AI Drafter 
TaxTMI 
TaxTMI 
1991 (10) TMI 306
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....Lokur, A.L. Trehan, Ms. C.S. Lalitha, Harish Uppal in person, Mrs. K. Hingorani, R.B. Mehrotra, Ms. Lalitha Kaushik, D.K. Garg, Raju Ramachandran, Mukul Mudgal, S.R. Bhat, M.S. Ganesh, V.B. Mishra, A.N. Khanwilkar, Ms. Madhu Khatri, P. Parmeswaran, Sakesh Kumar, Satish K. Agnihotri, K. Kachwaha, Mrs. A.K. Verma, Ashok Sagar, Dadachanji, Vijay Gupta, Ms. A. Subhashini, C.S. Vaidyanathan and Ashok Singh for the appearing Parties. The Judgment of the Court was delivered by RANGANATH MISRA, CJ. I entirely agree with my noble and learned Brother Venkatachaliah and hope and trust that the judgment he as produced is the epitaph on the litigation. I usually avoid multiple judgments but this seems to be a matter where something more than what is and in the main judgment perhaps should be said. Early in the morning of December 3, 1984, one of the greatest industrial tragedies that history has recorded got clamped down on the otherwise quiet township of Bhopal, the capital of Madhya Pradesh. The incident was large in magni- tude - 2,600 people died instantaneously and suite a good number of the inhabitants of the town suffered from several ailments. In some cases the reaction manifested co....
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....nclusive between the parties to the extent that it grants or denies recovery of a sum of money" except that it is not deemed to be conclusive if: "1. The judgment was rendered under a system which does not provide impartial tribunals or procedures, compatible with the requirements of due process of law; 2. The foreign court did not have personal jurisdiction over the defendant". Art. 53. Recognition of Foreign Country Money Judgments. Although 5304 further provides that under certain specified conditions a foreign country judgment need not be recognized, none of these conditions would apply to the present cases except for the possibility of failure to provide UCC with sufficient notice of procedings or the exist- ence of fraud in obtaining the judgment, which do not presently exist but conceivably could occur in the future." The Court rejected the plea advanced by UCC of breach of due process by non-observance of proper standards and ulti- mately stated: "Any denial by the Indian Courts of due proc- ess can be raised by UCC as a defence to the plaintiffs' later attempt to enforce a result- in....
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.... operating with inherently dangerous technologies in the developing countries of the third world - questions said to be of great contemporary relevance to the democracies of the third- world?" The Court indicated that considerations of excellence and niceties of legal principles were greatly overshadowed by the pressing problems of very survival of a large number of victims. The Court also took into account the law's proverbial delays. In paragraph 31 of its order the Consti- tution Bench said: As to the remaining question, it has been said that many vital juristic princi- ples of great contemporary relevance to the Third World generally, and to India in partic- ular, touching problems emerging from the pursuit of such dangerous technologies for economic gains by multi-nationals arose in this case. It is said that this is an instance of lost opportunity to this apex Court to give the law the new direction of new vital issues emerging from the increasing dimensions of the economic exploitation of developing countries by economic forces of the rich ones. This case also, it is said, concerns the legal limits to be envisaged by the vital interests of the pr....
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.... is not entitled to withdraw from a settle- ment by choice. Union of India has not filed a petition for review but has supported the stand of others who have asked for review. The technical limitations of review have not been invoked in this case by the Court and all aspects have been permitted to be placed before the Court for its consid- eration. It is interesting to note that there has been no final adjudication in a mass tort action anywhere. The several instances which counsel for the parties placed before us were cases where compensation had been paid by consent or where settlement was reached either directly or through a circuitous process. Such an alternate procedure has been adopted over the years on account of the fact that trial in a case of this type would be protracted and may not yield any social benefit. Assessment of compensation in cases of this type has generally been by a rough and ready process. In fact, every assessment of compensation to some extent is by such process and the concept of just compensation is an attempt to approximate compensation to the loss suffered. We have pointed out in our order of May 4, 1989, that the estimate in the very nature of th....
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.... compounded or quashed and immunity against criminal action could not be granted; and (ii) the quantum of compensation settled was grossly low. So far as the first aspect is concerned. the main judg- ment squarely deals with it and nothing more need be said. As far as the second aspect goes, the argument has been that the principle enunciated by this Court in M.C Mehta v. Union of India, [1987] 1 SCC 395 should have been adopted. The rule in Rylands v. Fletcher [1868] 3 House of Lords 330 has been the universally accepted authority in the matter of determining compensation in tort cases of this type. Ameri- can jurisprudence writers have approved the ratio of that decision and American Courts too have followed the 'decision as a precedent. This Court in paragraph 31 of the Mehta judgment said: "The Rule of Rylands v. Fletcher was evolved in the year 1866 and it provides that a person who for his own purposes brings on to his land and collects and keeps there anything likely to do mischief if it escapes must keep it at his peril and, if he fails to do so, is prima facie liable for the damage which is the natural consequence of its escape. The liability under....
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....ther foreign country. We no longer need the crutches of a foreign legal order. We are certainly prepared to receive light from whatever source it comes but we have to build our own jurisprudence and we cannot countenance an argument that merely because the law in England does not recognise the rule of strict and absolute liability in cases of hazardous or inherently dangerous activities or the rule laid down in Rylands v. Fletcher as developed in England recognises certain limitations and excep tions, we in India must hold back our hands and not venture to evolve a new principle of liability since English courts have not done so. We have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future on account of hazard- ous or inherently dangerous industries which are concommi- tant to an industrial economy, there is no reason why we should hesitate to evolve such principle of liabili- ty merely because it has not been so done in England. We are of the view that an enterprise which is engaged in a haz- ardous or inherently dangerous industry which poses a....
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....ich operate vis-a-vis the tortious principle of strict liability under the rule of Rylands v. Fletcher." In M.C. Mehta's case no compensation was awarded as this Court could not reach the conclusion that Shriram (the delinquent company) came within the meaning of "State" in Article 12 so as to be liable to the discipline of Article 21 and to be subjected to a proceeding under Article 32 of the Constitution. Thus what was said essentially obiter. The extracted part of the conservation from M.C. Mehta's case perhaps is a good guideline for working out compensa- tion in the cases to which the ratio is intended to apply. The statement of the law ex-facie makes a departure from the accepted legal position in Rylands v. Fletcher. We have not been shown any binding precedent from the American Supreme Court where the ratio of M. C. Mehta's decision has in terms been applied. In fact Bhagwati, CJ clearly indicates in the judgment that his view is a departure from the law applica- ble to the western countries. We are not concerned in the present case as to whether the ratio of M.C. Mehta should be applied to cases of the type referred to in it in India. We have to remain co....
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....en, for one reason or another, parties can surmount the substantial barriers which it erects to most people and to many types of claims." We had then thought that the Bhopal dispute came within the last category and now we endorse it. When dealing with this case this Court has always taken a pragmatic approach. The oft-quoted saying of the great American Judge that 'life is not logic but experience' has been remembered. Judges of this Court are men and their hearts also bleed when calamities like the Bhopal gas leak incident occur. Under the constitutional discipline determi- nation of disputes has been left to the hierarchical system of Courts and this Court at its apex has the highest concern to ensure that Rule of Law works effectively and the cause of justice in no way suffers. To have a decree after strug- gling for a quarter of a century with the apprehension that the decree may be ultimately found. not to be executable would certainly not have been a situation which this Court could countenance. In the order of May 4, 1989, this Court had clearly indicated that it is our obligation to uphold the rights of the citizens and to bring to them a judicial fitment ....
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....bsp; "It depends upon the present age whether this great national institution shall descend to our children in its masculine majesty to protect the people and fulfil their great expectations." Let us also remember what Prof. Harry Jones in the Efficacy of Law has said: "There are many mansions in the house of Jurisprudence, and I would not be little any one's perspective on law in society, provided only. that he does not insist that his is the only perspective that gives a true and mean- ingful view of ultimate legal reality." In the facts and circumstances indicated and for the reasons adopted by my noble brother in the judgment. I am of the view that the decree obtained on consent terms for compensation does not call for review. I agree with the majority view. VENKATACHALIAH, J. - These Review Petitions under Arti- cle 137 and Writ Petitions under Article 32 of the Constitu- tion of India raise certain fundamental issues as to the constitutionality, legal-validity, propriety and fairness and conscionability of the settlement of the claims of the victims in a mass-tort-action relating to what is known as the "Bhopal Gas Leak Dis....
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.... technologies. The tragedy took an immediate toll of 2,660 innocent human lives and left tens of thousands of innocent citizens of Bhopal physically impaired or affected in various degrees. What added grim poignance to the tragedy was that the indus- trial-enterprise was using Methyl Iso-cyanate, a lethal toxic poison, whose potentiality for destruction of life and biotic-communities was, apparently, matched only by the lack of a prepackage of relief procedures for management of any accident based on adequate scientific knowledge as to the ameliorative medical procedures for immediate neutralisation of its effects." The toll of life has since gone up to around four thousand and the health of tens of thousands of citizens of Bhopal City has come to be affected and impaired in various degrees of seriousness. The effect of the exposure of the victims to Methyl Isocyanate (MIC) which was stored in considerably large quantities in tanks in the chemical plant of the UCIL which escaped on the night of the 2nd of December 1984 both in terms of acute and chronic episodes has been much discussed. There has been growing body of medical literature evaluating the magnitude....
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....her effects of exposure are statable possibilities. Immediately symptomatic cases showed ocular inflamation affecting visual acuity and respiratory distress owing to pulmonary edema and a marked tending towards general morbid- ity. It is argued that analysis of the case histories of persons manifesting general morbidity trends at various intervals from 3rd December, 1989 upto April, 1990 indicate that in all the severely affected, moderately affected and mildly affected areas the morbidity trend initially showed a decline compared with the acute phase. But the analysis for the later periods, it is alleged, showed a significant trend towards increase of respiratory, opthalmic and general morbidity in all the three areas. It is also sought to be pointed out that the fatal miscarriages in the exposed group was disturbingly higher than in the control group as indicated by the studies carried out by medical researchers. One of the points urged is that the likely long term effects of exposure have not been taken into account in approving the settlement and that the only way the victims' interests could have been protected against future aggrava- tion of their gas related health ha....
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....r principal but an absolute liability on the principals of M.C. Mehta's case. The defences of the UCC, inter-alia, were that UCC was a legal entity distinct in law from the UCIl that factually it never exercised any direct and effective control over UCIL and that its corporate policy itself recognised, and was subject to, the over-riding effect of the municipal laws of the country and therefore subject to the statutes in India which prohibit any such control by a foreign company over its Indian subsidiary, except the exercise of rights as share-holder permitted by-law. The UCC also resisted the choice of the American Forum on the plea of Forum-Non-Conveniens. Union of India sought to demonstrate that the suggested alternative forum before the judiciary in India was not an 'adequate' forum pointing out the essential distinction between the American and Indian systems of Tort Law both substantive and procedural available under and a comparison of the rights, remedies and procedure the competing alternative forums. The nature and scope of a defendant's plea of Forum Non-Conveniens and the scope of an enquiry on such plea have received judicial considerations befo....
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.... of liability itself had been disputed. The contention of the UCC was that in a suit for damages where the basis of the liability was disputed the Court had no power to make an award of interim-compensation. It was urged that in common law-and that the law of India too-in a suit for damages no court could award interim-compensation. Prior to 1980 when the Rules of Supreme Court in England were amended (Amendment No. 2/1980) Courts in United Kingdom refused interim-payments in actions for damages. In Moore v. Assignment Courier 1977 (2) All ER 842 (CA)], it was recog- nised that there was no such power in common law. It was thereafter that the rules of the Supreme Court were amend- ed by inserting Rules 10 and 11 of Order 29 Rules of Supreme Court specifically empowering the High Court to grant inter- im relief in tort injury actions. The amended provision stipulated certain preconditions for the invokability of its enabling provision. But in England Lord Denning in the Court of Appeal thought that even under the common by the court could make an interim award for damages [(See Lim Poh too v. Camden Islington Area Health Authority, (1979 1 AER 332). But his view was disapproved b....
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....nterim payment to be ordered pending a final decision on quantum of damages. These are matters to which consideration should be given. They are, of course, linked; though the remedy for delay may be a matter of judicial administration, it would be seen legislation may be needed to enable an interim award to be made." [See: Jamil Bin Harun v. Young Kamstah: 1984 (1)AC 529, 5381 The District Court sought to sustain the interim award on the inherent powers of the court preserved in Section 151 CPC. But the High Court of Madhya Pradesh thought that appeal to and reliance on Section 151 was not appropriate It invoked Section 9 CPC read with the principle underlying the English Amendment, without its strict pre-conditions. The correctness of this view was assailed by the UCC before this Court in the appeal. On 14th February, 1989 this Court recorded an over-all settlement of the claims in the suit for 470 million U.S. Dollars and the consequential termination of all civil and criminal proceedings. The relevant portions of the order of this Court dated 14th February, 1989 provide: (1) The Union Carbide Corporation shall pay a sum of U.S.....
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....5, and all such civil proceedings in India are hereby transferred to this court and are dismissed with prejudice, and all such crimi- nal proceedings including contempt proceedings stand quashed and accused deemed to be acquit- ted. 2. Upon full payment in accordance with the Court's directions the undertaking given by UCC pursuant to the order dated November 30, 1986 in the District Court, Bhopal stands discharged, and all orders passed in Suit No. 1113 of 1986 and or in any Revision therefrom, also stand discharged." A further order was made by this Court on 15th February, which, apart from issuing directions in paragraphs 1 and 2 thereof as to the mode of payment of the said sum of 470 million U.S. Dollars pursuant to and in terms of the settle- ment, also provided the following: "3. Upon full payment of the sum referred to in paragraph 2 above: (a) The Union of India and the State of Madhya Pradesh shall take all steps which may in future become necessary in order to implement and give effect to this order including but not limited to ensuring that any suits, claims or civil or criminal c....
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....itutional rights of the citizenry, and of the environment, on the permissibility of such ultra-hazardous tech- nologies and to prescribe absolute and deter- rent standards of liability if harm is caused by such enterprises. The prospect of exploita- tion of cheap labour and of captive-markets, it is said, induces multinationals to enter into the developing countries for such econom- ic-exploitation and that this was eminently an appropriate case for a careful assessment of the legal and Constitutional safeguards stem- ming from these vital issues of great contem- porary relevance. On the importance and relevance of these considerations, this Court said: 32. These issues and certain cognate areas of even wider significance and the limits of the adjudicative disposition of some of their aspects are indeed questions of seminal importance. The culture of modern industrial technologies, which is sustained on processes of such pernicious potentialities, in the ultimate analysis, has thrown open vital and fundamental issues of technology options. Associated problems of the adequacy of legal protection against such exploita- tive and hazardous industria....
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....t at Bhopal, on the motion of the plaintiff- Union of India, made an order restraining the UCC by an interlocutory injunction, from selling its assets, paying dividends, buying back debts, etc. during the pendency of the suit. On 30th of November, 1986 the District Court vacated that injunction on the written assurance and under- taking dated 27th November 1986 filed by the UCC to maintain unencumbered assets of three billion U.S. Dollars. One of the points argued in the course of the hearing of these petitions is whether, in the event the order recording the settlement is reviewed and the settlement set aside, the UCC and UCIL would become entitled to the restitution of the funds that they deposited in Court pursuant to and in performance of their obligations under the settlement. The UCC deposited 420 million U.S. Dollars and the UCIL the rupee equivalent of 45 million U.S. Dollars. 5 million U.S. Dollars directed by Judge Keenan to be paid to the Interna- tional Red Cross was given credit to. The petitioners urge that even after setting aside of the settlement, there is no compulsion or obligation to restore to the UCC the amounts brought into Court by it as such a step would pr....
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....mitted that this should not preclude the Union of India from pointing out circumstances in the case which, if accepted, would detract from the legal valid- ity of the settlement. 8. The contentions urged at the hearing in support of these petitions admit of the following formulations: Contention (A): The proceedings before this Court were merely in the nature of appeals against an interlocu- tory order pertaining to the interim-compensa- tion. Consistent with the limited scope and subject-matter of the appeals, the main suits themselves could not be finally disposed of by the settlement. The Jurisdiction of this Court to withdraw or transfer a suit or proceeding to itself is exhausted by Article 139 A of the Constitution. Such transfer implicit in the final disposal of the suits having been impermissible suits were not before the Court so as to be amenable to final disposal by recording a settlement. The settlement is, therefore, without jurisdiction Contention (B): Likewise the pending criminal prosecution was a separate and distinct proceeding unconnected with the suit from the interlocutory order in which the appeals before this Cou....
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....ve function and cannot be made by a judicial act. At all events, grant of such immunity is opposed to public policy and prevents the investigation of serious offences in relation to this horrendous industrial disaster where UCC had inter-alia alleged sabotage as cause of the disaster. Criminal investigation was necessary in public interest not only to punish the guilty but to prevent any recur- rence of such calamitious events in future. Contention (F): The memorandum of settlement and the orders of the Court thereon, properly construed, make the inference inescapable that a part of the consideration for the payment of 470 million U.S. Dollars was the stifling of the criminal prosecutions which is opposed to public-poli- cy. This vitiates the agreement on which the settlement is based for unlawfulness of the consideration. The consent order has no higher sanctity than the legality and validity of the agreement on which it rests. Contention ( G ): The process of settlement of a mass tort action has its own complexities and that a "Fairness-Hearing" must precede the approval of any settlement by the court as fair....
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....ement require to be set aside and the Original Suit No. 1113 of 1986 direct- ed to be proceeded with on the merits? If not, what other reliefs require to be granted and what other directions require to be issued? Re.:Contentions (A) and (B) 9. The contention articulated with strong emphasis is that the court had no jurisdiction to withdraw and dispose of the main suits and the criminal proceedings in the course of hearing of appeals arising out of an interlocutory order in the suits. The disposal of the suits would require and imply their transfer and withdrawal to this court for which, it is contended, the Court had no power under law. It is urged that there is no power to withdraw the suits or pro- ceedings dehors. Article 139-A and the conditions enabling the application of Article 139-A do not, admittedly, exist. It is, therefore, contended that the withdrawal of the suits, implicit in the order of their final disposal pursu- ant to the settlement, is a nullity. It is urged that Arti- cle 139A is exhaustive of the powers of the Court to with- draw suits or other proceedings to itself. It is not disputed that Article 139A in terms does not apply in the acts of the case.....
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....ticle 136 which Article 142 (1) seeks to effectuate, limiting it only to the short compass of the actual dispute before the Court and not to what might necessarily and reasonably be connected with or related to such matter in such a way that their withdrawal to the Apex Court would enable the court to do "complete justice", would stultify the very wide constitutional powers. Take, for instance, a case where an interlocutory order in a matrimonial cause pending in the trial court comes up before the apex court. The parties agree to have the main matter itself either decided on the merits or disposed of by a compromise. If the argument is correct this court would be powerless to with- draw the main matter and dispose it of finally even if it be on consent of both sides. Take also a similar situation where some criminal proceedings are also pending between the litigating spouses. If all disputes are settled, can the court not call up to itself the connected criminal litiga- tion for a final disposal? If matters are disposed of by consent of the parties, can any one of them later turn around and say that the apex court's order was a nullity as one without jurisdiction and that the ....
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....tration of justice. Apart from the jurisdiction and powers conferred on this Court under Arts. 32 and 136 of the Constitution I am of the opinion that this Court retains and must retain, an inherent power and juris- diction for dealing with any extra-ordinary situation in the larger interests of administration of justice and for pre- venting manifest injustice being done. This power must necessarily bc sparingly used only in exceptional circum- stances for furthering the ends of justice. Having regard to the facts and circumstances of this case, I am of the opin- ion that this is a fit case where this Court should enter- tain the present petition of Harbans Singh and this Court should interfere." We find absolutely no merit in this hypertechnical submission of the petitioners' learned counsel. We reject the argument as unsound. A similar ground is urged in support of contention [B] in relation to such withdrawal implicit in the quashing of the criminal proceedings. On the merits of the contention whether such quashing of the proceedings was, in the circum- stances of the case, justified or not we have reached a decision on Contentions IDI and [E]. But on the power of the ....
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....ment or compromise in a represen- tative suit shall be entered into without the leave of the Court expressly recorded in the proceedings; and sub-rule (2) of rule 3B enjoins that before granting such leave the Court shall give notice in such manner as it may think fit in a representative action. Representative suit, again, has been defined under Explanation to the said rule vide clause (d) as any other suit in which the' decree passed may, by virtue of the provisions of this Code or of any other law for the time being in force, bind any person who is not named as party to the suit. In this case, indubitably the victims would be bound by the settlement though not named in the suit. This is a position conceded by all. If that is so, it would be a representative suit in terms of and for the purpose of Rule 3B of Order XXIII of the Code. If the principles of this rule are the principles of natural justice then we are of the opinion that the principles behind it would be applicable, and also that section be applicable, and also that section 4 should be so construed in spite of the difficulties of the process of notice and other difficul- ties of making "i....
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.... consequential order is necessary by the Court. Had it been necessary for this Bench to have passed such a conse- quential order, we would not have passed any such consequential order in respect of the same." 12. 1 .The finding on this contention cannot be differ- ent from the one urged under Contention (I) infra. If the principle of natural justice underlying Order XXIII Rule 3-B CPC is held to apply, the consequences of non-compliance should not be different from the consequences of the breach of rules of natural justice implicit in Section 4. Dealing with that, the Sahu case, having regard to the circumstances of the case, declined to push the effect of non-compliance to its logical conclusion and declare the settlement void. On the contrary, the Court in Sahu's case considered it appropriate to suggest the remedy and curative of an oppor- tunity of being heard in the proceedings for review. In sahu decision the obligation under Section 4 to give notice is primarily on the Union of India. Incidentally there are certain observations implying an opportunity of being heard also before the Court. Even assuming that the right of the affected persons of be....
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....e drawn the dis- tinction between the two types of orders have cautiously refrained from seeking to lay down a comprehensive definition of defects that bring an order into the category that attracts ex debito justitiae the right to have it set aside, save that specifically it includes orders that have been obtained in breach of rules of natural justice." This should conclude the present Contention under C also against the petitioners. Re: Contention (D) 13. This concerns the validity of that part of the orders of the 14th and 15th of February, 1989 quashing and terminating the criminal proceedings. In the order dated 14th February 1989 Clause (3) of the order provides: " and all criminal proceed- ings related to and arising out of the disas- ter shall stand quashed wherever these may be pending." Para 3 of the order dated 15th February, 1989 reads: "Upon full payment of the sum referred to in paragraph 2 above: (a) The Union of India and the State of Madhya Pradesh shall take all steps which may in future become necessary in order to implement and give effect to this o....
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....de are not supportable either as amounting to withdrawal of the prosecution under Section 321 Code of Criminal Procedure, the legal tests of permissibility of which are well settied or as amounting to a compounding of the offences under section 320 Criminal Procedure Code as, indeed, sub-section (9) of section 320 Cr.P.C. imposes a prohibition on such compounding. It is also urged that the inherent powers of the Court preserved under Section 482 Cr. P.C. could not be pressed into service as the principles guiding the adminis- tration of the inherent power could, by no stretch of imagi- nation, be said to accommodate the present case. So far as Article 142 (1) of the Constitution is concerned, it is urged, that the power to do "complete justice" does not enable any order "inconsistent with the express statutory provisions of substantive law, much less, inconsistent with any constitutional provisions" as observed by this Court in Prem Chand Garg v. Excise Commissioner, U.P., Allahabad,[1963] Suppl. 1 SCR 885 at 899-900]. 16. Shri Nariman, however, sought to point out that in Prem Chand Garg&#....
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....orum irrespec- tive of jurisdictional prescriptions. 17. Learned Attorney General submitted that the matter had been placed beyond doubt in Antulay's case where the court had invoked and applied the dictum in Garg's case to a situation where the invalidity of a judicial-direction which, 'was contrary to the statutory provision, namely section 7(2) of the Criminal Law (Amendment) Act, 1952 and as such violative of Article 21 of the Constitution" was raised and the court held that such a direction was invalid. Learned Attorney General said that the power under Article 142 (1) could not be exercised if it was against an express substantive statutory provision containing a prohibition against such exercise. This, he said, is as it should be because justice dispensed by the Apex Court also should be according to law. The order terminating the pending criminal proceedings is not supportable on the strict terms of Sections 320 or 321 or 482 Cr. P.C. Conscious of this, Shri Nariman submitted that if the Union of India as the Dominus Litis through its Attorney-General invited the court to quash the criminal proceedings and the court accepting the request quashed them, the ....
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....y fundamental considerations of public policy. Sri Sorabjee, learned Attorney-General, refering to Garg's case, said that limitation on the powers under Article 142 arising from "inconsistency with express statutory provi- sions of substantive law" must really mean and be understood as some express prohibition contained in any substantive statutory law. He suggested that if the expression 'prohi- bition' is read in place of 'provision' that would perhaps convey the appropriate idea. But we think that such prohibi- tion should also be shown to be based on some underlying fundamental and general issues of publicpolicy and not merely incidental to a particular statutory scheme or pat- tern. It will again be wholly incorrect to say that powers under Article 142 arc subject to such express statutory prohibitions. That would convey the idea that statutory provisions override a constitutional provision. Perhaps, the proper way of expressing the idea is that in exercising powers under Article 142 and in assessing the needs of "complete justice" of a cause or matter, the apex court will take note of the express prohibitions in any substantive statutory provision based on....
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....] 2 SCC 500 at 508, 509 and "If the offence for which a prosecution is being launched is an offence against the society and not merely an individual wrong, any member of the society must have locus to initiate a prosecution as also to resist withdrawal of such prosecution, if initiated."] See Sheonandan Paswan v. State of Bihar & Ors. [1987] 1 SCC 289 at 316]. But Shri Nariman put it effectively when he said that if the position in relation to the criminal cases was that the court was invited by the Union of India to permit the termi- nation of the prosecution and the court consented to it and quashed the criminal cases, it could not be said that there was some prohibition in some law for such powers being exercised under Article 142. The mere fact that the word 'quashing' was used did not matter. Essentially, it was a matter of mere form and procedure and not of substance, The power under Article 142 is exercised with the aid of the principles of Section 321 Cr.P.C. which enables withdrawal of prosecutions. We cannot accept the position urged by the learned Attorney-General and learned counsel for the petitioners that court had no power or jurisdiction to make that orde....
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....he Government as a matter of general policy or expediency uncon- nected with its duty to prosecute offenders under the law, directs the public prosecutor to withdraw from the prosecution and the Public Prosecutor merely does so at the behest." Learned counsel for the petitioners submitted that the case involved the allegation of commission of serious of- fences in the investigation of which the society was vitally interested and that considerations of public interest, instead of supporting a withdrawal, indicate the very oppo- site. The offences relate to and arise out of a terrible and ghastly tragedy. Nearly 4,000 lives were lost and tens of thousands of citizens have suffered injuries in various degrees of severity. Indeed at one point of time UCC itself recoginsed the possibility of the accident having been the result of acts of sabotage. It is a matter of importance that offences alleged in the context of a disaster of such gravity and magnitude should not remain uninvestigated. The shifting stand of the Union of India on the point should not by itself lead to any miscarriage of justice. We hold that no specific ground or grounds for withdraw- al of the prosecutions havi....
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....General also contends that grant of immuni- ty to a particular person or persons may amount ) to a preferential treatment violative of the equality clause. This position seems to be correct. In Apodaca v. Viramontes 13 ALR 1427, it was observed: ". The grant of an immunity is in very truth the assumption of a legislative power....". (P.1433) " The decisive question, then, is whether the district attorney and the district court in New Mexico, absent constitutional provision or enabling statute conferring the power, are authorized to grant immunity from prosecution for an offense to which incrimi- nating answers provoked by questions asked will expose the witness. We are compelled to give a negative answer to this inquiry. Indeed, sound reason and logic, as well as the great weight of authority, to be found both in text books and in the decided cases, affirm that no such power exists in the district attorney and the district court, either or both, except as placed there by constitutional or statutory language. It is unnecesary to do more in this opinion in proof of the statement made than to give a few references to ....
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........ This court necessarily also has weighed concerns of public policy, especially as illuminated by our history and the struc- ture of our government ...." [p. 362] " .... In the case of the President the inquiries into history and policy, though mandated independently by our case, tend to converge. Because the Presidency did not exist through most of the development of common law, any historical analysis must draw its evidence primarily from our constitutional heritage and structure. Historical inquiry thus merges almost at its inception with the kind of "public policy" analysis appropriately under- taken by a federal court. This inquiry in- volves policies and principles that may be considered implicit in the nature of the President's office in a system structured to achieve effective government under a constitu- tionally mandated separation of powers." [p. 362 and 363] " ...... In view of the special nature of the President's constitutional office and functions, we think it appropriate to recog- nise absolute Presidential immunity from damages liability for acts within the "outer perimeter" of his official responsibility. Under the Constitution and....
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.... quashing of the pending prosecution as well as impermissibility of future criminal liability are set-aside. However, in so far as the dropping of the pro- ceedings in contempt envisaged by clause (b) of para 4 of the order dated 15th February, 1989 is concerned, the same is left undisturbed. Contention (e) is answered accordingly. Re.' Contention (F) 26. As we have seen earlier the memorandum of settle- ment as well as the orders of the Court contemplate that with a view to effectuating the settlement there be a termi- nation of pending criminal prosecution with a further stipu- lation for abstention from future criminal proceedings. Petitioners have raised the plea- and learned Attorney General supports them -- that the language of the memorandum of settlement as well as the orders of the court leave no manner of doubt that a part of the consideration for the payment of 470 million US dollars was the stifling of the prosecution and, therefore, unlawful and opposed to public policy. Relying upon Sections 23 and 24 of the Indian Con- tract Act it was urged that if any part of a single consid- eration for one or more objects or any one or any part of any one of several ....
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....or giving effect to a legislation for acquisition and that the surren- der by the Government of its legislative powers which are intended to be used for public good cannot avail the company or operate against the Government as equitable estoppel. It is unnecessary to expand the discussion and enlarge authori- ties. We do not think that the Union of India should be pre- cluded from urging the contention as to invalidity in-the present case. 28. The main arguments on invalidity proceed on the premise that the terms of the settlement and the orderS of 'the court passed pursuant thereto contemplate, amount to and permit a compounding of non-compoundable offences which is opposed to public policy and, therefore, unlawful. The orders of the court based on an agreement whose or part of whose consideration is unlawful have, it is Urged, no higher sanctity than the agreement on which it is based. The orders of the court based on consent of parties do not, so goes the argument, reflect an adjudicative imposition of the court, but merely set the seal of the court on what is essentially an agreement between the parties. It is urged that the validity and durability of a consent order ....
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....ntract on which it was founded". [emphasis added] It is, indeed, trite proposition that a contract whose object is opposed to public policy is invalid and it is not any the less so by reason alone of the fact that the unlaw- ful terms are embodied in a consensual decree. In state of Punjab v. Amar Singh, [1974] 2 SCC 70 at 90, this Court said: After all, by consent or agreement, parties cannot achieve what is contrary to law and a decree merely based on such agreement cannot furnish a judicial amulet against. statutory violation.... The true rule is that the con- tract of the parties is not the less a con- tract, and subject to the incidents of a contract, because there is superadded the command of the Judge". 29. We do not think that the plea of "Accord and Satisfaction" raised by the UCC is also of any avail to it. UCC contends that the funds constituting the subject-matter of the settlement had been accepted and appropriated by Union of India and that, therefore, there was full accord and satisfaction. We find factually that there is no appro- priation of the funds by the Union of India. The funds remain to the credit of the Registrar- General o....
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....tive" and "consideration" has been well recognised in distinguishing whether the doctrine is or is not attracted. 32. The questions that arise in the present case are, first, whether putting an end to the criminal proceedings was a part of the consideration and bargain for the payment of 470 million US :dollars or whether it was merely one of the motives for entering into the settlement and, secondly, whether the memorandum of settlement and orders of this court, properly construed, amount to a compounding of the offences. If, on the con- trary, what was done was that Union of India invited the court to exercise its powers under Article 142 to permit a withdrawal of the prosecution and the expedient of quashing was a mere procedure of recognising the effect of withdraw- al, could the settlement be declared void ? We think that the main settlement does not suffer from this vice. The pain of nullity does not attach to it flowing from any alleged unlawfulness of consideration. We shall set out our reasons presently. Stating the law on the matter, Fry L.J. in Windhill Local Board of Health v. Vint. [1890] 45 Ch.D. 351 at 366 said: "We have therefore....
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....uld have placed it in the power of a private individual to make a profit to himself by doing a great public injury." Narasimha Raju v. E Gurumurthy Raju & Ors. [1963] 3 S.C.R. 687 of this court is a case in point. The first respondent who had filed a criminal complaint in the Magis- trate's Court against the appellant and his other partners alleging of commission of offences under Sections 420, 465, 468 and 477 read with Sections 107, 120B of the Indian Penal Code entered into an agreement with the accused persons under which the dispute between the appellant and the first respondent and others was to be referred to arbitration on the first respondent agreeing to withdraw his criminal complaint. Pursuant to that agreement the complaint was got dismissed, on the first-respondent abstaining from adducing evidence. The arbitration proceedings, the consideration for which was the withdrawal of the complaint, culminated in an award and the first respondent :applied to have the award made a rule of the court. The appellant turned around and challenged the award on the ground that the consideration for the arbitration-agreement was itself unlawful as it was one not to prosecute a n....
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....g of the proceedings. We have said earlier that what was purported to be done was not a compounding of the offences. Though, upon review, we have set aside that part of the order, the consequences of the alleged unlawfulness of consideration must be decided as at the time of the transac- tion. It is here that we see the significance of the concur- ring observations of Chapan J. in Majibar Rahman v. Muk- tashed Hossein, ILR 40 Calcutta page 113 at page 118, who said. "I agree, but desire to carefully confine my reason for holding that the bond was void to the ground that the consideration for the bond was found by the lower Court to be a promise to withdraw from the prosecution in a case the compromise of which is expressly forbidden by the Code of Criminal Procedure." As stated earlier, the arrangement which purported to terminate the criminal cases was one of a purported with- drawal not forbidden by any law but one which was clearly enabled. Whether valid grounds to permit such withdrawal existed or not is another matter. 35. Besides as pointed out by this court in Narasimha Raju's case (supra) the consequence of doctrine of stifling of prose....
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.... as to render the agreement illegal. These decisions are based upon the facts of the cases showing clearly that the agreements or the contracts sought to be enforced were the foundation for the withdrawal of non- compoundable criminal cases and were declared to be unlawful on the ground of public policy wholly void in law and, therefore, unenforce- able. This class of cases has no application, where, as in the present case, there was a pre-existing civil liability based upon ad- justment of accounts between the parties concerned." [emphasis added] Again in Babu Harnarain Kapur v. Babu Ram Swamp Nigam & Anr. [AIR 1941 Oudh 593] this distinction has been pointed out: "Though the motive of the execution of the document may be the withdrawal of a non-compoundable criminal case,-the considera- tion is quite legal, provided there is an enforceable preexisting liability. In the Patna case it was observed that the distinc- tion between the motive for coming to an agreement and the actual consideration for the agreement must be kept carefully in view and this care must be particu- larly exercised in a case where there is a civ....
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....ent and the order dated 4th May, 1989 indicate that no provision was made for such imminent contingencies for the future which even indude the effect of the toxic gas on pregnant mothers result- ing in congenital abnormalities of the children. These aspects, it is urged, would have been appropriately dis- cussed before the Court, had the victims and victimgroups had a "Fairness-Hearing". It is urged that there has been no application of the Court's mind to matters particularly relevant to toxic injuries. The contention is two fold. First is that the settlement did not envisage the possibil- ities of delayed manifestation or aggravation of toxic morbidity, in the exposed population. This aspect, it is urged, is required to be taken care of in two ways: One by making adequate financial provision for medical surveillance costs for the exposed but still latent victims and secondly, by providing in the case of symptomatic victims a "re-opener clause " for meeting contingencies of aggravation of damages in the case of the presently symptomatic victims. The second contention is as to the infirmity of the settlement by an omission to follow the 'Fairness-Hearing' proce....
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....he estimates of compensation based on the medical categorisation of the affected population, a sum of Rs. 440 crores could be esti- mated to be an over-payment and that for all the latent- problems not manifested yet, this surplus of Rs. 440 crores should be a protectable and adequate financial cushion. 41. We may at this stage have a brief look at the work of the medical evaluation and categorisation of the Health Status of the affected persons carried out by the Directorate of Claims. It would appear that as on 31st October, 1990, 6,39,793 claims had been filed. It was stated that a considerably large number of the claimants who were asked to appear for medical evaluation did not turn up and only 3,61,166 of them responded to the notices. Their medi- cal folders were prepared. The total number of deaths had risen to 3,828. The results of medical evaluation and categorisation of the affected persons on the basis of the data entered in their Medical Folders as on 31st October, 1990 are as follows: No. of medical folders prepared 3,61,966 No. of folders evaluated 3,58,712 No. of folders categorised 3,58,712 No injury 1,55,203 Temporary injuries 1,73,382 Permanent injuries 18,9....
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....surveillance costs is manifestly consistent with the public interest in early detection and treatment of disease. Recognition of pre-symptom claims for medical surveillance serves other important public interests. The difficulty of proving causa- tion, where the disease is manifested years after exposure, has caused many commentators to suggest that tort law has no capacity to deter pollutors, because the costs of proper disposal are often viewed by pollutors as exceeding the risk of tort liability ...... " "Other considerations compel recognition of a pre-symptom medical surveillance claim. It is inequitable for an individual,. wrongfully exposed to dangerous toxic chemicals but unable to prove that disease is likely to have to pay his own expenses when medical intervention is clearly reasonable and necessary " "Accordingly, we hold that the cost of medical surveillance is a compensable item of dam- ages where the proves demonstrate, through reliable expert testimony predicated upon the significance and extent of exposure to chemi- cals, the toxicity of the chemicals, the seriousness of the diseases for which individ- uals are at....
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.... assessed once and for all at the trial of such an issue. Even if it is found later that the damage suffered was much greater than was originally supposed, no further action could be brought. It is well settled rule of law that damages resulting from one and the same cause of action must be assessed and recovered once and for all. Two actions, therefore, will not lie against the same defendant for personal injury sustained in the same accident. (See Churls- worth and Percy on Negligence [1990] 8th Edn. Para 43. Indeed, even under the Common Law, as administered in U.K. prior to the introduction of sec.32A of the Supreme Court Act 1981, Lord Denning thought that such special awards were not impermissible. But as pointed out earlier the House of Lords in Lim Poh Choo v. Camden Islington, did not approve that view. Later sec.32A of the Supreme Court Act, 1981 expressly enabled award of provisional damages and Order 37 Rules 7 to 10 (Part II) Rules of Supreme Court provided for the assessment of such further damages. The contention of the UCC is that the common law rule of once and for all damages is unuttered in India unlike in England where split awards are now statutorily enabled....
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....nty principle'. The likelihood of future complica- tions--though they may mean mere assessment or evaluation of mere chances--are also put into the scales in qualifying damages. This principle may, as rightly pointed out by Sri Nariman, take care of the victims who have manifest symp- toms. But what about those who are presently wholly a symp- tomatic and have no material to support a present claim ? Who will provide them medical surveillance costs and if at some day in the future they develop any of the dreaded symptoms, who will provide them with compensation ? Even if the award is an "once and for all" determination, these aspects must be taken into account. 45. The second aspect is the imperative of the exercise of a "Fairness-Hearing" as a condition for the validity of the settlement. Smt. Indira Jaising strongly urged that in the absence of a "Fairness-Hearing" no settle- ment could at all be meaningful. But the question is whether such a procedure is relevant to and apposite in the context of the scheme under the Act. The "Fairness-Hearing" in a certified class of action is a concept in the United States for which a provision is available under rule 23 of US Federal R....
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....also indicated by learned Judge: 'Thus the trial court has a limited scope of review for determining fairness. The very purpose of settlement is to avoid trial of sharply disputed issue and the costs of pro- tracted litigation." "The Court may limit its fairness proceeding to whatever is necessary to aid it in reaching a just and informed decision. 'Flirt v. FMC Corp. 528 F.2d at 1173. An evidentiary hearing is not required." The settlement must, of course, be an informed one. But it will be an error to require its quantum to be co-exten- sive with the suit claim or what, if the plaintiffs fully succeeded, they would be entitled to expect. The Bhopal Gas Disaster (Processing of Claims) Act, 1985, has its own distinctive features. It is a legislation to meet a one time situation. It provides for exclusivity of the right of representation of all claimants by Union of India and for divesting the individual claimants of any right to pursue any remedy for any cause of action against UCC and UCIL. The constitutionality of this scheme has been upheld in the Sahu's case. Sri Nariman contended that the analogy of "Fairne....
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....bstitute of fairness hearing ob- tains. Order 15 Rule 13, Rules of Supreme Court makes provision for orders made in representative actions binding on persons, class or members of a class who cannot be ascer- tained or cannot be readily ascertained. 46. In our opinion, the right of the victims read into section 4 of the Act to express their views on a pro- posed settlement does not contribute to a position analogous to that in United States in which fairness hearings are imperative. Section 4 of the Act to which the right is traceable merely enjoins Government of India to have 'due- regard' to the views expressed by victims. The power of the Union of India under the Act to enter into a compromise is not necessarily confined to a situation where suit has come to be instituted by it on behalf of the victims. Statute enables the Union of India to enter into a compromise even without such a suit. Right of being heard read into sec. 4--and subject to which its constitutionality has been upheld in Sahu's case--subjects the Union of India to a corresponding obligation. But that obligation does not envisage or compel a procedure like a "Fairness-Hearing" as a condition preced....
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....order to do complete justice under Article 142 of the constitution, require retention of the moneys for such period as it may deem fit, in order to satisfy any decree that may be passed in the suit including the enforceable order of the M.P. High Court dated 4th April 1988." 48. It is urged by the learned Attorney General that restitution being in the nature of a proceedings inexecu- tion, the party claiming that benefit must be relegated to the court of first instance to work out its remedies. It is also urged that the UCC did not bring in the funds on the faith of the court's order, but did so deliberately and on its own initiative and choice and deposited the funds to serve its own interest even after it was aware of the insti- tution of the proceedings challenging the settlement in an attempt to effectuate a fait-accompli. It is further said that the order of the High Court directing payment of inter- im compensation of Rs. 250 crores is operative and since the UCC has not sought or obtained any stay of operation of that order, the sums to the extent of Rs. 250 crores should not, at all events, be permitted to be repatriated. Learned Attorney General also sought to point....
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.... received)the benefit of the erroneous decree to make restitution to the other party for what he has lost. This obligation arises automatically on the rever- sal or modification of the decree and neces- sarily carries with it the right to restitu- tion of all that has been done under the erroneous decree; and the court in making restitution is bound to restore the parties, so far as they can be restored, to the same position they were in at the time when the Court by its erroneous action had displaced them from ........... [p.27] In Jai Berham and others v. Kedar Nath Marwari and Others [1922] P.C. 269 at 271 the Judicial Committee noticed that: "The auction-purchasers have parted with their purchasemoney which they paid into Court on the faith of the order of confirmation and certificate of sale already referred to ....... ". and said: "and it would be inequitable and contrary to justice that the judgment- debtor should be restored to this property without making good to the auction-purchaser the moneys which have been applied for his benefit." In L. Guran Ditta v. T.R. Ditta, [1935] PC 12 Lo....
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....nt to the order recording the Settlement, the said order dated 30.11.1986 of the District Court was set-aside by this Court. If the settlement goes, the order dated 30.11.1986 of the District Court will auto- matically stand restored and the UCC would be required to comply with that order to keep and maintain unencumbered assets of the value of US 3 billion dollars during the pendency of the suit. The right of the UCC to obtain the refund of and repatriate the funds shall be subject to the performance and effectuation of its obligations under the said order of 30.11.1986 of the District Court at Bhopal. Till then the funds shall remain within the jurisdiction of this Court and shall not be amenable to any other legal process. The Contention (H) is disposed of accordingly. Re: Contention (1) 54. The contention is that notices to and opportunities for hearing of the victims, whom the Union of India claims to represent, were imperative before the proposed settlement was recorded and this, admittedly, not having been done the orders dated 14th and 15th February, 1989 are nullities as these were made in violation of the rules of natural jus- tice. Shri Shanti Bhushan urged that the i....
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....ve due regard to the views of the victims and that obligation cannot be discharged by the Central Government unless the victims are told that a settlement is proposed, intended or contemplated. It is not necessary that such views would require consent of all the victims. The Central Govt. as the Representative of the victims must have the views of the victims and place such views before the court in such manner it considers necessary before a settlement is entered into. If the victims want to advert to certain aspects of the matter during the proceedings under the Act and settlement indeed is an important stage in the proceedings, opportuni- ties must be given to the victims. Individual notices may not be necessary. The court can, and in our opinion should, in such situation formulate modalities of giving notice and public notice can also be given inviting views of the victims by the help of mass media." " The Act would be bad if it is not construed in the light that notice before any settlement under sec.4 of the Act was required to be giver " [Emphasis Supplied] Shri Shanti Bhushan urged that with these findings and conclusions the only logical resul....
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....ind how an infraction of that should be sought to be removed in accordance with justice. In the facts and the circumstances of this case where sufficient opportunity is available when review application is heard on notice, as directed by Court, no further opportunity is necessary and it cannot be said that injustice has been done. do a great right" after all, it is permissible sometimes "to do a little wrong". In the facts and circumstances of the case, this is one of those rate occasions .......... [Emphasis supplied] Chief Justice Mukharji also observed; But having regard to the urgency of the situation and having regard to the need for the victims for relief and help and having regard to the fact that so much effort has gone in finding a basis for the settlement, we, at one point of time, thought that a post-decisional hearing in the facts and circumstances of this case might be considered to be sufficient compliance with the require- ments of principles of natural justice as embodied under Sec. 4 of the Act. ........ " [p. 63] In the facts and the circumstances of this, therefore, we are of the opinion, to direct that notice should be ....
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....e was no compli- ance with the principles of natural justice but also held that the result of the non-compliance should not be a me- chanical invalidation. The Court suggested curatives. The Court was not only sitting in judicial review of legisla- tion; but was a court of construction also, for, it is upon proper construction of the provisions, questions of consti- tutionality come to be decided. The Court was considering the scope and content of the obligations to afford a hearing implicit in Section 4 of the Act. It cannot be said to have gone beyond the pale of the enquiry when it considered the further question as to the different ways in which that obligation could be complied with or satisfied. This is, in substance, what the Court has done and that is the law of the case. It cannot be said that these observations were made by the way and had no binding force. Sri Garg submitted that when the Union of India did not, even primafacie, probabilise that the quantification re- flected in the settlement was arrived on the basis of ra- tional criteria relevant to the matter, the determination fails as the statutory authority had acted ultra-vires its powers and trusts under the ....
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.... We might recall here that the Privy Council in Calvin v. Carr [1980] AC 576 had expressed its reservations about Megarry J's 'General Rule' in Learv's case. However, the reservations were in the area of domestic jurisdiction, where contractual or Conventional Rules operate. The case did not involve a public law situation. But the House of Lords in Llyod v. Memahan [1987] AC 625 applied the princi- ple to a clearly public law situation. The principle in Leary's might, perhaps, be too broad a generalisation. But the question here is not so much as to the conse- quences of the omission on the part of the Union of India to have "due regard" to the views of the victims on the settle- ment or the omission on the part of the Court to afford an opportunity to the victims of being heard before recording a settlement as it is one of the effects and implications of the pronouncement in Sahu case which is the law of the case. In Sahu case the Court , expressly held that the non-compli- ance with the obligation to issue notices did not, by such reason alone, in the circumstances of the case, vitiate the settlement, and that the affected persons may avail them- selv....
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.... settlement as a mere proposal to settle. Shri Nariman said that the Court could either review the orders dated 14th and 15th February, 1989 if legal grounds for such review under law were strictly made out or dismiss the review petitions if petitioners fail to make out a case in accordance with the accepted principles regulating the review jurisdiction; but the court could not adopt an in- termediate course by treating the settlement as a proposed or provisional settlement and seek now to do what the Union of India was expected to do before the settlement was reached. 59. The whole issue, shorn of legal subtleties, is a moral and humanitarian one. What was transacted with the court's assistance between the Union of India on one side and the UCC on the other is now sought to be made binding on the tens of thousands of innocent victims who, as the law has now declared, had a right to be heard before the settle- ment could be reached or approved. The implications of the settlement and its effect on the lakhs of citizens of this country are, indeed, crucial in their grim struggle to reshape and give meaning to their torn lives. Any paternal- istic condescension that what has be....
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....t. 226 of the Constitution does not confer any power on the High Court to review its own order and, there- fore, the second order of Khosla, J, was without jurisdiction." This Court rejected the contention observing that: "It is sufficient to say that there is nothing in Art. 226 of the Constitution to preclude a High Court from exercising the power of review which inheres in every court of plenary juris- diction to prevent miscarriage of justice or to correct grave and palpable errors committed by it. Here the previous order of Khosla, J., affected the interests of persons who are not made parties to the proceedings before him. It was at their instance and for giving them a hearing that Khosla, J., entertained the second petition. In doing so, he merely did what the principles of natural justice required him to do. It is said that the respondents before us had no right to apply for review because they were not parties to the previous proceedings. As we have already pointed out, it is precisely because they were not made parties to the previous proceedings, though their interests were sought to be affected by the decision of the High Court, that the s....
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....ole exercise of medical documentation is faulty and is designed and tends to exclude genuine victims. These contentions are really not directly germane to the question of the validity of the settlement. However, they were put forward to discredit the statistics emerging from the medical documentation done by the Directorate of Claims on which the UCC sought to rely. We may as well deal with these two contentions. 62. The first contention is that the claims of a large number of persons who had filed their claims are not regis- tered on the ground that they did not respond to the notices calling upon them to undergo the requisite medical tests for medical documentation. It was urged that no effective serv- ice of notice had taken place and that the claims of a large number of claimants---according to them almost over 30% of the total number---- have virtually gone for default. While the victim-groups allege that there was a systematic attempt to suppress the claims, the Directorate of Claims would say that the lack of response indicated that the claims were speculative and spurious and, therefore, the claimants did not offer themselves to medical examination. In order to appreciat....
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....ation was required related presumably to the exercise under sub-paragraph (3) of Para 5 of the Scheme. Failure of a claimant to respond to the notice and offer himself for medical examination would entail a refusal to register the claim. It is manifest that such a refusal is apealable under the scheme. But this grievance does not survive in view of the stand taken by the Government in these proceedings. In the affidavit of Sri Ramesh Yashwant Durve, dated 5th December, 1989 in W.P. No. 843/88, it is stated:- "That all claimants who did not respond to the first notice were given a second and then a third notice to appear at one of the medical documentation centers for their medical exami- nation. Wide publicity was also done by way of beating of drums in mohallas, radio announce- ments and newspaper advertisements. In addi- tion to all these, ward committee members were also involved in motivating the claimants to get themselves medically examined. All those claimants who approach the Director of Claims even now are given a fresh date on which to appear for medical examination and are in- formed accordingly. Although the medica....
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.... in post-exposure period prescrip- tions were issued. Besides this, private practitioners were also issuing prescriptions in printed form. It is therefore incorrect to say that there is dearth of documentation. However, bearing this point in mind, a very liberal approach in admitting documents was adopted as will be clear from the guidelines for evaluation. It will also be relevant here to state that the claimants are being helped to get the benefit of any medical records available in any hospital or dispensary. Institutions like ICMR, COM (Gas Relief), Jawahar Lal Nehru Hospital, Bhopal Eye Hospi- tal, Indian Red Cross Society, BHEL Hospital and the Railway Hospital have treated numerous gas victims during the post-exposure period. The relevant medical records from them have been retrieved and are being linked with the respective claim folders so that the benefit of such post-exposure record is extended to these claimants. It will be irrational and unscientific to admit all claims without reference to any documentary evidence as suggested by the petitioner ........ (See the affidavit dated 5th December, 1989 of Sri Ramesh Yeshwant Durve ....
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....st's opinions and investigation re- ports." The Additional Director accordingly assests: "...it will be meaningless to suggest that the Govt. is jeopardising the interests of the claimants by deliberately distorting the Medical Documentation Exercise. Similarly, it will be absurd to suggest that the Govt. is trying to help UCC in any way." The Additional Director also refers to the attempts by unscrupulous persons to exploit the situation in pursuit of unjust gains and how the authorities had to encounter at- tempts of impersonation and "attempts by claimants to pass of other's urine as their own." It was said that there were urine-donors. The affidavit also discloses certain real practices involving medical prescriptions and certificates by some members of the medical profession and ante-dated urine-thiocynate estimations. The Additional Director says that despite all this Government endeavoured to give the benefit to the claimants wherever possible. It is stated: 'The State Govt. had to preserve the scientif- ic character and ensure the credibility of the exercise of evaluation. Beating this limita- tion in....
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....y that the medical documenta- tion and categorisation based thereon, of the victims' medical status done by the Directorate of Claims is faulty. The charge that medical documentation was faulty and was calculated to play down the iII-effects of the exposure to MIC is, in our opinion, not substantiated. This attack itself implies that if the categorisation of the claimants on the basis of the severity of the injuries is correct then the settlement-fund may not, as a settlement, be unreasona- ble. 66. At the same time, it is necessary to remind our- selves that in bestowing a second thought whether the set- tlement is just, fair and adequate. We should not proceed on the premise that the liability of the UCC has been firmly established. It is yet to be decided if the matter goes to trial. Indeed, UCC has seriously contested the basis of its alleged liability. But it is true that even to the extent a settlement goes, the idea of its fairness and adequacy must necessarily be related to the magnitude of the problem and the question of its reasonableness must be assessed putting many considerations into the scales. It may be hazardous to belittle the advantages of the settlement i....
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....hat easier to recover damages under personal injury law for alleged injuries suffered as a consequence of activities of others. On the other side of the same issue are defendants, potential defendants (typically corporations, manufacturing firms) and, interestingly, the scientific community." [Page 118] In Sterling v. Velsicol Chemical Corp. (855 F 2d 1188 (1988)) the US Court of Appeals tended to the view that generalised proof of damages is not sufficient to prove individual damages and that damages in mass tort personal injury cases must be proved individually by each individual plaintiff. The Court held: "We cannot emphasise this point strongly enough because generalised proof will not suffice to prove individual damages. The main problem on review stems from a failure to differentiate between the general and the particular. This is an understandably easy trap to fall into in mass tort litigation. Although many common issues of fact and law will be capable of resolution on a group basis, individual particularised damages still must be proved on an individual basis." 68. While Shri Nariman contends that admissibility of scientific and statistical e....
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....is acts. In such case, while the damages may not be determined by mere specula- tion or guess, it will be enough if the evidence show the extent of the damages as a matter of just and reasonable inference, although the result be only approximate. The wrongdoer is not entitled to complain that they cannot be measured with the exactness and precision that would be possible if the case, which he alone is responsible for making,were otherwise.' And in Frederick Thomas Kingsley v. The Secretary of State for India, (AIR 1923 Calcutta 49), it was observed: "Shall the injured party be allowed to recover no damages (or merely nominal) because he cannot show the exact amount of the certainty, though he is ready to show, to the satisfac- tion of the Jury, that he has suffered large damages by the injury ? Certainty, it is true, would be thus attained, but it would be the certainty of injustice. Juries are allowed to act upon probable and inferential, as well as direct and positive proof. And when, from the nature of the case, the amount of damages cannot be estimated with certainty, or only a part of them can be so estimated, we can see no objection to placing ....
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....ated and categorised nearly 3,60,000 affected persons. We have looked into the formats and folders prepared by the Directorate of Claims for the medical evaluation of the conditions of the victims. Some sample medical dossiers pertaining to some individual claimants containing an evaluation of the data pertaining to the medical status of the persons have also been shown to us. It is on the basis of such medical dossiers that evalua- tion and categorisation are stated to have been done. The guidelines for carrying out these medical evaluations, it is stated, have been formulated and issued by the Government of India. 71. Petitioners seriously assail the correctness of the guidelines for medical evaluation as also the result of the actual operational processes of evaluation based thereon. Petitioners described the results indicated by the medical categorisation done by the Directorate of Claims which showed only 40 cases of total permanent disablement as shocking and wholly unrelated to the realities. Indeed, some learned counsel for the petitioners, of course in a lighter vein, remarked that if these were the final figures of injuries and incapacitations caused by the Bhopal Gas ....
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....oners had urged that the principles of the liability and the standards of assessment of damages in a toxic mass tort arising out of a hazardous enterprise should be not only on the basis of absolute liability-not merely on Rylands v. Fletcher principle of strict liability--not admitting of any exceptions but also that the size of the award be propor- tional to the economic superiority of the offender, contain- ing a deterrent and punitive element. Sustenance was sought from M.C. Mehta v. Union of India, AIR 1987 SC 1086. This argument in relation to a proceeding assailing a settlement is to be understood as imputing an infirmity to the settle- ment process as not being informed by the correct principle of assessment of damages. Respondents, however, raised several contentions as to the soundness of the Mehta princi- ple and its applicability. It was also urged that Mehta principle, even to the extent it goes, does not solve the issues of liability of the UCC as distinct from that of UCIL as Mehta case only spoke of the liability of the offending enterprise and did not deal with principles guiding the determination of a holding-company for the torts of its subsidiaries. It is not....
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....penses for providing free treatment and services to the victims should, both on humanitarian consid- erations and in fulfilment of the offer made before the Bhopal court, be borne by the UCC and UCIL. We are conscious that it is not part of the function of this Court to re- shape the settlement or restructure its terms. This aspect of the further liability is also not a matter on which the UCC and the UCIL had an opportunity to express their views. However, from the tenor of the written submissions made before the District Court at Bhopal in response to the proposal of the Court for "reconciliatory substantial inter- im relief" to the gas victims, both the UCC and UCIL had offered to fund and provide a hospital for the' gas victims. The UCC had re-called that in January, 1986, it had offered "to fund the construction of hospital for the treatment of gas victims the amount being contributed by the UCC and the UCIL in equal proportions". Shri Nariman had also referred to this offer during the submissions in the context of the bona fides of the UCC in that behalf. It is, no doubt, true that the offer was made in a different context and before an overall settlement. But that should....
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.... toxicity inherited or derived congenitally. In so far as the second class of cases is concerned, some aspects have been dealt with in the report of the Law Commission in United Kingdom on "Injuries to Unborn Chil- dren". The Commission, referring to the thenexisting Law, said: "7. Claims for damages for pre-natal injuries have been made in many other jurisdictions but there is no English or Scottish authority as to whether a claim would lie and, if it did, what rules and limitations should govern it. In our working paper we did not attempt to forecast how such a claim would be decided if it came before a court in this country, al- though we did add, as an appendix to the paper, a brief account of some of the deci- sions of courts in other jurisdictions..." "8. It is, however, important from our point of view to express our opinion (reinforced by our general consultation and supported by the report of the Scottish Law Commission) that it is highly probable that the common law would, in appropriate circumstances, provide a remedy for a plaintiff suffering from a pre-natal injury caused by another's fault. It is impor- tant to make our opinion on this point clear because....
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....ecretarial assistance to start the adjudication of the claims under the Scheme. 79. In the matter of disbursement of the amounts so adjudicated and determined it will be proper for the author- ities administering the funds to ensure that the compensa- tion-amounts, wherever the beneficiaries are illiterate and are susceptible to exploitation, are properly invested for the benefit of the beneficiaries so that while they receive the income therefrom they do not, owing to their illiteracy and ignorance, deprive themselves of what may turn out to be the sole source of their living and sustenance for the future. We may usefully refer to the guide-lines laid down in the case of Muljibhai Ajarambhai Harijan & Anr. v. United India Insurance Co. Ltd.& Ors., 1982 (1) Gujarat Law Report- er 756. We approve and endorse the guidelines formulated by the Gujarat High Court. Those guidelines, with appropriate modifications, could usefully be adopted. We may briefly recapitulate those guidelines: (i) The Claims Commissioner should, in the case of minors, invariably order the amount of compensation awarded to the minor to be invested in long term fixed depos- its at least till the date of the ....
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....t Bhopal and dispose of the same in terms of the settlement and the further contention that, similarly, the Court had no jurisdiction to withdraw the criminal proceedings are reject- ed. It is held that under Article 142(1) of the Constitution, the Court had the necessary jurisdiction and power to do so. Accordingly, contentions (A) and (B) are held and answered against the petitioners. (ii) The contention that the settlement is void for non-compliance with the requirements of Order XXIII Rule 3B, CPC is rejected. Contention (C) is held and answered against the petitioners. (iii) The contention that the Court had no jurisdiction to quash the criminal proceedings in exercise of power under Article 142(1) is rejected. But, in the particular facts and circumstances, it is held that the quashing of the criminal proceedings was not justified. The criminal proceedings are, accordingly, directed to be proceeded with. Contention (D) is answered accordingly. (iv) The orders dated 14th 15th of February, 1989 in so far a, they seek to prohibit future criminal proceedings are held no to amount to a conferment of criminal immunity; but are held to be merely cons....
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....ospital with at least 500 beds strength, with the best of equipment and facilities should be established. The facilities shall be provided free of cost to the victims at least for a period of 8 years from now. The state Government shall provide suitable land free of cost. (d) In respect of the population of the affected wards, [excluding those who have filed claims], Government of India shall take out an appropriate medical group insurance cover from the Life Insurance Corporation of India or the General Insurance Corporation of India for compensation to those who, though presently asymtomatic and filed no claims for compensation, might become symptomatic in future and to those later-born children who might manifest congenital or prenatal MIC related afflictions. There shall be no upper individual monetary limit for the insurance liability. The period of insurance shall be for a period of eight years in future. The number of persons to be covered by this group shall be about one lakh persons. The premia shall be paid out of the settlement fund. (e) On humanitarian consideration and in fulfilment of the offer made earlier, the UCC and UCIL should agree to bear the financial bu....
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....uestion re- ferred to the Bench was in regard to the constitutional validity of the said enactment, submissions were made on the question whether the impugned settlement was liable to be set aside on the ground that it was in flagrant violation of the principles of natural justice, in that, the victims as well as the victim-groups had no opportunity to examine the terms of the settlement and express their views thereon. Mukharji, CJ. who spoke for the majority (Ranganathan, J. and myself expressing separately) observed that on the materials available "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". It was felt that though the settlement without notice to the victims was not quite proper, justice had in fact been done to the victims but did not appear to have been done. Taking the view that in enter- ing upon the settlement regard should have been had to the views of the victims and for that purpose notices should have been issued before arriving at the settlement, the majority held that "post- decisional notice might be suffi- cient but in the facts and circumstances of this case, no useful purpose....
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....final opinion on the validity of the settlement but would leave it open to be agitated to the extent permissible in law in the review petition pending before this Court." It is, therefore, manifest from the above that the Sahu Bench was 'prima facie' of the view that the settlement was not liable to be set aside on the ground that the principles of natural justice had been violated. Mukharji, CJ. went on to say that no useful pur- pose would be served by a post-decisional hearing and that the settlement was quite reasonable and fair. Of course K.N. Singh, J. did not express any opinion on the inadequacy of the settlement amount but he was otherwise in agreement with the view expressed by Mukharji, CJ. on all the other points. The view of Ranganathan, J. and myself is evident from the passage extracted above. This case has gone through several twists and turns. One of the world's worst disaster occurred on the night between 2nd and 3rd December, 1984 choking several tO death and injuring thousands of residents living near about the indus- trial plant of UCIL. Litigation was initiated on behalf of some of the victims in the U.S. District Court, Southern District of ....
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....od his point that news- papers having large circulation throughout the country carried news regarding the settlement and subsequent at- tempts to challenge the same. Can it then be said that the victims were unaware of the proceedings before this Court ? To say so would be to ignore the obvious. In view of the observations in Sahu's case, the scope of the inquiry in the present petitions can be said to be. a narrow one. One way of approaching the problem is to ask what the Court could have done if a pre-decisional hearing was afforded to the victims. The option obviously would have been either to approve the terms of the compromise, or to refuse to super add the Court's seal to the settlement and leave the parties to go to trial. The Court could not have altered, varied or modified the terms of the settlement without the express consent of the contracting parties. If it were to find the compensation amount payable under the settlement inadequate, the only option left to it would have been to refuse to approve the settlement and turn it into a decree of the Court. It could not have unilaterally imposed any additional liability on any of the contracting parties. If it foun....