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TMI Blog1989 (12) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... uman 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 quantitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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). 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 17.12.87 directing the defendant-applicant to deposit ₹ 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 ₹ 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 ₹ 350 crores to ₹ 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5th February, 1989 passed an order after giving due consideration thereto. The terms of settlement were as follows: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , creation of a fund for meeting expenses in connection 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 j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceable 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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? 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ...... ..... 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, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 interest. Ms. Jaising sought to contend that to the extent that the Act was not confined to empowering th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere 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 al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stimation 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 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccess 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs 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 becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, [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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20-21 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 . 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 Attorn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 ₹ 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 ₹ 100 million should be paid over to him for himself as well as on behalf of those victims whom he claimed to represent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 man can s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not representing the victims in respect of the criminal liability of 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 liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, moti vating 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 alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties 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 assessment and procedure to examine the task of assessing the quantum of interim compensation. The Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionments were merely broad considerations generally guiding the idea of reasonableness of the overall basis of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tters 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 thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind 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 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 unwarrant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This can only be applied in respect of the claims out of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 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 Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs 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 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. 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 pursu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned 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 othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 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 strai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is 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, 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 justic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 crimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 notifica 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated. 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 exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isery 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 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 constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gligence of the enterprise was proved. This continued to be the position of law, till a Constitution Bench of this Court in M.C. Mehta 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 standar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 highlight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. 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 Carbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 pursue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lications, 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislature erred in entrusting the Government of India 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trusted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 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 expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is 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 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. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Shant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Procedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 withd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 thos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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