given
to the Central Govt. to fight for the claims of the victims, is unguided and
uncanalised.
This
submission cannot be accepted. Learned Attorney General is right that the power
conferred on the Central Govt. is not uncanalised. The power is circumscribed
by the purpose of the Act. If there is any improper exercise or transgression
of the power then the exercise of that power can be called in question and set
aside, but the Act cannot be said to be violative of the rights of the victims
on that score.
We
have noted the relevant authorities on the question that how power should be
exercised is different and separate from the question whether the power is
valid or not. The next argument on behalf of the victims was that there was
conflict of interest between the victims and the Govt. viewed from another
aspect of the matter. It has been urged that the Central Govt. as well as the
Govt. of Madhya Pradesh along with the erstwhile Chief Minister of the State of
Madhya Pradesh Shri
Arjun Singh were
guilty of negligence, malfeasance and non-feasance, and as such were liable for
damages along with Union Carbide and UCIL. In other words, it has been said
that the Govt. of India and the Govt. of Madhya Pradesh along with Mr. Arjun
Singh are joint tortfeasors and joint wrong doers. Therefore. it was urged that
there is conflict of interest in respect of the claims arising out of the the
gas leak disaster between the Govt.
of India and the victims and in such a
conflict, it is improper, rather illegal and unjust to vest in the Govt. of
India the rights and claims of the victims. As noted before, the Act was passed
in a particular background and, in our opinion, if read in that background,
only covers claims against Union Carbide or UCIL. "Bhopal gas leak
disaster" or "disaster" has been defined in clause (a) of
Section (2) as the occurrence on the 2nd and 3rd days of December, 1984 which
involved the release of highly noxious and abnormally dangerous gas from a
plant in Bhopal (being a plant of the UCIL, a subsidiary of the UCC of U.S.A.)
and which resulted in loss of life and damage to property on an extensive
scale.
690
104. In this context, the Act has to be understood that it is in respect of the
person responsible, being the person in-charge-of the UCIL and the parent
company UCC. This interpretation of the Act is further strengthened by the fact
that a "claimant" has been defined in clause (c) of Section 2 as a
person who is entitled to make a claim and the expression "person" in
Section 2(e) includes the Govt.
Therefore,
the Act proceeded on the assumption that the Govt. could be a claimant being a
person as such. Furthermore, this construction and the perspective of the Act is
strengthened if a reference is made to the debate both in the Lok Sabha and
Rajya Sabha to which references have been made.
105.
The question whether there is scope for the Union of India being responsible or
liable as a joint tort feasor is a difficult and different question. But even
assuming that it was possible that the Central Government might be liable in a
case of this nature, the learned Attorney General was right in contending that
it was only proper that the Central Government should be able and authorised to
represent the victims. In such a situation, there will be no scope of the
violation of the principles of natural justice.
The
doctrine of necessity would be applicable in a situation of this nature. The
doctrine has been elaborated, in Halsbury's Laws of England, 4th Edition, p,
89, paragraph 73, where it was reiterated that even if all the members of the
Tribunal competent to determine a matter were subject to disqualification, they
might be authorised and obliged to hear that matter, by virtue of the operation
of the common law doctrine of necessity,, An adjudicator who is subject to
disqualification on the ground of bias or interest in the matter which he has
to decide may in certain circumstances be required to adjudicate if there is no
other person who is competent or authorised to be adjudicator or if a quorum
cannot be formed without him or if no other competent tribunal can be
constituted. In the circumstances of the case, as mentioned hereinbefore, the
Government of India is only capable to represent the victims as a party. The
adjudication, however, of the claims would be done by the Court. In those
circumstances, we are unable to accept the challenge on the ground of the
violation of principles of natural justice on this score. The learned Attorney
General, however, sought to advance, as we have indicated before, his
contention on the ground of de facto validity. He referred to certain decisions.
We are of the opinion that this principle will not be applicable. We are also
not impressed by the plea of the doctrine of bona fide representation of the
interests of victims in all these proceedings. We are of the opinion that the
doctrine of bonafide representation would not be quite relevant and as 691 such
the decisions cited by the learned Attorney General need not be considered.
106.
There is, however, one other aspect of the matter which requires consideration.
The victims can be divested of their rights i.e. these can be taken away from
them provided those rights of the victims are ensured to be established and
agitated by the Central Govt. following the procedure which would be just, fair
and reasonable. Civil Procedure Code is the guide which guides civil
proceedings in this country and in other countries procedure akin to Civil
Procedure Code. Hence, these have been recognised and accepted as being in
consonance with the fairness of the proceedings and in conformity with the
principles of natural justice. Therefore, the procedure envisaged under the Act
has to be judged whether it is so consistent. The Act, as indicated before. has
provided the procedure under sections 3 and 4. Section 11 provides that the
provisions of the Act and of any Scheme flamed there under shall have effect
notwithstanding anything inconsistent therewith contained in any enactment
other than the Act or any instrument having effect by virtue of any enactment
other than the Act. Hence, if anything is inconsistent with the Act for the
time being, it will not have force and the Act will override those provisions
to the extent it does. The Act has not specifically contemplated any procedure
to be followed in the action to be taken pursuant to the powers conferred under
section 3 except to the extent indicated in section 4 of the Act. Section 5,
however, authorises the Central Government to have the powers of a civil court
for the purpose of discharging the functions pursuant to the authority vested
under sections 3 and 4 of the Act. There is no question of Central Government
acting as a court in respect of the claims which it should enforce for or on
behalf or instead of the victims of the Bhopal gas leak disaster. In this connection, it is necessary to note that it
was submitted that the Act, so far as it deals with the claims of the victims,
should be read in conformity with Civil Procedure Code and/or with the
principles of natural justice; and unless the provisions of/the Act are so read
it would be violative of Articles 14 and 21 of the Constitution in the sense
that there will be deprivation of rights to/fife and liberty without following
a procedure which is just, fair and reasonable. That is the main submission and
contention of the different counsel for the victims who have appeared.
The
different view points from which this contention has been canvassed have been
noted before. On the other hand, on behalf of the Government, the learned
Attorney General has canvassed before us that there were sufficient safeguards
consistent with the principles of natural justice within this Act and beyond
what has been provided for 692 in a situation for which the Act was enacted,
nothing more could be provided and further reading down the provisions of the
Act in the manner suggested would defeat the purpose of the Act. The aforesaid
section 3 provides for the substitution of the Central Government with the'
right to represent and act in place of (whether within or outside India) every
person who has made, or is entitled to make, a claim in respect of the
disaster. The State has taken over the rights and claims of the victims in the
exercise of sovereignty in order to discharge the constitutional obligations as
the parent and guardian of the victims who in the situation as placed needed the
umbrella of protection. Thus, the State has the power and jurisdiction and for
this purpose unless the Act is otherwise unreasonable or violative of the
constitutional provisions, no question of giving a hearing to the parties for
taking over these fights by the State arises. For legislation by the
Parliament, no principle of natural justice is attracted provided such
legislation is within the competence of the legislature, which indeed the
present Act is within the competence of the Parliament. We are in agreement
with the submission of the learned Attorney General that section 3 makes the
Central Government the dominus litis and it has the carriage of the
proceedings, but that does not solve the problem of by what procedure the
proceedings should be carried.
107.
The next aspect is that section 4 of the Act, which, according to the learned
Attorney General gives limited rights to the victims in the sense that it
obliges the Central Government to have due regard to any matters which such
person may require to be urged with respect to his claim and shall, if such
person so desires, permit at the expense of such person, a legal practitioner
of his choice to be associated in the conduct of any suit or other proceeding
relating to his claim". Therefore, it obliges the Central Government to
have 'due regard' to any matters, and it was urged on behalf of the victims
that this should be read in order to make the provisions constitutionally valid
as providing that the victims will have a say in the conduct of the proceedings
and as such must have an opportunity of knowing what is happening either by
instructing or giving Opinions to the Central Government and/or providing for
such directions as to settlement and other matters. In other words, it was
contended on behalf of the victims that the victims should be given notice of
the proceedings and thereby an opportunity, if they so wanted, to advance their
view: and that to make the provisions of s. 4 meaningful and effective unless
notice was given to the victim, disabled as he is, the assumption upon which
the Act has been enacted, could not come and make suggestion in the
proceedings. If the victims are not informed and given no opportunity, the
purpose of s. 4 cannot be attained.
693
108. On the other hand, the learned Attorney General suggested that s. 4 has
been complied with, and contended that the victims had notice of the
proceedings. They had knowledge of the suit in America, and of the order passed by Judge Keenan. The private
plaintiffs who had gone to America were
represented by foreign contingency lawyers who knew fully well what they were
doing and they had also joined the said suit along with the Government of
India. Learned Attorney General submitted that s. 4 of the Act clearly. enabled
the victims to exercise their right of participation in the proceedings.
According to him, there was exclusion of victims from the process of
adjudication but a limited participation was provided and beyond that
participation no further participation was warranted and no further notice was
justfied either by the provisions of the Act as read with the constitutional
requirements or under the general principles of natural justice. He submitted
that the principles of natural justice cannot be put into strait jacket and their
application would depend upon the particular facts and the circumstances of a
situation. According to the learned Attorney General, in the instant case, the
legislature had formulated the area where natural justice could be applied, and
upto what area or stage there would be association of the victims with the
suit, beyond that no further application of any principle of natural justice
was contemplated.
109.
The fact that the provisions of the principles of natural justice have to be
complied with, is undisputed.
This
is well-settled by the various decisions of the Court.
The
Indian Constitution mandates that clearly, otherwise the Act and the actions
would be violative of Article 14 of the Constitution and would also be
destructive of Article 19(1)(g) and negate Article 21 of the Constitution by
denying a procedure which is just, fair and reasonable. See in this connection,
the observations of this Court in Maneka Gandhi's case (supra) and Olga
Tellis's case (supra). Some of these aspects were noticed in the decision of
this Court in Swadeshi Cotton Mills v. Union of India (supra). That was a
decision which dealt with the question of taking over of the industries under
the Industries (Development and Regulation) Act, 1951. The question that arose
was whether it was necessary to observe the rules of natural justice before
issuing a notification under section 18A(1) of the Act. It was held by the
majority of Judges that in the facts of that case there had been non-compliance
with the implied requirement of the audi alteram partem rule of natural justice
at the pre-decisional stage. The order in that case could be struck down as
invalid on that score but the court found that in view of the concession a
heating would be afforded to the company, the case was remitted 694 to the
Central Government to give a full, fair and effective hearing. It was held that
the phrase 'natural justice' is not capable of static and precise definition.
It could not be imprisoned in the straight-jacket or a cast-iron formula.
Rules
of natural justice are not embodied rules. Hence, it was not possible to make
an exhaustive catalogue of such rules. This Court reiterated that audi ateram
partem is a highly effective rule devised by the Courts to ensure that a
statutory authority arrives at a just decision and it is calculated to act as a
healthy check on the abuse or misuse of power. The rules of natural justice can
operate only in areas not covered by any law validly made. The general
principle as distinguished from an absolute rule of uniform application seems
to be that where a statute does not in terms exclude this rule of prior hearing
but contemplates a post-decisional hearing amounting to a full review of the
original order on merits then such a statute would be construed as excluding
the audi alteram partem rule at the pre-decisional stage. If the statute
conferring the power is silent with regard to the giving of a pre-decisional
hearing to the person affected the administrative decision after
post-decisional hearing was good.
110.
The principles of natural justice have been examined by this Court in Union of
India & Anr. v. Tulsi Ram Patel & Ors., (supra). It was reiterated,
that the principles of natural justice are not the creation of Article 14 of
the Constitution. Art. 14 is not the begetter of the principles of natural
justice but their constitutional guardian. The principles of natural justice
consist, inter alia, of the requirement that no man should be condemned
unheard. If, however, a legislation or a Statute expressly or by necessary
implication excludes the application of any particular principle of natural
justice then it requires close Scrutiny of the Court.
111.
It has been canvassed on behalf of the victims that the Code of Civil Procedure
is an instant example of what is a just, fair and reasonable procedure, at
least the principles embodied therein and the Act would be unreasonable if
there is exclusion of the victims to vindicate properly their views and rights.
This exclusion may amount to denial of justice. In any case, it has been
suggested and in our opinion, there is good deal of force in this contention,
that if a part of the claim, for good reasons or bad, is sought to be
compromised or adjusted without at least considering the views of the victims
that would be unreasonable deprivation of the rights of the victims. After all,
it has to be borne in mind that injustice consists in the sense in the minds of
the people affected by any act or inaction a feeling that their grievances. views
or claims have gone 'unheeded or not considered. Such a 695 feeling is in
itself an injustice or a wrong. The law must,be so construed and implemented
that such a feeling does not generate among the people for whose benefit the
law is made. Right to a hearing or representation before entering into a
compromise seems to be embodied in the due process of law understood in the
sense the term has been used in the constitutional jargon of this country
though perhaps not originally intended. In this connection, reference may be
made to the decision of this Court in Sangram Singh v. Election Tribunal,
Kotah, [1955] 2 SCR 1. The Representation of the People Act, 1951 contains
section 90 and the procedure of Election Tribunals under the Act was governed
by the said provision. Sub-section (2) of section 90 provides that
"Subject to the provisions of this Act and of any rules made thereunder,
every election petition shall be tried by the Tribunal, as nearly as may be, in
accordance with the procedure applicable under the Code of Civil Procedure,
1908 to the trial of suits". Justice Bose speaking for the court said that
it is procedure, something designed to facilitate justice and further its ends,
and cannot be considered as a penal enactment for punishment or penalties; not
a thing designed to trip people up rather then help them. It was reiterated
that our laws of procedure are grounded on the principle of natural justice
which requires that men should not be condemned unheard, that decisions should
not be reached behind their backs, that proceedings that affect their lives and
property should not continue in their absence and that they should not be
precluded from participating in them. Of course, there may be exceptions and
where they are clearly defined these must be given effect to. But taking by and
large, and subject to that proviso, our laws of procedure should be construed,
wherever that is reasonably possible, in the light of that principle. At page 9
of the report, Justice Bose observed as under:
"But
that a law of natural justice exists in the sense that a party must be heard in
a Court of laW, or at any rate be afforded an opportunity to appear and defend
himself, unless there is express provision to the contrary, is, we think,
beyond dispute. See the observations of the Privy Council in Balakrishna Udayar
v. Vasudeva Ayyar, (ILR 40 Mad. 793, 800) and especially in T.M. Barter v.
African Products Ltd., (AIR 1928 PC 261) where Lord Buckmaster said "no
forms or procedure should ever be permitted to exclude the presentation of a
litigant's defence". Also Hari Vishnu's case which we have just quoted.
In our
opinion, Wallace J. was right in Venkatasubbiah v. 696 Lakshminarasimham, (AIR
1925 Mad. 1274) in holding that "One cardinal principle to be observed in
trials by a Court obviously is that a party has a right to appear and plead his
cause on all occasions when that cause comes on for hearing", and that
"It follows that a party should not be deprived of that right and in fact
the Court has no option to refuse that right, unless the Code of Civil
Procedure deprives him of it".
112.
All civilised countries accept the right to be heard as part of the due process
of law where questions affecting their rights, privileges or claims are
considered or adjudicated.
113.
In S.L. Kapoor v. Jagmohan & Ors., [1981] 1 SCR 746 at 765, Chinnappa
Reddy, J. speaking for this Court observed that the concept that justice must
not only be done but must manifestly be seen to be done, is basic to our
system. It has been reiterated that the principles of natural justice know of
no exclusionary rule dependent on whether it would have made any difference if
natural justice had been observed. The non-observance of natural justice is
itself prejudice to any man and proof of prejudice independently of proof of denial
of natural justice is unnecessary and it has been said that it will come from a
person who has denied justice that the person who has been denied justice, is
not prejudiced. Principles of natural justice must, therefore, be followed.
That is the normal requirement:
114.
In view of the principles settled by this Court and accepted all over the
world, we are of the opinion that in case of this magnitude and nature, when
the victims have been given some say by Section 4 of the Act, in order to make
that opportunity contemplated by section 4 of the Act, meaningful and
effective, it should be so read that the victims have to be given an
opportunity of making their representation before the court comes to any
conclusion in respect of any settlement. How that opportunity should be given,
would depend upon the particular situation. Fair procedure should be followed
in a representative mass tort action. There are instances and some of these
were also placed before us during the hearing of these matters indicating how
the courts regulate giving of the notice in respect of a mass action where
large number of people's views have to be ascertained. Such procedure should be
evolved by the court when faced with such a situation.
115.
The Act does not expressly exclude the application of the 697 Code of Civil
Procedure. Section 11 of the Act provides the overriding effect indicating that
anything inconsistent with the provisions of the Act in other law including the
Civil Procedure Code should be ignored and the Act should prevail.
Our
attention was drawn to the provisions of Order 1 Rule 8(4) of the Code.
Strictly speaking, Order 1 Rule 8 will not apply to a suit or a proceeding
under the Act. It is not a case of one having common interest with others. Here
the plaintiff, the Central Govt. has replaced and divested the victims.
116.
Learned Attorney General submitted that as the provisions of the Code stood
before 1976 Amendment, the High Courts had taken the view that hearing of the
parties represented in the suit, was not necessary, before compromise.
Further
reference was made to proviso to Order XXIII Rule 1.
As in
this case there is no question, in our opinion, of abandonment as such of the
suit or part of the suit, the provisions of this Rule would also not strictly
apply.
However,
Order XXIII Rule 3B of the Code is an important and significant pointer and the
principles behind the said provision would apply to this case. The said rule 3B
provides that no agreement or compromise in a representative suit shall be entered
into without the leave of the court expressly recorded in the proceedings; and
sub-rule (2) of rule 3B enjoins that before granting such leave the court shall
give notice in such manner as it may think fit in a representative action.
Representative suit, again, has been defined under Explanation to the said rule
vide clause (d) as any other suit in which the decree passed may, by virtue of
the provisions of this Code or of any other law for the time being in force,
bind any person who is not named as party to the suit. In this case,
indubitably the victims would be bound by the settlement though not named in
the suit. This is a position conceded by all. If that is so, it would be a
representative suit in terms of and for the purpose of Rule 3B of Order XXIII
of the Code. If the principles of this rule are the principles of natural
justice then we are of the opinion that the principles behind it would be
applicable; and also that section 4 should be so construed in spite of the
difficulties of the process of notice and other difficulties of making
"informed decision making process cumbersome", as canvassed by the
learned Attorney General.
117.
In our opinion, the constitutional requirements, the language of the Section,
the purpose of the Act and the principles of natural justice lead us to this
interpretation of Section 4 of the Act that in case of a proposed or
contemplated settlement, notice should be given to the victims who are affected
or whose rights are to be affected to ascertain their views. Section 4 is
significant. It enjoins the Central 698 Govt. only to have "due regard to
any matters which such person may require to be urged". So, the obligation
is on the Central Govt. in the situation contemplated by Section 4 to have due
regard to the views of the victims and that obligation cannot be discharged by
the Central Govt. unless the victims are told that a settlement is proposed,
intended or contemplated. It is not necessary that such views would require
consent of all the victims. The Central Govt. as the representative of the
victims must have the views of the victims and place such views before the
court in such manner it considers necessary before a settlement is entered
into.
If the
victims want to advert to certain aspect of the matter during the proceedings
under the Act and settlement indeed is an important stage in the proceedings,
opportunities must be given to the victims. Individual notices may not be
necessary. The Court can, and in our opinion, should in such situation
formulate modalities of giving notice and public notice can also be given
inviting views of the victims by the help of mass media.
118.
Our attention was drawn to similar situations in other lands , where in mass
disaster actions of the present type or mass calamity actions affecting large
number of people, notices have been given in different forms and it may be
possible to invite the views of the victims by announcement in the media,
Press, Radro, and TV etc. intimating the victims that a certain settlement is
proposed or contemplated and inviting views of the victims within a stipulated
period. And having regard to the views, the Central Govt. may proceed with the
settlement of the action. Consent of all is not a pre-condition as we read the
Act under Section 4. Hence, the difficulties suggested by the learned Attorney
General in having the consent of all and unanimity, do not really arise and
should not deter us from construing the section as we have.
119.
The next aspect of the matter is, whether in the aforesaid light Section 4 has
been complied with. The fact that there was no Learned Attorney General,
however, sought to canvas the view that the victims had notice and some of them
had participated in the proceedings. We are, however, unable to accept the
position that the victims had notice of the nature contemplated under the Act
upon the underling principle of Order XXIII Rule 3B of the Code. It is not
enough to say that the victims must keep vigil and watch the proceeding. One
assumption under which the Act is justified is that the victims were disabled
to defend themselves in an action of this type. If that is so, then the Court
cannot presume that the victims were a lot, capable 699 and informed to be able
to have comprehended or contemplated the settlement. In the aforesaid view of
the matter, in our opinion, notice was necessary. The victims at large did not
have the notice.
120.
The question, however, is that the settlement had been arrived at after great
deal of efforts to give immediate relief to the victims. We have noticed the
order dated 4th May, 1989 passed by this Court indicating the reasons which
impelled the Court to pass the orders on 14/15th February, 1989 in terms and
manner as it did. It has been urged before us on behalf of some of the victims that
justice has not been done to their views and claims in respect of the damages
suffered by them. It appears to us by reading the reasons given by this Court
on 4th May, 1989 that justice perhaps has been done but the question is, has
justice appeared to have been done and more precisely, the question before this
Court is: does the Act envisage a procedure or contemplate a procedure which
ensures not only that justice is done but justice appears to have been done. If
the procedure does not ensure that justice appears to have been done, is it
valid? Therefore, in our opinion, in the background of this question we must
hold that Section 4 means and entails that before entering into any settlement
affecting the rights and claims of the victims some kind of notice or
information should be given to the victims; we need not now spell out the
actual notice and the manner of its giving to be consistent with the mandate
and purpose of section 4 of the Act.
121.
This Court in its order dated 4th May, 1989 had stated that in passing orders
on 14th/15th February, 1989, this Court was impelled by the necessity of urgent
relief to the victims rather than to depend upon the uncertain promise of law.
The Act, as we have construed, requires notice to be given in what form and in
what manner, it need not be spelled out, before entering into any settlement of
the type with which we are concerned. It further appears that that type of
notice which is required to be given had not been given. The question,
therefore, is what is to be done and what is the consequence? The Act would be
bad if it is not construed in the light that notice before any settlement under
S. 4 of the Act was required to be given. Then arises the question of
consequences of not giving the notice. In this adjudication, we are not
strictly concerned with the validity or otherwise of the settlement, as we have
indicated hereinbefore. But constitutional adjudication cannot be divorced from
the reality of a situation, or the impact of an adjudication. Constitutional
deductions are never made in the vacuum. These deal with life's problems in the
reality of a given situation. And no constitutional adjudication is also
possible unless 700 one is aware of the consequences of such an adjudication.
One
hesitates in matters of this type where large consequences follow one way or
the other to put as under what others have put together. It is well to
remember, as did Justice Holmes, that time has upset many fighting faiths and
one must always wagar one's salvation upon some prophecy based upon imperfect
knowledge. Our knowledge changes; our perception of truth also changes. It is
true that notice was required to be given and notice has not been given. The
notice which we have contemplated is a notice before the settlement or what is
known in legal terminology as 'predecisional notice'. But having regard to the
urgency of the situation and having regard to the need for the victims for
relief and help and having regard to the fact that so much effort has gone in
finding a basis for the settlement, we, at one point of time, thought that a
post-decisional hearing in the facts and circumstances of this case might be
considered to be sufficient compliance with the requirements of principles of
natural justice as embodied under s. 4 of the Act. The reasons that impelled
this Court to pass the orders of 14th/15th February, 1989 are significant and
compelling.
If
notice was given, then what would have happened? It has been suggested on
behalf of the victims by counsel that if the victims had been given an
opportunity to be heard, then they would have perhaps pointed out, inter alia,
that the amount agreed to be paid through the settlement was hopelessly
inadequate. We have noted the evidence available to this Court which this Court
has recorded in its order dated 4th May, 1989 to be the basis for the figure at which the settlement was
arrived at. It is further suggested that if an opportunity had been given
before the settlement, then the victims would have perhaps again pointed out
that criminal liability could not be absolved in the manner in which this Court
has done on the 14th/l5th February, 1989. It was then contended that the
Central Government was itself sued as a joint tort feasor. The Central
Government would still be liable to be proceeded in respect of any liability to
the victims if such a liability is established; that liability is in no way
abridged or affected by the Act or the settlement entered into. It was
submitted on behalf of the victims that if an opportunity had been given, they
would have perhaps pointed out that the suit against the Central Government,
Government of Madhya Pradesh and UCIL could not have been settled by the
compromise. It is further-suggested that if given an opportunity, it would have
been pointed out that the UCIL should have also been sued. One of the important
requirements of justice is that people affected by an action or inaction should
have opportunity to have their say. That opportunity the victims have got when
these applications were heard and they were heard after utmost publicity and
they would have further 701 opportunity when review application against the
settlement would be heard.
122.
On behalf of the victims, it was suggested that the basis of damages in view of
the observations made by this Court in M.C. Mehta's case (supra) against the
victims of UCC or UCIL would be much more than normal damages suffered in
similar case against any other company or party which is financially not so
solvent or capable. It was urged that it is time in order to make damages
deterrent the damages must be computed on the basis of the capacity of a
delinquent made liable to pay such damages and on the monitory capacity of the
delinquent the quantum of the damages awarded would vary and not on the basis of
actual consequences suffered by the victims. This is an uncertain promise of
law. On the basis of evidence available and on the basis of the principles so
far established, it is difficult to foresee any reasonable possibility of
acceptance of this yardstick. And even if it is accepted, there are numerous
difficulties of getting that view accepted internationally as a just basis in
accordance with law. These, however, are within the realm of possibility.
123.
It was contended further by Shri Garg, Shri Shanti Bhushan and Ms. Jaising that
all the further particulars upon which the settlement had been entered into
should have been given in the' notice which was required to be given before a
settlement was sanctified or accepted. We are unable to accept this position.
It is not necessary that all other particulars for the basis of the proposed
settlement should be disclosed in a suit of this nature before the final
decision. Whatever data was already there have been disclosed, that, in our
opinion, would have been sufficient for the victims to be able to give their
views, if they want to. Disclosure of further particulars are not warranted by
the requirement of principles of natural justice. Indeed, such disclosure in
this case before finality might jeopardise luther action, if any, necessary so
consistent with justice of the case.
124.
So on the materials available, the victims would have to express their views.
The victims have not been able to show at all any other point or material which
would go to impeach the validity of the settlement. Therefore, in our opinion,
though settlement without notice is not quite proper, on the materials so far
available, we are of the opinion that justice has been done to the victims but
justice has not appeared to have been done. In view of the magnitude of the
misery involved and the problems in this case, we are also of the opinion that
the setting aside of the settlement on this ground in view of the facts 702 and
the circumstances of this case keeping the settlement in abeyance and giving
notice to the victims for a post-decisional hearing would not be in the
ultimate interest of justice. It is true that not giving notice, was not proper
because principles of natural justice are fundamental in the constitutional set
up of this country. No man or no man's right should be affected without an
opportunity to ventilate his views. We are also conscious that justice is a
psychological yearning, in which men seek acceptance of their view point by
having an opportunity of vindication of their view point before the forum or
the authority enjoined or obliged to take a decision affecting their right.
Yet, in the particular situations, one has to bear in mind how an infraction of
that should be sought to be removed is accordance with justice. In the facts
and the circumstances of this case where sufficient opportunity is available
when review application is heard on notice, as directed by Court, no further
opportunity is necessary and it cannot be said that injustice has been done. "To
do a great right" after all, it is permissible sometimes "to do a
little wrong". In the facts and circumstances of the case, this is one of
those rare occasions. Though entering into a settlement without the required
notice is wrong, in the facts and the circumstances of this case, therefore, we
are of the opinion, to direct that notice should be given now, would not result
in dain justice in the situation. In the premises, no further consequential
order is necessary by this Court. Had it been necessary for this Bench to have
passed such a consequential order, we would not have passed any such
consequential order in respect of the same.
125.
The sections and the scheme dealing with the determination of damages and
distribution of the amount have also been assailed as indicated before. Our
attention was drawn to the provisions of the Act dealing with the payment of
compensation and the scheme framed therefore. It was submitted that section 6
of the Act enjoins appointment by the Central Government of an officer known as
the Commissioner for the welfare of the victims. It was submitted that this
does not give sufficient judicial authority to the officer and would be really
leaving the adjudication under the scheme by an officer of the executive
nature. Learned Attorney General has, however, submitted that for disbursement
of the compensation contemplated under the Act or under the orders of this
Court, a notification would be issued under section 6(3) of the Act authorising
the Commissioner or other officers to exercise all or any of the powers which
the Central Government may exercise under section 6 to enable the victims to
place before the Commissioner or Deputy Commissioner any additional evidence
that they would like to adduce. We direct so, and such appropriate notifica703
tion be issued. We further direct that in the scheme of categorisation to be
done by the Deputy Commissioner should be appealable to an appropriate judicial
authority and the Scheme should be modified accordingly. We reiterate that the
basis of categorisation and the actual categorisation should be justifiable and
judicially reviewable-the provisions in the Act and the Scheme should be so
read. There were large number of submissions made on behalf of the victims
about amending the scheme. Apart from and to the extent indicated above, in our
opinion, it would be unsafe to tinker with the scheme piecemeal. The scheme is
an integrated whole and it would not be proper to amend it piecemeal. We,
however, make it clear that in respect of categorisation and claim, the
authorites must act on principles of natural justice and act quasi-judicially.
126.
As mentioned hereinbefore, good deal of arguments were advanced before us as to
whether the clause in the settlement that criminal proceedings would not be
proceeded with and the same will remain quashed is valid or invalid.
We
have held that these are not part of the proceedings under the Act. So the
orders on this aspect in the order of 14th/15th February, 1989 are not orders
under the Act.
Therefore,
on the question of the validity of the Act, this aspect does not arise whether
the settlement of criminal proceedings or quashing the criminal proceedings
could be a valid consideration for settlement or whether if it was such a
consideration or not is a matter which the court reviewing the settlement has
to decide.
127.
In the premise, we hold that the Act is constitutionally valid in the manner we
read it. It proceeds on the hypothesis that until the claims of the victims are
realised or obtained. from the delinquents, namely, UCC and UCIL by settlement
or by adjudication and until the proceedings in respect thereof continue the
Central Government must pay interim compensation or maintenance for the
victims. In entering upon the settlement in view of s. 4 of the Act, regard
must be had to the views of the victims and for the purpose of giving regard to
these, appropriate notices before arriving at any settlement, was necessary. In
some cases, however, post-decisional notice might be sufficient but in the facts
and the circumstances of this case, no useful purpose would be served by giving
a post-decisional hearing having regard to the circumstances mentioned in the
order of this Court dated 4th May, 1989 and having regard to the fact that
there are no further additional data and facts available with the victims which
can be profitably and meaningfully presented to controvert the basis of the
settlement and further having regard to the fact that the victims had their say
or on 704 their behalf their views had been agitated in these proceedings and
will have further opportunity in the pending review proceedings. No further
order on this aspect is necessary.
The
sections dealing with the payment of compensation and categorisation should be
implemented in the manner indicated before.
128.
The Act was conceived on the noble promise of giving relief and succour to the
dumb, pale, meek and impoverished victims of a tragic industrial gas leak
disaster, a concomitant evil in this industrial age of technological advancement
and development. The Act had kindled high hopes in the hearts of the. weak and
worn, wary and forlorn.
The
Act generated hope of humanity. The implementation of the Act must be with
justice. Justice perhaps has been done to the victims situated as they were,
but it is also true that justice has not appeared to have been done. That is a
great infirmity. That is due partly to the fact that procedure was not strictly
followed as we have understood it and also partly because of the atmosphere
that was created in the country, attempts were made to shake the confidence of
the people in the judicial process and also to undermine the credibility of
this Court. This was unfortunate. This was perhaps due to misinformed public
opinion and also due to the fact that victims were not initially taken into
confidence in reaching the settlement. This is a factor which emphasises the
need for adherence to the principles of natural justice. The credibility of
judiciary is as important as the alleviation of the suffering of the victims,
great as these were. We hope these adjudications will restore that credibility.
Principles of natural justice are integrally embedded in our constitutional
framework and their pristine glory and primacy cannot and should not be allowed
to be submerged by the exigencies of particular situations or cases. This Court
must always assert primacy of adherence to the principles of natural justice in
all adjudications. But at the same time, these must be applied in a particular
manner in particular cases having regard to the particular circumstances. It
is, therefore, necessary to reiterate that the promises made to the victims and
hopes raised in their hearts and minds can only be redeemed in some measure if
attempts are made vigorously to distribute the amount realised to the victims
in accordance with the scheme as indicated above. That would be a redemption to
a certain extent. It will also be necessary to reiterate that attempts should
be made to formulate the principles of law guiding the Government and the
authorities to permit carrying on of trade dealing with materials and things
which have dengerous consequences within sufficient specific safeguards
especially in case of multinational corporations trading in India. An awareness
on these lines has dawned. Let 705 action follow that awareness. It is also
necessary to reiterate that the law relating to damages and payment of interim
damages or compensation to the victims of this nature should be seriously and
scientifically examined by the appropriate agencies.
129.
The Bhopal Gas Leak disaster and its aftermath
of that emphasise the need for laying down certain norms and standards the
Government to follow before granting permissions or licences for the running of
industries dealing with materials which are of dangerous potentialities. The
Government should, therefore, examine or have the problem examined by an expert
committee as to what should be the conditions on which future licences and/or
permission for running industries on Indian soil would be granted and for
ensuring enforcement of those conditions, sufficient safety measures should be
formulated and scheme of enforcement indicated.
The
Government should insist as a condition precedent to the grant of such licences
or permissions, creation of a fund in anticipation by the industries to be
available for payment of damages out of the said found in case of leakages or
damages in case of accident or disaster flowing from negligent working of such
industrial operations or failure to ensure measures preventing such occurrence.
The Government should also ensure that the parties must agree to abide to pay
such damages out of the said damages by procedure separately evolved for
computation and payment of damages without exposing the victims or sufferers of
the negligent act to the long and delayed procedure. Special procedure must be
provided for and the industries must agree as a condition for the grant of
licence to abide by such procedure or to abide by statutory arbitration. The
basis for damages in case of leakages and accident should also be statutorily
fixed taking into consideration the nature of damages inflicted, the
consequences thereof and the ability and capacity of the parties to pay. Such
should also provide for deterrent or punitive damages, the basis for which
should be formulated by a proper expert committee or by the Government. For
this purpose, the Government should have the matter examined by such body as it
considers necessary and proper like the Law Commission or other competent
bodies.
This
is vital for the future.
130.
This case has taken some time. It was argued extensively. We are grateful to
counsel who have assisted in all these matters. We have reflected. We have
taken some time in pronouncing our decision. We wanted time to lapse so that
the heat of the moment may calm down and proper atmosphere restored. Justice,
it has been said, is the constant and perpetual disposition to render every man
his due. But what 706 is a man's due in a particular situation and in a particular
circumstances is a matter for appraisement and adjustment.
It has
been said that justice is balancing. The balances have always been the symbol
of even-handed justice. But as said Lord Denning in Jones v. National Coal
Board Ltd., [1957] 2 QB 55, at 64-let the advocates one after the other put the
weights into the scales--the 'nicely calculated less or more'--but the judge at
the end decides which way the balance tilts, be it ever so slightly. This is so
in every case and every situation.
13 1.
The applications are disposed of in the manner and with the direction, we have
indicated above.
SINGH,
J. 1 have gone through the proposed judgment of my learned brother, Sabyasachi
Mukharji, CJI. I agree with the same but I consider it necessary to express my
opinion on certain aspects.
Five
years ago between the night of December 2-3, 1984 one of the most tragic
industrial disasters in the recorded history of mankind occurred in the city of
Bhopal, in the State of Madhya Pradesh, as a result of which several persons
died and thousands were disabled and physically incapacitated for life. The
ecology in and around Bhopal was adversely affected and air,
water and the atmosphere was polluted, its full extent has yet to be
determined. Union Carbide India Limited (UCIL) a subsidiary of Union Carbide
Corporation (a Transnational Corporation of United States) has been manufacturing pesticides at its plant located in
the city of Bhopal. In the process of manufacture of
pesticide the UCIL had stored stock of Methyl Isocyanate commonly known as MlC
a highly toxic gas. On the night of the tragedy, the MIC leaked from the plant
in substantial quantity causing death and misery to the people working in the
plant and those residing around it. The unprecedented catastrophe demonstrated
the dangers inherent in the production of hazardous chemicals even though for
the purpose of industrial development. A number of civil suits for damages
against the UCC were filed in the United States of America and also in this Country. The cases filed in USA were referred back to the Indian courts by Judge
Keenan details of which are contained in the judgment of my learned brother
Mukharji, CJI. Since those who suffered in the catastrophe were mostly poor,
ignorant, illiterate and ill-equipped to pursue their claims for damages either
before the courts in USA or in Indian courts, the Parliament enacted the Bhopal
Gas Leak Disaster (Processing of Claims) Act 1985 (hereinafter referred to as
'the Act') conferring power on the Union of India to take over the conduct of
litigation in this regard in place of the 707 individual claimants. The facts
and circumstances which led to the settlement of the claims before this Court
have already been stated in detail in the judgment of Mukharji, CJI, and therefore,
I need not refer to those facts and circumstances. The constitutional validity
of the Act has been assailed before us in the present petitions. If the Act is
declared unconstitutional, the settlement which was recorded in this Court,
under which the UCC has already deposited a sum of Rs.750 crores for meeting
the claims of Bhopal Gas victims, would fall and the amount of money which is
already in deposit with the Registry of this Court would not be available for
relief to the victims. Long and detailed arguments were advanced before us for
a number of days and on an anxious consideration and having regard to the legal
and constitutional aspects and especially the need for immediate help and
relief to the victims of the gas disaster, which is already delayed, we have
upheld the constitutional validity of the Act. Mukharji, CJI has rendered a
detailed and elaborate judgment with which I respectfully agree. However, I
consider it necessary to say few words with regard to the steps which should be
taken by the Executive and the Legislature to prevent such tragedy in future
and to avoid the prolonged misery of victims of in industrial disaster.
We are
a developing country, our national resources are to be developed in the field
of science, technology, industry and agriculture. The need for industrial
development has led to the establishment of a number of plants and factories by
the domestic companies and under industries are engaged in hazardous or
inherently dangerous activities which pose potential threat to life, health and
safety of persons working in the factory, or residing in the surrounding areas.
Though working of such factories and plants is regulated by a number of laws of
our country, i.e. the Factories Act, Industrial Development and Regulation Act
and Workmen's Compensation Act etc. there is no special legislation providing
for compensation and damages to outsiders who may suffer on account of any
industrial accident. As the law stands to-day, affected persons have to
approach civil courts for obtaining compensation and damages. In civil courts,
the determination of amount of compensation or damages as well as the liability
of the enterprise has been bound by the shackles of conservative principles
laid down by the House of Lords in Ryland v. Herchief, [1868] LR 3 HL page 330.
The principles laid therein made it difficult to obtain adequate damages from
the enterprise and that too only after the negligence of the enterprise was
proved. This continued to be the position of law, till a Constitution Bench of
this Court in M.C. Mehta 708 v. Union of India, [1987] 1 SCC 420, commonly
known as Sriram Oleum Gas Leak case evolved principles and laid down new norms
to deal adequately with the new problems arising in a highly industrialised
economy. This Court made judicial innovation in laying down principles with
regard to liability of enterprises carrying hazardous or inherently dangerous
activities departing from the rule laid down in Ryland v. Fletcher. The Court
held as under:
"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 nondelegiable duty to the community to
ensure that no harm results to any one 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. Since the persons
harmed on account of the hazardous or inherently dangerous activity carried on
by the enterprise would not be in a position to isolate the process of
operation from the hazardous preparation of substance or any other related
element that caused the harm the enterprise must be held strictly liable for
causing such harm as a part of the social cost of carrying on the hazardous or
inherently dangerous activity. If the enterprise is permitted to carry on an
hazardous or inherently dangerous activity for its profit, the law must presume
that such permission is conditional on the enterprise absorbing the cost of any
accident arising on account of such hazardous or inherently dangerous activity
as an appropriate item of its overheads.
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 709 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." The law so laid down made a land-mark departure from the
conservative principles with regard to the liability of an enterprise carrying
on hazardous or inherently dangerous activities.
In the
instant cases there is no dispute that UCIL a subsidiary of UCC was carrying on
activity of manufacturing pesticide and in that process it had stored MIC a
highly toxic and dangerous gas which leaked causing vast damage not only to
human life but also to the flora and fauna and ecology in and around Bhopal. In view of this Court's decision
in M.C. Mehta's case there is no scope for any doubt regarding the liability of
the UCC for the damage caused to the human beings and nature in and around Bhopal. While entering into the settlement
the UCC has accepted its liability and for that reason it has deposited a sum
of Rs.750 crores in this Court. The inadequacy of the amount of compensation
under the settlement was assailed by the counsel for the petitioners but it is
not necessary for us to express any opinion on that question as review
petitions are pending before another Constitution Bench and more so as in the
present cases we are concerned only with the constitutional validity of the
Act.
The
Bhopal Gas tragedy has raised several important questions regarding the
functioning of multi-nationals in third world countries. After the Second world
war colonial rule came to end in several parts of the globe, as a number of
natives secured independence from foreign rule. The political domination was
over but the newly born nations were beset with various problems on account of
lack of finances and development. A number of multi-nationals and transnational
corporations offered their services to the under-developed and developing
countries to provide finances and technical know-how by 710 setting up their
own industries in those countries on their own terms that brought problems with
regard to the control over the functioning of the transnational corporations.
Multi-national
companies in many cases exploited the underdeveloped nations and in some cases
they influenced political and economic policies of host countries which
subverted the sovereignty of those countries. There has been complaints against
the multi-nationals for adopting unfair and corrupt means to advance their
interests in the host countries. Since this was a worldwide phenomena the
United Nations took up the matter for consideration. The Economic and Social
Council of the United Nations established a Commission on Transnational
Corporations to conduct research on various political, economic and social
aspects relating to transnational corporations. On a careful and detailed study
the Commission submitted its Report in 1985 for evolving a Code of Conduct for
Transnational Corporations. The Code was adopted in 1986 to which large number
of countries of the world are signatories. Although it has not been fully
finalised as yet, the Code presents a comprehensive instrument formulating the
principles of Code of Conduct for transnational corporations carrying on their
enterprises in under developed and developing countries. The Code contains
provisions regarding ownership and control designed to strike balance between
the competing interests of the Transnational Corporation and the host
countries. It extensively deals with the political, economic, financial, social
and legal questions. The Code provides for disclosure of information to the
host countries and it also provides guidelines for nationalisation and
compensation, obligations to international law and jurisdiction of courts. The
Code lays down provisions for settlement of disputes between the host States and
an affiliate of a Transnational Corporation. It suggests that such disputes
should be submitted to the national courts or authorities of host countries
unless amicably settled between the parties. It provides for the choice of law
and means for dispute settlement arising out of contracts. The Code has also
laid down guidelines for the determination of settlement of disputes arising
out of accident and disaster and also for liability of Transnational
Corporations and the jurisdiction of the courts. The Code is binding on the
countries which formally accept it. It was stated before us that India has accepted the Code. If that be
so, it is necessary that the Government should take effective measures to
translate the provisions of the Code into specific actions and policies backed
by appropriate legislation and enforcing machinery to prevent any accident or
disaster and to secure the welfare of the victims of any industrial disaster.
In the
context of our national dimensions of human rights, right 711 to life, liberty,
pollution free air and water is guaranteed by the Constitution under Articles
21, 48A and 5l(g), it is the duty of the State to take effective steps to
protect the guaranteed constitutional rights. These rights must be integrated
and illumined by the evolving international dimensions and standards, having
regard to our sovereignty, as highlighted by Clauses 9 and 13 of U.N. Code of
conduct on Transnational Corporations. The evolving standards of international
obligations need to be respected, maintaining dignity and sovereignty of our
people, the State must take effective steps to safeguard the constitutional
rights of citizens by enacting laws. The laws so made may provide for
conditions for granting licence to Transnational Corporations, prescribing
norms and standards for running industries on Indian soil ensuring the
constitutional rights of our people relating to life, liberty, as well as
safety to environment and ecology to enable the people to lead a healthy and
clean life. A Transnational Corporation should be made liable and subservient
to laws of our country and the liability should not be restricted to affiliate
company only but the parent corporation should also be made liable for any
damage caused to the human being or ecology. The law must require transnational
corporations to agree to pay such damages as may be determined. by the
statutory agencies and forum constituted under it without exposing the victims
to long drawn litigation. Under the existing civil law damages are determined
by the Civil Courts, after a long drawn litigation, which destroys the very
purpose of awarding damages. In order to meet the situation, to avoid delay and
to ensure immediate relief to the victims we would suggest that the law made by
the Parliament should provide for constitution of tribunals regulated by
special procedure for determining compensation to victims of industrial
disaster or accident, appeal against which may lie to this Court on limited
ground of questions of law only after depositing the amount determined by the
Tribunal. The law should also provide for interim relief to victims during the
pendency of proceedings. These steps would minimise the misery and agony of
victims of hazardous enterprises.
There
is yet another aspect which needs consideration by the Government and the
Parliament. Industrial development in our country and the hazards involved
therein, pose a mandatory need to constitute a statutory "Industrial
Disaster Fund", contributions to which may be made by, the Government, the
industries whether they are transnational corporations or domestic undertakings
public or private. The extent of contribution may be worked out having regard
to the extent of hazardous nature of the enterprise and other allied matters.
The Fund should be permanent in nature, so that money is 712 readily available
for providing immediate effective relief to the victims. This may avoid delay,
as has happened in the instant case in providing effective relief to the
victims.
The
Government and the Parliament should therefore take immediate steps for
enacting laws, having regard to these suggestions, consistent with the
international norms and guidelines as contained in the United Nations Code of
Conduct on Transnational Corporations.
With
these observations, I agree with the order proposed by my learned brother,
Sabyasachi Mukharji, CJI.
RANGANATHAN,
J. Five years ago, this country was shaken to its core by a national
catastrophe, second in magnitude and disastrous effects only to the havoc
wrought by the atomic explosions in Hiroshima and Nagasaki. Multitudes of illiterate and
poverty-stricken people in and around Bhopal suffered damage to life and limb due to the escape of poisonous Methyl
Isocyanate (MIC) gas from one of the storage tanks at the factory of the Union
Carbide (India) Limited (UCIL) in Bhopal, a wholly owned subsidiary of the
multinational giant, the Union Carbide Corporation (UCC). A number of civil
suits claiming damages from the UCC were filed in the United States of America and similar litigation also
followed in Indian courts. Fearing the possibilities of the exploitation of the
situation by vested interests, the Government of India enacted, the Bhopal Gas
Leak Disaster (Processing of Claims) Act, 1985 ('the Act') to regulate the
course of such litigation. Briefly speaking, it empowered the Union of India to
take over the conduct of all litigation in this regard and conduct it in place
of, or in association with, the individual claimants. It also enabled the Union to enter into a compromise with the UCC and UCIL and
arrive at a settlement. The writ petitions before us have been filed
challenging the constitutional validity of this statute on the ground that the
divestiture of the claimants' individual rights to legal remedy against the
multinational for the consequences of carrying on dangerous and hazardous
activities on our soil violates the fundamental rights guaranteed under article
14, 19 and 21 of the Constitution.
In
consequence of certain proceedings before Judge Keenan of the U.S. District
Courts, the venue of the litigation shifted to India. In the principal suit filed in India by the Union (Civil Suit No. 1113/86) orders were passed by the
trial court in Bhopal directing the UCC to deposit Rs.370
crores (reduced to Rs.250 crores by the Madhya Pradesh High Court) as interim
payment to the gas victims pending disposal of the suit. There were appeals to
this Court in which the 713 UCC contested the Court's jurisdiction to pass an
order for an interim payment in a suit for money, while the Union pleaded that a much higher interim payment should
have been granted. When the matter was being argued in this Court, a settlement
was arrived at between the Union and the
UCC under which a sum of Rs.750 crores has been received by the Union in full settlement of all the claims of all victims
of the gas leak against the UCC. The Union
also agreed to withdraw certain prosecutions that had been initiated against
the officials of the UCC and UCIL in this connection. This settlement received
the imprimatur of this Court in its orders dated 14th & 15th February, 1989.
It is
unfortunate that, though the writ petitions before us were pending in this
Court at that time, neither their contents nor the need for considering first
the issue of the validity of the Act before thinking of a settlement in
pursuance of its provisions seem to have been effectively brought to the notice
of the Bench which put an end to all the litigation on this topic in terms of
the settlement. The settlement thus stood approved while the issue of validity
of the Act under which it was effected stood undecided. When this was brought
to the notice of the above Bench, it directed these writ petitions to be listed
before a different Bench 'to avoid any possible feeling that the same Bench may
be coloured in its views on the issue by reason of the approval it had given to
the fait accompli viz. the settlement. That is now these matters came before
us.
The
petitioners, claiming to represent a section of the victims are, firstly,
against any settlement at all being arrived at with the UCC. According to them,
it is more important to ensure by penal action that multinational corporations
do not play with the lives of people in developing and under developed
countries than to be satisfied with mere compensation for injury and that the
criminal prosecutions initiated in this case should have been pursued.
Secondly, they are of the view that the amount for which the claims have been
settled is a pittance, far below the amount of damages they would have been
entitled to, on the principles of strict, absolute and punitive liability
enunciated by this Court in Mehta's case [1987] 1 S.C.R.
819.
Thirdly, their grievance is that no publicity at all was given, before this
court passed its order, to enable individual claimants or groups of them to put
forward their suggestions or objections to the settlement proposed. Their
interests were sealed, they say, without complying with elementary principles
of natural justice. They contend that the provisions of an Act which has made
such a settlement possible cannot be constitutionally valid.
714
The arguments before us ranged over a very wide ground, covered several issues
and extended to several days. This Bench has been placed in somewhat of a
predicament as it has to pronounce on the validity of the provisions of the Act
in the context of an implementation of its provisions in a particular manner
and, though we cannot (and do not) express any views regarding the merits of
the settlement, we are asked to consider whether such settlement can be
consistent with a correct and proper interpretation of the Act tested on the
touchstone of the fundamental rights guaranteed under the Constitution.
Mukharji, C.J., has outlined the issues, dealt elaborately with the contentions
urged, and given expression to his conclusions in a learned, elaborate and
detailed judgment which we have had the advantage of perusing in draft. Our
learned brother K.N. Singh, J., has also highlighted certain aspects in his
separate judgment. We are, in large measure, in agreement with them, but should
like to say a few words on some of the issues in this case, particularly those
in regard to which our approach has been somewhat different:
1. The
issue regarding the validity of the Act turns principally on the construction
of sections 3 and 4 of the Act. We are inclined to hold that the fact that a
settlement has been effected, or the circumstances in which or the amount for
which the claims of the victims have been settled, do not have a bearing on this
question of interpretation and have to be left out of account altogether except
as providing a contextual background in which the question arises. Turning
therefore to the statute and its implications, the position is this. Every
person who suffered as a consequence of the gas leak had a right to claim
compensation from the persons who, according to him, were liable in law for the
injury caused to him and also a fight to institute a suit or proceeding before
any court or authority with a view to enforce his right to claim damages. In
the normal course of events, such a claimant who institute a suit or proceeding
would have been at complete liberty to withdraw the said suit or proceeding or
enter into any compromise he may choose in that regard. Section 3 undoubtedly
takes away this fight of the claimant altogether: (a) except to the limited
extent specified in the proviso to S. 3(3) and (b) subject to the provisions of
S. 4, for this section clearly states that it is the Central Government and the
Central Government alone which has the right to represent and act in place of
the claimants, whether within or outside India, for all purposes in 715
connection with the enforcement of his claims. We may first consider how far
the main provision in S. 3 (leaving out of account the proviso as well as
section 4) is compatible with the Constitution The first question that arises
is whether the legislature is justified in depriving the claimants of the right
and privilege of enforcing their claims and prosecuting them in such manner as
they deem fit and in compulsorily interposing or substituting the Government in
their place. We think that, to this question, there can be only one answer.
As
pointed out by our learned brother, the situation was such that the victims of
the tragedy needed to be protected against themselves as their adversery was a
mighty multinational corporation and proceedings to a considerable extent had
been initiated in a foreign country, where the conduct of the cases was
entrusted to foreign lawyers under a system of litigation which is unfamiliar
to us here. In the stark reality of the situation, it cannot even be plausibly
contended that the large number of victims of the gas leak disaster should have
been left to fend for itself and merely provided with some legal aid of one
type or another.
It is
necessary to remember that, having regard to the identity of the principal
ground of claim of all the victims, even if a single victim was not diligent in
conducting his suit or entered into a compromise or submitted to a decree
judging the issues purely from his individual point of view, such a decision or
decree could adversely affect the interests of the innumerable other victims as
well. In fact, it appears that a settlement between one set of claimants and
the adversary corporation was almost imminent and would perhaps have been
through out for the timely intervention of the Government of India. The battle
for the enforcement of one's rights was bound to be not only prolonged but also
very arduous and expensive and the decision of the legislature that the fight
against the adversary should be consolidated and its conduct handed over to the
Government of India--it may perhaps have been better if it had been handed over
to an autonomous body independent of the Government but, as pointed out by our
learned brother, the course adopted was also not objectionable--was perhaps the
only decision that could have been taken in the circumstances.
This
is indeed a unique situation in which the victims, in order to realise to the
best advantage their rights against UCC, had to be helped out by transposing
that right to be enforced by the Government.
We did
not indeed understand any learned counsel before us to say that the legislature
erred in entrusting the Government of India 716 with the responsibility of
fighting for the victims. The only grievance is that in the process their right
to take legal proceedings should not have been completely taken away and that
they should also have had the liberty of participating in the proceedings right
through. In fact, though the Act contemplates the Central Government to
completely act in place of the victims, the Government of India has not in fact
displaced them altogether. In all the proceedings pending in this country, as
well as those before Judge Keenan, the Government of India has conducted the
proceedings but the other victims or such of them as chose to associate
themselves in these proceedings by becoming parties were not shut out from
taking part in the proceedings.
In
fact, as the learned Attorney General pointed out, one of the groups of
litigants did give great assistance to the trial judge at Bhopal. But even if the provisions of S. 3
had been scrupulously observed and the names of all parties, other than the
Central Government, had been got deleted from the array of parties in the suits
and proceedings pending in this country, we do not think that the result would
have been fatal to the interests of the litigants. On the contrary, it enabled
the litigants to obtain the benefit of all legal expertise at the command of
the Government of India in exercising their rights against the Union Carbide
Corporation. Such representation can well be justified by resort to a principle
analogous to, if not precisely the same as that of, "parens patriae".
A victim of the tragedy is compelled to part with a valuable right of his in
order that it might be more efficiently and satisfactory 'exploited for his
benefit than he himself is capable of. It is of course possible that there may
be an affluent claimant or lawyer engaged by him, who may be capable of
fighting the litigation better. It is possible that the Government of India as
a litigant may or may not be able to pursue the litigation with as much
determination or capability as such a litigant.
But in
a case of the present type one should not be confounded by such a possibility.
There are more indigent litigants than affluent ones. There are more
illiterates than enlightened ones. There are very few of the claimants, capable
of finding the financial wherewithal required for fighting the litigation. Very
few of them are capable of prosecuting such a litigation in this country not to
speak of the necessity to run to a foreign country. The financial position of
UCIL was negligible compared to the magnitude of the claim that could arise
and, though eventually the battle had to be pitched on our own soil, an initial
as well as final recourse to legal proceedings in the United States was very much on the cards, indeed
inevitable. In this situation, the legislature was perfectly justified in
coming to the aid of the victims with this piece of legislation and in asking
the Central Government to shoulder the responsibility by substituting itself in
place of the victims 717 for all purposes connected with the claims. Even if
the Act had provided for a total substitution of the Government of India in
place of the victims and had completely precluded them from exercising their
rights in any manner, it could perhaps have still been contended that such
deprivation was necessary in larger public interest.
But
the Act is not so draconian in its content. Actually, as we have said a little
earlier, the grievance of the petitioners is not so much that the Government
was entrusted with the functions. of a dominus litis in this litigation.
Their
contention is that the whole object and purpose of the litigation is to promote
the interests of the claimants, to enable them to fight the UCC with greater
strength and determination, to help them overcome limitations of time, money
and legal assistance and to realise the best compensation possible consistent
not only with the damage suffered by them but also consistent with national
honour and prestige. It is suggested that the power conferred on the Government
should be construed as one hedged in by this dominant object. A divestiture of
the claimant's right in this situation would be reasonable, it is said, only if
the claimant's rights are supplemented by the Government and not supplanted by
it.
Assuming
the correctness of the argument, the provisions of the proviso to S. 3(3) and
of section 4 furnish an answer to this contention. While the provision
contained in the main part of section 3 may be sufficient to enable the
Government of India to claim to represent the claimants and initiate and
conduct suits or proceeding on their behalf, the locus standi of the Government
of India in suits filed by other claimants before the commencement of the Act
outside India would naturally depend upon the discretion of the court enquiring
into the matter. That is why the proviso to section 3 makes the right of the
Government of India to represent and act in place of the victims in such
proceedings subject to the permission of the court or authority where the
proceedings are pending. It is of course open to such court to permit the
Central Government even to displace the claimants if it is satisfied that the
authority of the Act is sufficient to enable it to do so. In the present case
it is common ground that the proceedings before Judge Keenan were being
prosecuted by the Central Government along with various individual claimants.
Not only did Judge Keenan permit the association of the Government of India in
these proceedings but the Government of India did have a substantial voice in
the course of those proceedings as well.
Again
section 4 mandates that, notwithstanding anything 718 contained in section 3,
the Central Government, in representing and acting in place of any person in
relation to any claim, shall have due regard to any matters which such person
may require to be urged with respect to his claim. It also stipulates that if
such person so desires, the Central Government shall permit, at the expense of
such person, a legal practitioner of his choice to be associated in the conduct
of any suit or other proceeding relating to his claim. In other words, though,
perhaps, strictly speaking, under section 3 the Central Government can totally
exclude the victim himself or his legal practitioner from taking part in the
proceedings (except in pending suits outside India), section 4 keeps the substance of the rights of the
victims in tact. It enables, and indeed obliges, the Government to receive
assistance from individual claimants to the extent they are able to offer the
same. If any of the victims or their legal advisers have any specific aspect
which they would like to urge, the Central Government shall take it into
account. Again if any individual claimant at his own expense retains a legal
practitioner of his own choice, such legal practitioner will have to be
associated with the Government in the conduct of any suit or proceeding
relating to his claim. Sections 3 and 4 thus combine together the interests of
the weak, illiterate, helpless and poor victims as well as the interests of
those who could have managed for themselves, even without the help of this
enactment. The combination thus envisaged enables the Government to fight the
battle with the foreign adversary with the full aid and assistance of such of
the victims or their legal advisers as are in a position to offer any such
assistance. Though section 3 denies the claimants the benefit of being eo
nominee parties in such suits or proceedings, section 4 preserves to them
substantially all that they can achieve by proceeding on their own. In other
words, while seeming to deprive the claimants of their right to take legal
action on their own, it has preserved those rights, to be exercised indirectly.
A conjoint reading of sections 3 and 4 would, in our opinion, therefore show
that there has been no real total deprivation of the right of the claimants to
enforce their claim for damages in appropriate proceedings before any
appropriate forum. There is only a restriction of this right which, in the
circumstances, is totally reasonable and justified. The validity of the Act is,
therefore, not liable to be challenged on this ground.
The
next angle from which the validity of the provision is attacked is that the
provision enabling the Government to enter into a compromise is bad. The
argument runs thus: The object of the legislation can be furthered only if it
permits the Government to prosecute the litigation more effectively and not if
it enables the Government to 719 withdraw it or enter into a compromise.
According to them, the Act fails the impecunious victims in this vital aspect.
The
authority conferred by the Act on the Government to enter into a settlement or
compromise, it is said, amounts to an absolute negation of the rights of the
claimants to compensation and is capable of being so exercised to render such
rights totally valueless, as in fact, it is said, has happened.
It
appears to us that this contention proceeds on a misapprehension. It is common
knowledge that any authority given to conduct a litigation cannot be effective
unless it is accompanied by an authority to withdraw or settle the same if the
circumstances call for it. The vagaries of a litigation of this magnitude and
intricacy could not be fully anticipated. There were possibilities that the litigation
may have to be fought out to the bitter finish. There were possibilities that
the UCC might be willing to adequately compensate the victims either on their
own' or at the insistence of the Government concerned. There was also the
possibility, which had already been in evidence before Judge Keenan, that the
proceedings might ultimately have to end in a negotiated settlement. One
notices that in most of the mass disaster cases reported, proceedings finally
end in a compromise if only to avoid an indefinite prolongation of the agonies
caused by such litigation. The legislation, therefore, cannot be considered to
be unreasonable merely because in addition to the right to institute a suit or
other proceedings it also empowers the Government to withdraw the proceedings
or enter into a compromise.
Some
misgivings were expressed, in the course of the hearing, of the legislative
wisdom (and, hence the validity) of entrusting the carriage of these
proceedings and, in particular, the power of settling it out of Court, to the
Union of India. It was contended that the union is itself a joint tort-feasor
(sued as such by some of the victims) with an interest (adverse to the victims)
in keeping down the amount of compensation payable to the minimum so as to
reduce its own liability as a joint tort-feasor. It seems to us that this
contention in misconceived. As pointed out by Mukharji, C.J., the Union of
India itself is one of the entities affected by the gas leak and has a claim
for compensation from the UCC quite independent of the other victims. From this
point of view, it is in the same position as the other victims and, in the
litigation with the UCC, it has every interest in securing the maximum amount
of compensation possible for itself and the other victims. It is, therefore,
the best agency in the circumstances that could be looked up to for fighting
the UCC on its own as well as on behalf of the victims. The suggestion that the
Union is a joint tort-lessor has been 720
stoutly resisted by the learned Attorney General. But, even assuming that the Union has some liability in the matter, we fail to see-how
it can derive any benefit or advantage by entering into a low settlement with
the UCC. as is pointed out later in this judgment and by Mukharji, C.J., the
Act and Scheme thereunder have provided for an objective and quasi-judicial
determination of the amount of damages payable to the victims of the tragedy.
There is no basis for the fear expressed during the hearing that the officers
of the Government may not be objective and may try to cut down the amounts of
compensation, so as not to exceed the amount received from the UCC. It is
common ground and, indeed, the learned Attorney General fairly conceded, that
the settlement with the UCC only puts an end to the claims against the UCC and
UCIL and does not in any way affect the victims' rights, if any, to proceed
against the Union, the State of Madhya Pradesh or the ministers and officers
thereof, if so advised. If the Union and these
officers are joint tortlessors, as alleged, the Union will not stand to gain by allowing the claims against the
UCC to be settled for a low figure. On the contrary it will be interested in
settling the claims against the UCC at as high a figure as possible so that its
own liability as a joint tort-feasor (if made out) can be correspondingly
reduced. We are, therefore, unable to see any vitiating element in the
legislation insofar as it has entrusted the responsibility not only of carrying
on but also of entering into a settlement, if thought fit.
Nor is
there basis for the contention that the Act enables a settlement to be arrived
at without a proper opportunity to the claimants to express their views on any
proposals for settlement that may be mooted. The right of the claimant under
section 4 to put forward his suggestions or to be represented by a legal
practitioner to put forth his own views in the conduct of the suit or other
proceeding certainly extends to everything connected with the suit or other
proceeding. If, in the course of the proceedings there should arise any
question of compromise or settlement, it is open to the claimants to oppose the
same and to urge the Central Government to have regard to specific aspects m
arriving at a settlement. Equally it is open to any claimant to employ a legal
practitioner to ventilate his opinions in regard to such proposals for
settlement. The provisions of the Act, read by themselves, therefore, guarantee
a complete and full protection to the rights of the claimants in every respect.
Save only that they cannot file a suit themselves, their right to acquire
redress has not really been abridged by the provisions of the Act. Sections 3
and 4 of the Act properly read, in our opinion, completely vindicate the
objects and reasons which compelled Parliament to enact this piece of
legislation.
721
Far from abridging the rights of the claimants in any manner, these provisions
are so worded as to enable the Government to prosecute the litigation with the
maximum amount of resources, efficiency and competence at its command as well
as with all the assistance and help that can be extended to it by such of those
litigants and claimants as are capable of playing more than a mere passive rule
in the litigations But then, it is contended, the victims have had no
opportunity of considering the settlement proposals mooted in this case before
they were approved by the Court. This aspect is dealt with later.
2. One
of the contentions before us was that the UCC and UCIL are accountable to the
public for the damages caused by their industrial activities not only on a
basis of strict liability but also on the basis that the damages to be awarded
against them should include an element of punitive liability and that this has
been lost sight of while approving of the proposed settlement. Reference was
made in this context to M.C. Mehta's case (supra). Whether the settlement
should have taken into account this factor is, in the first place, a moot
question. Mukharji, C.J. has pointed out--and we are inclined to agree-that this
is an "uncertain province of the law" and it is premature to say
whether this yardstick has been, or will be, accepted in this country, not to
speak of its international acceptance which may be necessary should occasion
arise for executing a decree based on such a yardstick in another country.
Secondly, whether the settlement took this into account and, if not, whether it
is bad for not having kept this basis in view are questions that touch the
merits of the settlement with which we are not concerned. So we feel we should
express no opinion here on this issue. It is too far-fetched, it seems to us,
to contend that the provisions of the Act permitting the Union of India to
enter into a compromise should be struck down as unconstitutional because they
have been construed by the Union of India as enabling it to arrive at such a
settlement.
The
argument is that the Act confers a discretionary and enabling power in the
Union to arrive at a settlement but lays down no guidelines or indications as
to the stage at which, or circumstances in which, a settlement can be reached
or the type of settlement that can be arrived at;
the
power conferred should, therefore, be struck down as unguided, arbitrary and
uncanalised. It is difficult to accept this contention. The power to conduct a
litigation, particularly in a case of this type, must, to be effective,
necessarily carry with it a power to settle it at any stage.
It is
impossible to provide statutorily any detailed 722 catalogue of the situations
that would justify a settlement or the basis or terms on which a settlement can
be arrived at. The Act. moreover, cannot be said to have conferred any unguided
or arbitrary discretion to the Union in
conducting proceedings under the Act. Sufficient guidelines emerge from the
Statement of Objects and Reasons of the Act which makes it clear that the aim
and purpose of the Act is to secure speedy and effective redress to the victims
of the gas leak and that all steps taken in pursuance of the Act should be for
the implementation of the object. Whether this object has been achieved by a
particular settlement will be a different question but it is altogether
impossible to say that the Act itself is bad for the reason alleged. We,
therefore, think it necessary to clarify, for our part, that we are not called
upon to express any view on the observations in Mehta's case and should not be
understood as having done so.
3.
Shri Shanti Bhushan, who supported the Union's
stand as to the validity of the Act, however, made his support conditional on
reading into its provisions an obligation on the part of the Union to make interim payments towards their maintenance
and other needs consequent on the tragedy, until the suits filed on their
behalf ultimately yield tangible results. That a modern welfare State is under
an obligation to give succour and all kinds of assistance to people in distress
cannot at all be gainsaid. In point of fact also, as pointed out by the learned
Chief Justice, the provisions of the Act and scheme thereunder envisage interim
payments to the victims; so, there is nothing objectionable in this Act on this
aspect. However, our learned brother has accepted the argument addressed by
Shri Shanti Bhushan which goes one step further viz. that the Act would be
unconstitutional unless this is read as "a major inarticulate
promise" underlying the Act. We doubt whether this extension would be
justified for the hypothesis underlying the argument is, in the words of Sri
Shanti Bhushan, that had the victims been left to fend for themselves, they
would have had an "immediate and normal right of obtaining compensation
from the Union Carbide" and, as the legislation has vested their rights in
this regard in the Union, the Act should be construed as creating an obligation
on the Central Government to provide interim relief. Though we would
emphatically reiterate that grant of interim relief to ameliorate the plight of
its subjects in such a situation is a matter of imperative obligation on the
part of the State and not merely 'a matter of fundamental human decency' as
Judge Keenan put it, we think that such obligation flows from its character as
a welfare State and would exist irrespective of what the statute may or may not
provide. In our view the validity of the Act does not depend upon its 723
explicitly or implicitly providing for interim payments. We say this for two
reasons. In the first place, it was, and perhaps still is, a moot question
whether a plaintiff suing for damages in tort would be entitled to advance or
interim payments in anticipation of a decree. That was, indeed, the main point
on which the interim orders in this case were challenged before this Court and,
in the context of the events that took place, remains undecided. It may be
mentioned here that no decided case was brought to our notice in which interim
payment was ordered pending disposal of an action in tort in this country. May
be there is a strong case for ordering interim payments in such a case but, in
the absence of full and detailed consideration, it cannot be assumed that, left
to themselves, the victims would have been entitled to a "normal and
immediate" right to such payment. Secondly, even assuming such right
exists, all that can be said is that the State, which put itself in the place
of the victims, should have raised in the suit a demand for such interim
compensation--which it did--and that it should distribute among the victims
such interim compensation as it may receive from the defendants. To say that
the Act would be bad if it does not provide for payment of such compensation by
the Government irrespective of what may happen in the suit is to impose on the
State an obligation higher than what flows from its being subrogated to the
rights of the victims. As we agree that the Act and the scheme thereunder
envisage interim relief to the victims, the point is perhaps only academic. But
we felt that we should mention this as we are not in full agreement with
Mukharji, C.J., on this aspect on the case.
4. The
next important aspect on which much debate took place before us was regarding
the validity of the Act qua the procedure envisaged by it for a compromise or
settlement. It was argued that if the suit is considered as a representative
suit no compromise or settlement would be possible without notice in some
appropriate manner to all the victims of the proposed settlement and an
opportunity to them to ventilate their views thereon (vide Order XXIII, r.
3B,
C.P.C.). The argument runs thus: S. 4 of the Act either incorporates the
safeguards of these provisions in which event any settlement effected without
compliance with the spirit, if not the letter, of these provisions would be
ultra vires the Act. Or it does not, in which event, the provisions of S. 4
would be bad as making possible an arbitrary deprivation of the victims' rights
being inconsistent with, and derogatory of, the basic rules established by the
ordinary Law of the land viz. the Code of Civil Procedure.
We are
inclined to take the view that it is not possible to bring the suits brought
under the Act within the categories of representative action envisaged in the
Code of Civil procedure. The Act 724 deals with a class of action which is sui
generis and for which a special formula has been found and encapsuled in S.
4. The
Act divests the individual claimants of their right to sue and vests it in the Union. In relation to suits in India, the Union is the sole plaintiff, none of the others are envisaged as
plaintiffs or respondents. The victims of the tragedy were so numerous that
they were never defined at the stage of filing the plaint nor do they need to
be defined at the stage of a settlement. The litigation is carried on by the
State in its capacity, not exactly the same as but somewhat analogous to that
of a "parens patriae". In the case of a litigation by karta of a
Hindu Undivided Family or by a guardian on behalf of a ward, who is non-sui
juris, for example, the junior members of the family or the wards, are not to
be consulted before entering into a settlement. In such cases, the Court acts
as guardian of such persons to scrutinise the settlement and satisfy itself
that it is in the best interest of all concerned. It is later discovered that
there has been any fraud or collusion, it may be open to the junior members of
the family or the wards to call the karta or guardian to account but, barring
such a contingency, the settlement would be effective and binding.
In the
same way, the Union as "parens patriae" would
have been at liberty to enter into such settlement as it considered best on its
own and seek the Court's approval therefore.
However,
realising that the litigation is truly fought on behalf and for the benefit of
innumerable, though not fully identified victims the Act has considered it
necessary to assign a definite role to the individual claimants and this is
spelt out in S. 4. This section directs:
(i)
that the union shall have due regard to any matters which such person may
require to be urged with respect to his claim; and (ii) that the Union shaH, if
such person so desires, permit at the expense of such person, a legal
practitioner of his choice to be associated in the conduct of any suit or other
proceeding relating to his claim.
This
provision adequately safeguards the interests of individual victims. It enables
each one of them to bring to the notice of the Union any special features or circumstances which he would like
to urge in respect of any matter and if any such features are brought to its
notice the Union is obliged to take it into account.
Again, the individual claimants are also at liberty to engage their own counsel
to associate with the State counsel in conducting the proceedings. If the suits
in this 725 case had proceeded, in the normal course, either to the stage of a
decree or even to one of settlement the claimants could have kept themselves
abreast of the developments and the statutory provisions would have been more
than adequate to ensure that the points of view of all the victims are
presented to the court. Even a settlement or compromise could not have been
arrived at without the court being apprised of the views or any of them who
chose to do so.
Advisedly,
the statute has provided that though the Union of India will be the dominus
litis in the suit, the interests of all the victims and their claims should be
safeguarded by giving them a voice in the proceedings to the extent indicated
above. This provision of the statute is an adaptation of the principle of
O.I.r. 8 and of Or. XXIII r. 3 of the Code of Civil Procedure in its
application to the suits governed by it and, though the extent of participation
allowed to the victims is somewhat differently enunciated in the legislation,
substantially speaking, it does incorporate the principles of natural justice
to the extent possible in the circumstances. The statute cannot, therefore, be
faulted, as has been pointed out earlier also, on the ground that it denies the
victims an opportunity to present their views or places them at any
disadvantage in the matter of having an effective voice in the matter of settling
the suit by way of compromise.
The
difficulty in this case has arisen, as we see it, because of a fortuitous
circumstance viz. that the talks of compromise were mooted and approved in the
course of the hearing of an appeal from an order for interim payments.
Though
compromise talks had been in the air right from the beginning of this episode,
it is said that there was an element of surprise when they were put forward in
Court in February, 1989. This is not quite correct. It has been pointed out
that even when the issue regarding the interim relief was debated in the courts
below, attempts were made to settle the whole litigation. The claimants were
aware of this and they could--perhaps should--have anticipated that similar
attempts would be made in this Court also. Though certain parties had been
associated with the conduct of the proceedings in the trial court--and the
trial judge did handsomely acknowledge their contribution to the
proceedings--they were apparently not alert enough to keep a watching brief in
the Supreme Court, may be under the impression that the appeal here was
concerned only with the quantum of interim relief. One set of parties was
present in the Court but, apart from praying that he should be forthwith paid a
share in the amount that would be deposited in Court by the UCC in pursuance of
the settlement, no attempt appears to have been made to put forward a
contention that the amount of settlement was inade726 quate or had not taken
into account certain relevant considerations. The Union also appears to have
been acting on the view that it could proceed ahead on its own both in its
capacity as "parens patraie" as well as in view of the powers of
attorney held by it from a very large number of the victims though the genuineness
of this claim is now contested before us. There was a day's interval between
the enunciation of the terms of the settlement and their approval by the Court.
Perhaps the Court could have given some more publicity to the proposed
settlement in the newspapers, radio and television and also permitted some time
to lapse before approving it, if only to see whether there were any other
points of view likely to emerge. Basically speaking, however, the Act has
provided an adequate opportunity to the victims to speak out and if they or the
counsel engaged by some of them in the trial court had kept in touch with the
proceedings in this court, they could have most certainly made themselves
heard. If a feeling has gained ground that their voice has not been fully
heard, the fault was not with the statute but was rather due to the
developments leading to the finalisation of the settlement when the appeal
against the interim order was being heard in this Court.
One of
the points of view on which considerable emphasis was laid in the course of the
arguments was that in a case of this type the offending parties should be dealt
with strictly under the criminal law of the Land and that the inclusion, as
part of the settlement, of a term requiring the withdrawal of the criminal prosecutions
launched was totally unwarranted and vitiates the settlement. It has been
pointed out by Mukharji, C.J. ,--and we agree--that the Act talks only of the
civil liability of, and the proceedings against, the UCC or UCIL or others for
damages caused by the gas leak. It has nothing to say about the criminal
liability of any of the parties involved. Clearly, therefore, this part of the
settlement comprises a term which is outside the purview of the Act. The
validity of the Act cannot, therefore, be impugned on the ground that it
permits--and should not have permitted-the withdrawal of criminal proceedings
against the delinquents. Whether in arriving at the settlement, this aspect
could also have been taken into account and this term included in it, is a question
concerning the validity of the settlement. This is a question outside the terms
of reference to us and we, therefore, express no opinion in regard thereto.
5. A
question was mooted before us as to whether the actual settlement--if not the
statutory provision--is liable to be set aside on the grounds that the
principles of natural justice have been flagrantly 727 violated. The merits of
the settlement as such are not in issue before us and nothing we say can or
should fetter the hands of the Bench hearing a review petition which has
already been filed, from passing such orders thereon as it considers
appropriate.
Our
learned brother, however, has, while observing that the question referred to us
is limited to the validity of the Act alone and not the settlement,
incidentally discussed this aspect of the case too. He has pointed out that
justice has in fact been done and that all facts and aspects relevant for a
settlement have been considered. He has pointed out that the grievance of the
petitioners that the order of this Court did not give any basis for the
settlement has since been sought to be met by the order passed on 4th May, 1989
giving detailed reasons, This shows that the Court had applied its mind fully
to the terms of the settlement in the light of the data as well as all the
circumstances placed before it and had been satisfied that the settlement
proposed was a fair and reasonable one that could be approved.
In
actions of this type, the Court's approval is the true safety valve to prevent
unfair settlements and the fact is that the highest Court of the land has given
thought to the matter and seen it fit to place its seal of approval to the
settlement. He has also pointed out that a post-decisional hearing in a matter
like this will not be of much avail. He has further pointed out that a review
petition has already been filed in the case and is listed for hearing. The
Court has already given an assurance in its order of May 4, 1989, that it will only be too glad to consider any
aspects that may have been overlooked in considering the terms of the
settlement. Can it be said, in the circumstances, that there has been a failure
of justice which compels us to set aside the settlement as totally violative of
fundamental rights? Mukharji, C.J., has pointed out that the answer to this
question should be in the negative. It was urged that there is a feeling that
the maxim: "Justice must not only be done but must also appear to be
done" has not been fully complied with and that perhaps, if greater publicity
had attended the hearing, many other facts and aspects could have been
highlighted resulting in a higher settlement or no settlement at all. That
feeling can be fully ventilated and that deficiency can be adequately repaired,
it has been pointed out by Mukharji, C.J., in the hearing on the review
petition pending before this Court. Though we are prima facie inclined to agree
with him that there are good reasons why the settlement should not be set aside
on the ground that the principles of natural justice have been violated, quite
apart from the practical complications that may arise as the result of such an
order, we would not express any final opinion on the validity of the settlement
but would leave it open to be agitated, to the 728 extent permissible in law,
in the review petition pending before this Court.
There
is one more aspect which we may perhaps usefully refer to in this context. The
scheme of the Act is that on the one hand the Union of India pursues the
litigiation against the UCC and the UCIL; on the other all the victims of the
tragedy are expected to file their claims before the prescribed authority and
have their claims for compensation determined by such authority. Certain
infirmities were pointed out on behalf of the petitioners in the statutory
provisions enacted in this regard. Our learned brother has dealt with these
aspects and given appropriate directions to ensure that the claims will be gone
into by a quasi judicial authority (unfettered by executive prescriptions of
the amounts of compensation by categorising the nature of injuries) with an
appeal to an officer who has judicial qualifications. In this manner the scheme
under the Act provides for a proper determination of the compensation payable
to the various claimants. Claims have already been filed and these are being
scrutinised and processed. A correct picture as to whether the amount of
compensation for which the claims have ben settled is meagre, adequate or
excessive will emerge only at that stage when all the claims have been
processed and their aggregate is determined. In these circumstances, we feel
that no useful purpose will be served by a post-decisional hearing on the
quantum of compensation to be considered adequate for settlement.
For
these reasons, it would seem more correct and proper not to disturb the orders
of 14-15 February, 1989 on the ground that the rules of natural justice have
not been complied with, particularly in view of the pendency of the review
petition.
6.
Before we conclude, we would like to add a few words on the state of the law of
torts in this country. Before we gained independence, on account of our close
association with Great
Britain, we were
governed by the common law principles. In the field of torts, under the common
law of England, no action could be laid by the dependants or heirs of a person
whose death was brought about by the tortious act of another on the maxim actio
personalis moritur cum persona, although a person injured by a similar act
could claim damages for the wrong done to him. In England this situation was remedied by the
passing of the Fatal Accidents Act, 1846, popularly known as Lord Campell's
Act. Soon thereafter the Indian Legislature enacted the Fatal accidents Act,
1855. This Act is fashioned on the lines of the English Act 729 of 1846. Even
though the English Act has undergone a substantial change, our law has remained
static and seems a trifle archaic. The magnitude of the gas leak disaster in
which hundreds lost their lives and thousands were maimed, not to speak of the
damage to livestock, flora and fauna, business and property, is an eye opener.
The nation must learn a lesson from this traumatic experience and evolve
safeguards atleast for the future. We are of the view that the time is ripe to
take a fresh look at the outdated century old legislation which is out of tune
with modern concepts.
While
it may be a matter for scientists and technicians to find solutions to avoid
such large scale disasters, the law must provide an effective and speedy remedy
to the victims of such torts. The Fatal Accidents Act, on account of its
limited and restrictive application, is hardly suited to meet such a challenge.
We are, therefore, of the opinion that the old antiquated Act should be
drastically amended or fresh legislation should be enacted which should, inter
alia, contain appropriate provisions in regard to the following matters:
(i)
The payment of a fixed minimum compensation on a "no-fault liability"
basis (as under the Motor Vehicles Act), pending final adjudication of the
claims by a prescribed forum;
(ii)
The creation of a special forum with specific power to grant interim relief in
appropriate cases;
(iii)
The evolution of a procedure to be followed by such forum which will be
conducive to the expeditious determination of claims and avoid the high degree
of formalism that attaches to proceedings in regular courts; and (iv) A
provision requiring industries and concerns engaged in hazardous activities to
take out compulsory insurance against third party risks.
In
addition to what we have said above, we should like to say that the suggestion
made by our learned brother, K.N.
Singh
J., for the creation of an Industrial Disaster Fund (by whatever name called)
deserves serious consideration. We would also endorse his suggestion that the
Central Government will be well advised if, in future, it insists on certain
safeguards before permitting a transnational company to do business in this
country. The necessity of such safeguards, atleast in the following two
directions, is highlighted in the present case:
730
(a) Shri Garg has alleged that the processes in the Bhopal Gas Plant were so
much shrouded in secrecy that neither the composition of the deadly gas that
escaped nor the proper antidote therefore were known to anyone in this country
with the result that the steps taken to combat its effects were not only
delayed but also totally inadequate and ineffective.
It is
necessary that this type of situation should be avoided. The Government should
therefore insist, when granting licence to a transnational company to establish
its industry here, on a right to be informed of the nature of the processes
involved so as to be able to take prompt action in the event of an accident.
(b) We
have seen how the victims in this case have been considerably handicapped on
account of the fact that the immediate tort-feasor was the subsidiary of a
multi-national with its Indian assets totally inadequate to satisfy the claims
arising out of the disaster. It is, therefore, necessary to evolve, either by
international consensus or by unilateral legislation, steps to overcome these
handicaps and to ensure (i) that foreign corporations seeking to establish an
industry here, agree to submit to the jurisdiction of the Courts in India in
respect of actions for tortious acts in this country; (ii) that the liability
of such a corporation is not limited to such of its assets (or the assets of
its affiliates) as may be found in this country, but that the victims are able
to reach out to the assets of such concerns anywhere in the world; (iii) that
any decree obtained in Indian Courts in compliance with due process of law is
capable of being executed against the foreign corporation, its affiliates and
their assets without further procedural hurdles, in those other countries.
Our
brother, K.N. Singh, J., has in this context dealt at some length with the
United Nations Code of Conduct for multi-national Corporations which awaits
approval of various countries. We hope that calamities like the one which this
country has suffered will serve as catalysts to expedite the acceptance of an
international code on such matters in the near future.
With
these observations, we agree with the order proposed by the learned Chief
Justice.
G.N.
Petitions disposed of.
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