No 268 of 1989 etc
Under Article 32 of the Constitution of India
K Parasaran Attorney General RK Garg Ms Indira Jaising LN Sinha Dr V Gauri Shankar Vepa P Sarathi Shanti Bhushan Rakesh Luthra CL Sahu Indeevar Goodwill NS Malik NS Pundir RC Kaushik DK Garg Rajeev Dhawan Miss Kamini 620 Jaiswal Anip Sachthey RC Pathak HD Pathak Harish Uppal SK Gambhir Gopal Subramanium DS Shastri Arun Sharma Miss A Subhashini CVS Rao Satish K Agnihotri Ashok Kumar Singh RK Jain Kailash Vasdev and Prashant Bhushan for the appearing parties
The Judgments of the Court were delivered by SABYASACHI MUKHARJI CJ 1
Is the hereinafter referred to as the Act  is constitutionally valid That is the question
The Act was passed as a sequel to a grim tragedy
On the night of 2nd December 1984 occurred the most tragic industrial disaster in recorded human history in the city of Bhopal in the State of Madhya Pradesh in India
On that night there was massive escape of lethal gas from the MIC storage tank at Bhopal Plant of the Union Carbide I Ltd hereinafter referred to as UCIL  resulting in large scale death and untold disaster
A chemical plant owned and oper ated 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 5099 of its shareholdings were owned by the Union Carbide Corporation UCC a New York Corporation LIC and the Unit Trust of India own 22 of the shares of UCIL a subsidiary of UCC 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 substan tial quantities
the exact reasons for and circumstances of such leakage have not yet been ascertained or clearly estab lished
The results of the disaster were horrendous
Though no one is yet certain as to how many actually died as the immediate and direct result of the leakage estimates at tribute it to about 3000
Some suffered injuries the ef fects of which are described as Carcinogenic and ontogenic by Ms Indira Jaisingh learned counsel some suffered injuries serious and permanent and some mild and temporary
Livestock was killed damaged and infected
Businesses were interrupted
Environment was polluted and the ecology af fected flora and fauna disturbed
621 4
On 7th December 1984 Chairman of UCC Mr Warren Anderson came to Bhopal and was arrested
He was later released on bail
Between December 1984 and January 1985 suits were filed by several American lawyers in the courts in America on behalf of several victims
It has been stated that within a week after the disaster many American law yers described by some as ambulance chasers  whose fees were stated to be based on a percentage of the contingency of obtaining damages or not flew over to Bhopal and ob tained Powers of Attorney to bring actions against UCC and UCIL
Some suits were also filed before the District Court of Bhopal by individual claimants against UCC the American Company and the UCIL
On or about 6th February 1985 all the suits in various US Distt
Courts were consolidated by the Judicial Panel on Multi District Litigation and assigned to US Distt
Court Southern Distt
of New York
Judge Keenan was at all material times the Presiding Judge there
On 29th March 1985 the Act in question was passed
The Act was passed to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with speedily effectively and equitably
On 8th April 1985 by virtue of the Act the Union of India filed a complaint before the US Distt
Court Southern Distt
of New York
On 16th April 1985 at the first pre trial conference in the consolidated action transferred and assigned to the US Distt
Court Southern Distt
 New York Judge Keenan gave the following directions i that a three member Executive Committee be formed to frame and develop issues in the case and prepare expeditiously for trial or settle ment negotiations
The Committee was to com prise 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
On 24th September 1985 in exercise of powers con ferred 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
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On 12th May 1986 an order was passed by Judge Keenan allowing the application of UCC on forum non convenience as indicated hereinafter
On 21st May 1986 there was a motion for fairness hearing on behalf of the private plaintiffs
On 26th June 1986 individual plaintiffs filed appeal before the US Court of Appeal for the second circuit challenging the order of Judge Keenan
By an order dated 28th May 1986 Judge Keenan declined the motion for a fairness hearing
The request for fairness hearing was rejected at the instance of Union of India in view of the meagerness of the amount of proposed settlement
On 10th July 1986 UCC filed an appeal before the US Court of Appeal for the Second Circuit
It challenged Union of India being entitled to American mode of discovery but did not challenge the other two conditions imposed by Judge Keenan it is stated
On 28th July 1986 the Union of India filed cross appeal before the US Court of Appeal praying that none of the conditions imposed by Judge Keenan should be disturbed
In this connection it would be pertinent to set out the conditions incorporated in the order of Judge Keenan dated 12th May 1986 whereby he had dismissed the case before him on the ground of forum non convenience as mentioned before
The conditions were fol lowing 1
That UCC shall consent to the jurisdiction of the courts of India and shall continue to waive defenses based on the statute of limita tion 2
That UCC shall agree to satisfy any judg ment rendered by an Indian court against it and if applicable upheld on appeal provided the judgment and affirmance comport with minimal requirements of due process and 3
That UCC shah be subject to discovery under the Federal Rules of Civil Procedure of the US after appropriate demand by the plaintiffs
On 5th September 1986 the Union of India filed a suit for damages in the Distt
Court of Bhopal being regu lar suit No H 1386
It is this suit inter alia and the orders passed therein which were settled by the orders of this Court dated 14th  15th February 1989 which will be referred to later
On 17th November 1986 upon the applica tion of the Union of India the Distt
Court Bhopal grant ed a temporary injunction restraining the UCC from selling assets paying dividends or buying back debts
On 27th November 1986 the UCC gave an undertaking to preserve and maintain unencumbered assets to the extent of 3 billion US dollars
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On 30th November 1986 the Distt
Court Bhopal lifted the injunction against the Carbide selling assets on the strength of the written undertaking by UCC to maintain unencumbered assets of 3 billion US dollars
On 16th Decem ber 1986 UCC filed a written statement contending that they were not liable on the ground that they had nothing to do with the Indian Company and that they were a different legal entity and that they never exercised any control and that they were not liable in the suit
Thereafter on 14th January 1987 the Court of Appeal for the Second Circuit affirmed the decision of Judge Keenan but deleted the condi tion 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 provi sions of the Recognition of Foreign Country Money Judgments Act
On 2nd April 1987 the court made a written propos al 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 possibili ty of settlement was there long before the full and final settlement was effected
He sought to draw our attention to the assertion that the persons concerned were aware that efforts were being made from time to time for settlement
However in November 87 both the Indian Govt
and the Union Carbide announced that settlement talks had failed and Judge Deo extended the time
The Distt
Judge of Bhopal on 17th December 1987 ordered interim relief amounting to Rs350 crores
Being aggrieved thereby the UCC filed a Civil Revision which was registered as Civil Revision Petition No 2688 and the same was heard
On or about 4th February 1988 the Chief Judi cial Magistrate of Bhopal ordered notice for warrant on Union Carbide Hong Kong for the criminal case filed by CBI against Union Carbide
The charge sheet there was under sections 304 324 326 429 of the Indian Penal Code read with section 35 IPC and the charge was against SShri Warren Anderson Keshub Mahindra
Vijay Gokhale J Mukund Dr RB Roy Chowdhay
SP Chowdhary KV Shetty S1
Qureshi and Union Carbide of USA Union Carbide of Hong Kong and Union Carbide having Calcutta address
It charged the Union Carbide by saying that MIC gas was stored and it was further stated that MIC had to be stored and handled 624 in stainless steel which was not done
The charge sheet inter alia stated that a Scientific Team headed by Dr Varadarajan had concluded that the factors which had led to the toxic gas leakage causing its heavy toll existed in the unique properties of very high reactivity volatility and inhalation toxicity of MIC
It was further stated in the charge sheet that the needless storage of large quantities of the material in very large size containers for inordi nately long periods as well as insufficient caution in design in choice of materials of construction and in provi sion of measuring and alarm instruments together with the inadequate controls on systems of storage and on quality of stored materials as well as lack of necessary facilities for quick effective disposal of material exhibiting instability led to the accident
It also charged that MIC was stored in a negligent manner and the local administration was not informed inter alia of the dangerous effect of the expo sure of MIC or the gases produced by its reaction and the medical steps to be taken immediately
It was further stated that apart from the design defects the UCC did not take any adequate remedial action to prevent back flow of solution from VGS into RVVH and PVH lines
There were various other acts of criminal negligence alleged
The High Court passed an order staying the operation of the order dated 171287 directing the defendant applicant to deposit Rs3500 mil lions 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 Rs250 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 restrain ing 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 reduc tion of quantum of compensation from Rs350 crores to Rs250 crores
Thereafter these matters were heard in November December 88 by the bench presided over by the learned Chief Justice Of India and hearing continued also in January Feb ruary 89 and ultimately on 14 15th February 1989 the order culminating in the settlement was passed
In judging the constitutional validity of the Act the subsequent events namely how the Act has worked itself out have to be looked into
It is therefore necessary to refer to the two orders of this Court
The proof of the cake is in its eating it is said and it is perhaps not possible to ignore the terms of the settlement reached on 14th and 625 15th February 1989 in considering the effect of the lan guage used in the Act
Is that valid  or proper or has the Act been worked in any improper way These questions do arise
On 14th February 1989 an order was passed in CA Nos
3187 8888 with SLP C No 1308088
The parties thereto were UCC and the Union of India as well as Jana Swasthya Kendra Bhopal Zehraeli Gas Kand Sangharsh Morcha Bhopal
That order recited that having considered all the facts and the circumstances of the case placed before the Court the material relating to the proceedings in the Courts in the United States of America the offers and counter offers made between the parties at different stages during the various proceedings as well as the complex issues of law and fact raised and the submissions made thereon and in particular the enormity of human suffering occasioned by the Bhopal Gas disaster and the pressing urgency to provide immediate and substantial relief to victims of the disaster the Court found that the case was preeminently fit for an overall settlement between the parties covering all litigations claims rights and liabil ities relating to and arising out of the disaster and it was found just equitable and reasonable to pass inter alia the following orders lm 1 The Union Carbide Corporation shall pay a sum of US Dollars 470 million Four hundred and seventy millions to the Union of India in full settlement of all claims fights and liabilities related to and arising out of Bhopal Gas disaster
2 The aforesaid sum shall be paid by the Union Carbide Corporation to the Union of India on or before 31st March 1989
3 To enable the effectuation of the settlement all civil proceedings related to and arising out of the Bhopal Gas disaster shall hereby stand transferred to this Court and shall stand concluded in terms of the settlement and all criminal proceedings related to and arising out of the disaster shall stand quashed wherever these may be pending 15
A written memorandum was filed thereafter and the Court on 15th February 1989 passed an order after giving due consideration thereto
The terms of settlement were as follows 626 1
The parties acknowledge that the order dated February 14 1989 disposes of in its entirety all proceedings in Suit No 1113 of 1986
This settlement shall finally dispose of all past present and future claims causes of action and civil and criminal proceedings of any nature whatsoever wherever pending by all Indian citizens and all public and private entities with respect to all past present or future deaths personal injuries health effects compensation losses damages and civil and criminal complaints of any nature whatsoever against UCC Union Carbide India Limited Union Carbide Eastern and all of their subsidiaries and affiliates as well as each of their present and former directors officers employees agents representatives attorneys advocates and solicitors arising out of relating to or connected with the Bhopal gas leak disaster including past present and future claims causes of action and proceedings against each other
All such claims and causes of action whether within or outside India of Indian citizens public or private entities are hereby extinguished including without limitation each of the claims filed or to be filed under the Bhopal Gas Leak Disaster Registration and Processing of Claims Scheme 1985 and all such civil proceedings in India are hereby transferred to this Court and are dismissed without preju dice and all such criminal proceedings in cluding contempt proceedings stand quashed and accused deemed to be acquitted
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
It appears from the statement of objects  reasons of the Act that the Parliament recognized that the gas leak disaster involving the release on 2nd and 3rd December 1984 of highly noxious and abnormally dangerous gas from a plant of UCIL a subsidiary of UCC was of an unprecedented nature which resulted in loss of life and damage to proper ty on an extensive scale as mentioned before
It was stated that the victims who had managed to survive were still suffering from the adverse effects and the further complica tions which might arise in their cases of course could not be fully visualised
It was asserted by 627 Ms Indira Jaising that in case of some of the victims the injuries were carcinogenic and ontogenic and these might lead to further genetic complications and damages
The Central Govt
and the Govt
of Madhya Pradesh and various agencies had to incur expenditure on a large scale for containing the disaster and mitigating or otherwise coping with the effects thereto
Accordingly the Bhopal Gas Leak Disaster Processing of Claims Ordinance 1985 was promul gated which provided for the appointment of a Commissioner for the welfare of the victims of the disaster and for the formulation of the Scheme to provide for various matters necessary for processing of the claims and for the utilisa tion by way of disbursal or otherwise of amounts received in satisfaction of the claims
Thereafter the Act was passed which received the assent of the President on 29th March 1985
Section 2b of the Act defines claim 
It says that claims means i a claim arising out of or connected with the disaster for compensation or damages for any loss of life or personal injury which has been or is likely to be suffered ii a claim arising out of or connected with the disaster for any damage to property which has been or is likely to be sustained iii a claim for expenses incurred or required to be incurred for containing the disaster or mitigating or otherwise coping with the effects of the disaster iv any other claim including any claim by way of loss of business or employment arising out of or connected with the disas ter
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
Section 3 is headed Power of Central Govt
to represent claimants
It provides as follows 31 Subject to the other provisions of this Act the Central Government shall and shall have the exclusive right to represent and act in place of whether within or outside India every person who has made or is enti tled to make a claim for all purposes con nected with such claim in the same manner and to the same effect as such persons
2 In particular and without prejudice to the generality of 628 the provisions of sub section 1 the pur poses referred to therein include a Institution of any suit or other proceed ing in or before any court or other authority whether within or outside India or withdraw al of any such suit or other proceeding and b entering into a compromise
3 The provisions of sub section 1 shall apply also in relation to claims in respect of which suits or other proceedings have been instituted in or before any court or other authority whether within or outside India before the commencement of this Act Provided that in the case of any such suit or other proceeding with respect to any claim pending immediately before the commencement of this Act in or before any court or other authority outside India the Central Govt
shall represent and act in place of or along with such claimant if such court or other authority so permits
Section 4 of the Act is headed as Claimant s right to be represented by a legal practitioner
It provides as follows Notwithstanding anything contained in section 3 in representing and acting in place of any person in relation to any claim the Central Government shall have due regard to any matters which such person may require to be urged with respect to his claim and shall if such person so desires permit at the expense of such person a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim
Section 5 deals with the powers of the Central Govt
and enjoins that for the purpose of discharging its func tions under this Act the Central Govt
shall have the powers of a civil court while trying a suit under the Code of Civil Procedure 1908
Section 6 provides for the ap pointment of a Commissioner and other officers and employ ees
Section 7 deals with powers to delegate
Section 8 deals with limitation while section 9 deals with the power to frame Scheme
The Central Govt was enjoined to frame a scheme which was to take into account inter alia the processing of the claims for securing their enforcement creation of a fund for meeting expenses in connection 629 with the administration of the Scheme and of the provisions of this Act and the amounts which the Central Govt
might after due appropriation made by the Parliament by law in that behalf credit to the fund referred to in clauses above and any other amounts which might be credited to such fund
Such Scheme was enjoined as soon as after it had been framed to be laid before each House of Parliament
Section 10 deals with removal of doubts
Section 11 deals with the overriding effect and provides that the provisions of the Act and of any Scheme framed thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than the Act or any instrument having effect by virtue of any enactment other than the Act
A Scheme has been framed and was published on 24th September 1985
Clause 3 of the said Scheme provides that the Deputy Commissioners appointed under Section 6 of the Act shall be the authorities for registration of Claims including the receipt scrutiny and proper categorisation of such claims under paragraph 5 of the Scheme arising within the areas of their respective jurisdiction and they shall be assisted by such other officers as may be appointed by the Central Govt
under Section 6 of the Act for scrutiny and verification of the claims and other related matters
The Scheme also provides for the manner of filing claims
It enjoins that the Dy
Commissioner shall provide the required forms for filing the applications
It also provides for categorisation and registration of claims
Sub clause 2 of Clause 5 enjoins that the claims received for registration shall be placed under different heads
Sub clause 3 of clause 5 enjoins that on the consideration of claims made under paragraph 4 of the Scheme if the Dy
Commissioner is of the opinion that the claims fall in any category different from the category mentioned by the claimant he may decide the appropriate category after giving an opportunity to the claimant to be heard and also after taking into consideration any facts made available to him in this behalf
Sub clause 6 of Clause 5 enjoins that if the claimant is not satisfied with the order of the Dy
Commissioner he may prefer an appeal against such order to the Commissioner who shall decide the same
Clause 9 of the Scheme provides for processing of Claims Account Fund which the Central Govt
may after due appropriation made by Parliament credit to the said Fund
It provides that there shall also be a Claims and Relief Fund which will include the amounts 630 received in satisfaction of the claims and any other amounts made available to the Commissioner as donation or for relief purposes
Subclause 3 of clause 10 provides that the amount in the said Fund shall be applied by the Commissioner for disbursal of amounts in settlement of claims or as relief or apportionment of part of the Fund for disbursal of amounts in settlement of claims arising in future or for disbursal of amounts to the Govt
of Madhya Pradesh for the social and economic rehabilitation of the persons affected by the Bhopal gas leak disaster
Clause 11 of the Scheme deals with the disbursal apportionment of certain amounts and sub clause 2 thereof enjoins that the Central Govt may determine the total amount of compensation to be apportioned for each category of claims and the quantum of compensation payable in gener al in relation to each type of injury or loss
Sub clause 5 thereto provides that in case of a dispute as to disbur sal 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 record ed in writing think fit
The other clauses are not relevant for our present purposes
Counsel for different parties in all these matters have canvassed their submissions before us for the gas victims
Mr RK Garg Ms Indira Jaising and Mr Kailash Vasudev have made various submissions challenging the valid ity 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 unconstitu tional
The learned Attorney General assisted by Mr Gopal Subramanium has on the other hand urged that the Act is valid and constitutional and that the settlement arrived at on 14th15th February is proper and valid
In order to appreciate the background Ms Indira Jaising placed before us the proceedings of the Lok Sabha wherein Mr Veerendra Patil the Hon ble Minister stated on March 27 1985 that the tragedy that had occurred in Bhopal on 2nd and 3rd December 1984 was unique and unprecedented in character and magnitude not only for our country but for the entire world
It was stated that one of 631 the options available was to settle the case in Indian courts
The second one was to file the cases in American courts
Mr Patil reiterated that the Govt
wanted to pro ceed against the parent company and also to appoint a Com mission of Inquiry
Mr Garg in support of the proposition that the Act was unconstitutional submitted that the Act must be exam ined on the touchstone of the fundamental rights on the basis of the test laid down by this court in state of Madras vs VG Row   There at page 607 of the report this Court has reiterated that in considering the reasona bleness of the law imposing restrictions on the fundamental rights both the substantive and the procedural aspects of the impugned restrictive law should be examined from the point of view of reasonableness
And the test of reasonable ness wherever prescribed should be applied to each indi vidual Statute impugned and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases
The nature of the right alleged to have been infringed the underlying purpose of the restrictions im posed the extent and urgency of the evil sought to be remedied thereby the disproportion of the imposition the prevailing conditions at the time should all enter into the judicial verdict
The emphasis supplied
Chief Justice Patanjali Sastri reiterated that in evaluating such elusive factors and forming their own conception of what is reasona ble in the circumstances of a given case it is inevitable that the social philosophy and the scale of values of the judges participating in the decision would play an important role
Hence whether by sections 3 4  11 the rights of the victims and the citizens to fight for their own causes and to assert their own grievances have been taken away validly and properly must be judged in the light of the prevailing conditions at the time the nature of the right of the citizen the purpose of the restrictions on their rights to sue for enforcement in the courts of law or for punishment for offences against his person or property the urgency and extent of the evils sought to be remedied by the Act and the proportion of the impairment of the rights of the citizen with reference to the intended remedy pre scribed
According to Mr Garg the present position called for a comprehensive appreciation of the national and inter national 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 Constitu tion
He sought to urge that multinational corporations have assumed powers or potencies to override the political and economic independence of the sovereign nations which have 632 been used to take away in the last four decades much wealth out of the Third World
Now these are plundered much more than what was done to the erstwhile colonies by imperialist nations in the last three centuries of foreign rule
The role of courts in cases of conflict between rights of citi zens and the vast economic powers claimed by multinational corporations to deny moral and legal liabilities for their corporate criminal activities should not be lost sight of
He in this background urged that these considerations assume immense importance to shape human fights jurispru dence under the Constitution and for the Third World to regulate and control the power and economic interests of multinational corporations and the power of exploitation and domination by developed nations without submitting to due observance of the laws of the developing countries
It therefore appears that the production of or carrying on trade in dangerous chemicals by multinational industries on the soil of Third World countries call for strictest en forcement of constitutional guarantees for enjoying human fights in free India urged Mr Garg
In this connection our attention was drawn to the Charter of Universal Declara tion of Human Rights
Article 1 of the Universal Declaration of Human Rights 1948 reiterates that all human beings are born free and equal in dignity and rights
Article 3 states that everyone has right to life liberty and security of person
Article 6 of the Declaration states that everyone has the right to recognition everywhere as a person before the law
Article 7 states that all are equal before the law and are entitled without any discrimination to equal protec tion of the law
All are entitled to equal protection against any discrimination in violation of the Declaration of Human Rights and against any incitement to such discrimi nation
Article 8 states that everyone has the right to an effective remedy by competent National Tribunal for acts violating fundamental rights guaranteed to him by the Con stitution or by the law
It is therefore necessary to bear in mind that Indian citizens have a fight to live which cannot be taken away by the Union of India or the Govt
of a State except by a procedure which is just fair and reason able
The right to life includes the fight to protection of limb against mutilation and physical injuries and does not mean merely the fight to breathe but also includes the fight to livelihood
It was urged that this right is available in all its dimension till the last breath against all injuries to head heart and mind or the lungs affecting the citizen or his next generation or of genetic disorders
The enforce ment of the right to life or limb calls for adequate and appropriate reliefs enforceable in courts of law and of equity with sufficient power to offer adequate deterrence in all cases of corporate criminal liability under strict liability absolute liability punitive liability and crimi nal prosecution and 633 punishment to the delinquents
The damages awarded in civil jurisdiction must be commensurate to meet well defined demands of evolved human rights jurisprudence in modern world
It was therefore submitted that punishment in criminal jurisdiction for serious offences is independent of the claims enforced in civil jurisdiction and no immunity against it can be granted as part of settlement in any civil suit
If any Act authorises or permits doing of the same the same will be unwarranted by law and as such bad
The Constitution of India does not permit the same
Our attention was drawn to Article 21 of the Consti tution and the principles of international law
Right to equality is guaranteed to every person under article 14 in all matters like the laws of procedure for enforcement of any legal or constitutional right in every jurisdiction sub stantive law defining the rights expressly or by necessary implications denial of any of these rights to any class of citizens in either field must have nexus with constitution ally permissible object and can never be arbitrary
Arbi trariness is therefore anti thetical to the right of equality
In this connection reliance was placed on the observations of this Court in EP Royappa vs State of Tamil Nadu  Anr  and Maneka Gandhi vs Union of India 1978 2 SCR 621 where it was held that the view that Articles 19  21 constitute watertight compartments has been rightly overruled
Articles dealing with different fundamen tal rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at any point of time
They are all parts of an integrated scheme in the Constitution and must be preserved and cannot be destroyed arbitrarily
Reliance was placed on the observations in RD Shetty vs The IAA of India  Ors  Hence the rights of the citizens to fight for remedies and enforce their rights flowing from the breach of obligation in respect of crime cannot be obliterated
The Act and Sections 3 4  11 of the Act in so far as these purport to do so and have so operated are violative of Articles 14 191g and 21 of the Constitu tion
The procedure envisaged by the said Sections deprives the just and legitimate rights of the victims to assert and obtain their just dues
The rights cannot be so destroyed
It was contended that under the law the victims had right to ventilate their rights
It was further contended that Union of India was a joint tort feasor along with UCC and UCIL
It had negligent ly permitted the establishment of such a factory without proper safeguards exposing the victims and citizens to great danger
Such a person or authority 634 cannot be entrusted to represent the victims by denying the victims their rights to plead their own cases
It was sub mitted that the object of the Act was to fully protect people against the disaster of highly obnoxious gas and disaster of unprecedented nature
Such an object cannot be achieved without enforcement of the criminal liability by criminal prosecution
Entering into settlement without reference to the victims was therefore bad and unconstitu tional it was urged
If an Act it was submitted permits such a settlement or deprivation of the rights of the vic tims then the same is bad
Before we deal with the various other contentions raised in this case it is necessary to deal with the appli cation for intervention and submission made on behalf of the Coal India in Writ Petition No 26889 wherein Mr LN 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 obliga tions
With regard to alteration of rights procedure is governed by the Constitution directly
He sought to inter vene on behalf of Coal India and wanted these submissions to be taken into consideration
However when this contention was sought to be urged before this Court on 25th April 1989 after hearing all the parties it appeared that there was no dispute between the parties in the instant writ petitions between the victims and the Government of India that the rights claimed in these cases are referrable to Article 21 of the Constitution
Therefore no dispute really arises with regard to the contention of Coal India and we need not consider the submissions urged by Shri Sinha on behalf of the intervener in this case
It has been so re corded
By the order dated 3rd March 1989 Writ Petitions Nos 26889 and 16486 have been directed to be disposed of by this Bench  We have heard these two writ petitions along with the other writ petitions and other matters as indicated hereinbefore
The contentions are common
These writ peti tions question the validity of the Act and the settlement entered into pursuant to the Act
Writ Petition No 16486 is by one Shri Rakesh Shrouti who is an Indian citizen and claims to be a practising advocate having his residence at Bhopal
He says that he and his family members were at Bhopal on 2nd3rd December 1984 and suffered immensely as a result of the gas leak
He challenges the validity of the Act on various grounds
He contends that the Union of India should not have the exclusive right to represent the 635 victims in suits against the Union Carbide and thereby deprive the victims of their right to sue and deny access to justice
He further challenges the right of the Union of India to represent the victims against Union Carbide because of conflict of interests
The conduct of the Union of India was also deprecated and it was further stated that such conduct did not inspire confidence
In the premises the said petitioner sought a declaration under Article 32 of the Constitution that the Act is void inoperative and unen forceable as violative of Articles 14 19  21 of the Con stitution Similarly the second writ petition namely writ petition No 26889 which is filed by Sh
Charan Lal Sahu who is also a practising Advocate on behalf of the victims and claims to have suffered damages as a result of the gas leak
challenges the Act
He further challenges the settle ment entered into under the Act
He says that the said settlement was violative of principles of natural justice and the fundamental right of the said petitioner and other victims
It is his case that in so far as the Act permits such a course to be adopted such a course was not permissi ble under the Constitution
He further asserts that the Union of India was negligent and a joint tort feasor
In the premises according to him the Act is bad the settlement is bad and these should be set aside
In order to determine the question whether the Act in question is constitutionally valid or not in the light of Articles 14 19lg 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
There fore 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 proceed ings of the Rajya Sabha wherein the Hon ble Minister Shri Virendra Patil explained that the bill enabled the Govern ment 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 disas ter and to institute any suit or other proceedings or enter into any compromise as mentioned in the Act
The whole object of the Bill was to make procedural changes to the existing Indian law which would enable the Central Govern ment to take up the responsibility of fighting litigation on behalf of these victims
The first point was that it 636 sought to create a locus standi in the Central Government to file suits on behalf of the victims
The object of the Statute
it was highlighted was that because of the dimen sion of the tragedy covering thousands of people large number of whom being poor would not be able to go to the courts it was necessary to create the locus standi in the Central Government to start the litigation for payment of compensation in the courts on their behalf
The second aspect of the Bill was that by creating this locus standi in the Central Government the Central Government became compe tent to institute judicial proceedings for payment of com pensation on behalf of the victims
The next aspect of the Bill was to make a distinction between those on whose behalf suits had already been filed and those on whose behalf proceedings had not yet then been instituted
One of the Members emphasised that under Article 21 of the Constitu tion the personal liberty of every citizen was guaranteed and it has been widely interpreted as to what was the mean ing of the expression personal liberty 
It was cmphasised that one could not take away the right of a person the liberty of a person to institute proceedings for his own benefit and for his protection
It is from this point of view that it was necessary the member debated to preserve the right of a claimant to have his own lawyers to represent him along with the Central Government in the proceedings under Section 4 of the Act this made the Bill constitution ally valid
Before we deal with the question of constitutionali ty it has to be emphasised that the Act in question deals with the Bhopal gas leak disaster and it deals with the claims meaning thereby claims arising out of or connected with the disaster for compensation of damages for loss of life or any personal injury which has been or is likely to be caused and also claims arising out of or connected with the disaster for any damages to property or claims for expenses incurred or required to be incurred for containing the disaster or making or otherwise coping with the impact of the disaster and other incidental claims
The Act in question does not purport to deal with the criminal liabili ty if any of the parties or persons concerned nor it deals with any of the consequences flowing from those
This posi tion 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 Jais ing submitted are based on strict liability absolute liability and punitive liability
The Act does not either expressly or impliedly deal with the extent of the damages or 637 liability
Neither section 3 nor any other section deals with any consequences of criminal liability
The expression the Central Government shall and shall have the exclusive right to represent and act in place of whether within or outside India every person who has made or is entitled to make a claim for all purposes connected with such claim in the same manner and to the same effect as such person read as it is means that Central Government is substituted and vested with the exclusive right to act in place of the victims ie eliminating the victims their heirs and their legal representatives in respect of all such claims arising out of or connected with the Bhopal gas leak disas ter
The right therefore embraces right to institute proceedings within or outside India along with right to institute any suit or other proceedings or to enter into compromise
Sub section 1 of section 3 of the Act there fore substitutes the Central Government in place of the victims
The victims or their heirs and legal representa tives get their rights substituted in the Central Govern ment along with the concomitant right to institute such proceedings withdraw such proceedings or suit and also to enter into compromise
The victims or the heirs or the legal representatives of the victims are substituted and their rights are vested in the Central Government
This happens by operation of section 3 which is the legislation in question
Sub section 3 of section 3 makes it clear that the provi sions of sub section 1 of section 3 shall also apply in relation to claims in respect of which suits or other pro ceedings have been instituted in or before any court or other authority whether within or outside India before the commencement of this Act but makes a distinction in the case of any such suit or other proceeding with respect to any claim pending immediately before the commencement of this Act in or before any court or other authority outside India and provides that the Central Government shall repre sent and act in place of or along with such claimant if such court or other authority so permits
Therefore in cases where such suits or proceedings have been instituted before the commencement of the Act in any court or before any authority outside India the section by its own force will not come into force in substituting the Central Govern ment in place of the victims or the heirs or their legal representatives but the Central Government has been given the right to act in place of or along with such claimant provided such court or other authority so permits
It is to have adherence and conformity with the procedure of the countries or places outside India where suits or proceed ings are to be instituted or have been instituted
There fore 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 authori ties
Is such a right valid and proper 638 35
There is the concept known both in this country and abroad called parens patriae
Dr DK 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 posi tion is that according to Indian concept parens patriae doctrine recognized King as the protector of all citizens and as parent
In Budhakaran Chankhani vs 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 vs Banku Behary Hazra  Anr AIR 1943 Cal
203 at page 205 of the report
The position was further elaborated and explained by the Madras High Court in Medai Dalavoi T Kumaraswami Mudaliar vs Medai Dalavoi Rajammal AIR 1957 Mad
563 at page 567 of the report
This Court also recog nized the concept of parens patriae relying on the observa tions of Dr Mukherjea aforesaid in Ram Saroop vs SP Sahi 1959 2 Supp
SCR 583 at pages 598 and 599
In the Words and Phrases Permanent edition Vol
35 at p 99 it is stated that parens patriae is the inherent power and author ity of a Legislature to provide protection to the person and property of persons non suijuris such as minor insane and incompetent persons but the words parens patriae meaning thereby the father of the country  were applied originally to the King and are used to designate the State referring to its sovereign power of guardianship over persons under disability Emphasis supplied
Parens patriae jurisdic tion it has been explained is the right of the sovereign and imposes a duty on sovereign in public interest to protect persons under disability who have no rightful pro tector
The connotation of the term parens patriae differs from country to country for instance in England it is the King in America it is the people etc
The Government is within its duty to protect and to control persons under disability
Conceptually the parens patriae theory is the obligation of the State to protect and take into custody the rights and the privileges of its citizens for discharging its obligations
Our Constitution makes it imperative for the State to secure to all its citizens the rights guaran teed by the Constitution and where the citizens are not in a position to assert and secure their rights the State must come into picture and protect and fight for the rights of the citizens
The Preamble to the Constitution read with the Directive Principles Articles 38 39 and 39A enjoins the State to take up these responsibilities
It is the protective measure to which the social welfare state is committed
It is necessary for the State to ensure the funda 639 mental rights in conjunction with the Directive Princi ples of State Policy to effectively discharge its obliga tion and for this purpose if necessary to deprive some rights and privileges of the individual victims or their heirs to protect their rights better and secure these further
Reference may be made to Alfred L Snapp  Son Inc vs Puerto Rico    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 dis missed the action on the ground that the Commonwealth lacked standing to sue but the Court of Appeal for the Fourth Circuit reversed it
On certiorari the United States Supreme Court affirmed
In the opinion by White J joined by Burger Chief Justice and Brennan Marshall Blackman Rennquist Stevens and O Connor JJ it was held that Puerto Rico had a claim to represent its quasi sovereign interests in federal court at least which was as strong as that of any State and that it had parens patriae standing to sue to secure its residents from the harmful effects of discrimination and to obtain full and equal participation in the federal employment service scheme established pursu ant to the Wagner Peyser Act and the Immigration and Nation ality Act of 1952
Justice White referred to the meaning of the expression parens patriae
According to Black s Law Dictionary 5th Edition 1979 page 1003 it means literally parent of the country  and refers traditionally to the role of the State as a sovereign and guardian of persons under legal disability
Justice White at page 1003 of the report emphasised that the parens patriae action had its roots in the common law concept of the royal prerogative
The royal prerogative included the right or responsibility to take care of persons who were legally unable on account of mental incapacity whether it proceeds from nonage idiocy or lunacy to take proper care of themselves and their property
This prerogative of parens patriae is inherent in the supreme power of every state whether that power is lodged in a royal person or m the legislature and is a most beneficent function
After discussing several cases Justice White observed at page 1007 of the report that in order to maintain an action in parens patriae the state must artic ulate an interest apart from the interests of 640 particular parties ie the State must be more than a nominal party
The State must express a quasi sovereign interest
Again an instructive insight can be obtained from the observations of Justice Holmes of the American Supreme Court in the case of Georgia vs Tennessee Copper Co     which was a case involving air pollution in Georgia caused by the discharge of noxious gases from the defendant s plant in Tennessee
Justice Holmes at page 1044 of the report described the State s interest as follows This is a suit by a State for an injury to it in its capacity of quasi sovereign
In that capacity the State has an interest independent of and behind the titles of its citizens in all the earth and air within its domain
It has the last word as to whether its mountains shall be stripped of their forests and its inhabitants shall breathe pure air
It might have to pay individuals before it could utter that word but with it remains the final power   
When the States by their union made the forcible abatement of outside nuisances impossible to each they did not thereby agree to submit to whatever might be done
They did not renounce the possibility of making reasonable demands on the ground of their still remaining quasi sovereign inter ests 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 Direc tive Principles it was possible to authorise the Central Government to take over the claims of the victims to tight against the multinational Corporation in respect of the claims
Because of the situation the victims were under disability in pursuing their claims in the circumstances of the situation fully and properly
On its plain terms the State has taken over the exclusive right to represent and act in place of every person who has made or is entitled to make a claim for all purposes connected with such claim in the same manner and to the same effect as such person
Whether such provision is valid or not in the background of the requirement of the Constitution and the Code of Civil Procedure is another debate
But there is no prohibition or inhibition in our opinion conceptually or jurisprudential ly for Indian State taking over the claims of the victims or for the State acting for the victims as the Act has sought to provide
The actual meaning of what the Act has provided and the validity thereof however will have to be examined in the light of the specific submissions advanced in this case
641 37
Ms Indira Jaising as mentioned hereinbefore on behalf of some other victims drew out attention to the background of the passing of the Act in question
She drew our attention to the fact that the Act was to meet a specif ic situation that had arisen after the tragic disaster and the advent of American lawyers seeking to represent the victims in American courts
The Government s view according to her as was manifest from the Statement of Objects and Reasons debates of the Parliament etc
was that the inter ests of the victims would be best served if the Central Government was given the right to represent the victims in the courts of United States as they would otherwise be exploited by ambulance chasers  working on contingency fees
The Government also proceeded initially on the hypoth esis that US was the most convenient forum in which to sue UCC
The Government however feared that it might not have locus standi to represent the victims in the courts of the United States of America unless a law was passed to enable it to sue on behalf of the victims
The dominant object of the Act therefore according to her was to give to the Government of India locus Standi to sue on behalf of the victims in foreign jurisdiction a standing which it other wise would not have had
According to her the Act was never intended to give exclusive rights to the Central Government to sue on behalf of the victims in India or abroad
She drew our attention to the parliamentary debates as mentioned hereinbefore
She drew our attention to the expression parens patriae  as appearing in the Words and Phrases Volume 31 p 99
She contends that the Act was passed to provide locus standi only to represent in America
She drew our attention to the American Constitutional Law by Lau rence B Trioe 1978 Edition at paragraph 324 where it was stated that in its capacity as proprietor a state may satisfy the requirement of injury to its own interests by an assertion of harm to the state as such
It was further stated by the learned author there that the State may sue under the federal anti trust laws to redress wrongs suffered by it as the owner of a railroad and as the owner and opera tor 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 indi vidual 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 patr iae  on behalf of the citizens where a state s capacity as parens patriae is not negated by the federal structure the protection of the general health comfort and welfare of the state s inhabitants has been held to give the state itself a sufficient 642 interest
Ms Jaising sought to contend that to the extent that the Act was not confined to empowering the Government to sue on behalf of those who were not sui generis but extended also to representing those who are this exercise of the power cannot be referrable to the doctrine of parens patriae 
To the extent it is not confined in enabling the Government to represent its citizens in foreign jurisdiction but empowered it to sue in local courts to the exclusion of the victims it cannot be said to be in exercise of doctrine of parens patriae  according to her
We are unable to agree
As we have indicated before conceptually and juris prudentially there is no warrant in the background of the present Act in the light of circumstances of the Act in question to confine the concept into such narrow field
The concept can be varied to enable the Government to represent the victims effectively in domestic forum ifthe situation so warrants
We also do not find any reason to confine the parens patriae  doctrine to only quasisovereign right of the State independent of and behind the title of the citi zens as we shall indicate later
It was further contended that deprivation of the rights of the victims and denial of the rights of the vic tims or the fights of the heirs of the victims to access to justice was unwarranted and unconstitutional
She submitted that it has been asserted by the Government that the Act was passed pursuant to Entry 13 of the List I of the Seventh Schedule to the Constitution
It was therefore submitted that to the extent it was a law relating to civil procedure it sets up a different procedure for the Bhopal gas victims and denies to them equality before law violating Article 14 of the Constitution
Even assuming that due to the magnitude of the disaster the number of claimants and their disabili ty they constituted a separate class and that it was permis sible to enact a special legislation setting up a special procedure for them the reasonableness of the procedure has still to be tested
Its reasonableness according to her will have to be judged on the touchstone of the existing Civil Procedure Code of 1908 and when so tested it is found wanting in several respects
It was also contended by the Government that it was a legislation relating to actionable wrongs under Entry 8 of the Concurrent List of the Seventh Schedule
But so read she said it could only deal with the procedural aspects and not the substantive aspect of ac tionable wrongs
If it does then the reasonableness of a law must be judged with reference to the existing substan tive law of actionable wrongs and so judged it is in viola tion of many constitutional rights as it takes away from the victims the right to sue for actionable wrongs according to counsel for the victims
According to her it fails to take into account the law of strict liability for ultra 643 hazardous activity as clarified by this Court in MC Meh ta 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
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 Constitu tion of India
It was on the other side submitted that it is not permissible for the State to grant legal aid on pain of destroying rights that inhere in citizens or on pain of demanding that the citizens surrender their rights to the State
The Act in fact demands a surrender of rights of the citizens to the State
On the interpretation of the Act Ms Indira Jaising submitted that sections 3 and 4 as noted above give exclusive power to the Government to represent the victims and there is deprivation of the victims  right to sue for the wrongs done to them which is uncanalised and unguided and the expression due regard in section 4 of the Act does not imply consent and as such violative of the rights of the victims
The right to be associated with the conduct of the suit is hedged in with so many conditions that it is illusory
According to her a combined reading of sections 3 and 4 of the act lead to the conclusion that the victims are displaced by the Central Government which has constituted itself as the surrogate of the claimants that they have no control over the proceedings that they have no right to decide whether or not to compromise and if so on what terms and they have no right to be heard by the court before any such compromise is effected
Therefore section 3 read with section 4 according to her hands over to the Government all effective rights of the victims to sue and is a naked usurption of power
It was submitted that in any event on a plain reading of the Act section 3 read with section 4 did not grant the Government immunity from being sued as a joint tort feasor
It was further urged that section 9 makes the Gov ernment the total arbitor in the matter of the registration processing and recording of claims
Reference was made to section 92a b and c and disbursal of claims under sections 92f and 10
It was urged that the Deputy Com missioner and Commissioner appointed under the Act and the Scheme are subordinates and agents of the Central Govern ment
They replace impartial and independent civil court by officers and subordinates of the Central Government
Clause 11 of the Scheme makes the Central Government according to counsel judge in its own cause inasmuch as the Central Government could be and was in fact a joint tort feasor
It was submitted that sections 5 to 9 of the Act read with the Scheme do not set up a machinery which is 644 constitutionally valid
The Act it was urged deprives the victims of their rights out of all proportion to the object sought to be achieved namely to sue in foreign jurisdic tion or to represent those incapable of representing them selves
The said object could be achieved according to counsel by limiting the right to sue in foreign jurisdic tion 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 sec tion 3 according to counsel for the victims is to deprive the victims of the right to sue for and on their own behalf through counsel of their choice and instead empower the Central Government to sue for them
The Act is it was contended unconstitutional because it deprives the victims of their right to life and personal liberty guaranteed by Article 21
The right to life and liberty includes the right to sue for violations of the right it was urged
The right to life guaranteed by Article 21 must be interpreted to mean all that makes life livable life in all its fullness
According to counsel it includes the right to livelihood
Reference was made to the decision of Olga Tellis vs BMC 1985 Supp
2 SCR 51 at p 78 83
This right it was contended is inseparable from the reme dy
It was urged that personal liberty includes a wide range of freedoms to decide how to order one s affairs
Reference was made to Maneka Gandhi vs Union of India supra The right to life and liberty also includes the right to healthy environment free from hazardous pollutants
The right to life and liberty it was submitted is inseparable from the remedy to judicial vindication of the violation of that right the right of access to justice must be deemed to be part of that right
Therefore the importance is given to the right to file a suit for an actionable wrong
See Ganga Bai vs Vijay Kumar  at 886
According to counsel appearing for the victims the Act read strictly infringes the right to life and personal liberty because the right to sue by the affected person 645 for damages flowing from infringement of their rights is taken away
Thus it was submitted that not just some inci dents of the right to life but the right itself in all its fullness is taken away
Such depravation according to counsel of the right is not in accordance with procedure established by law inasmuch as the law which takes away the right ie impugned Act is neither substantively nor procedurally just fair or reasonable
A law which divests the victims of the right to sue to vindicate for life and personal liberty and vests the said right in the Central Government is not just fair or reasonable
The victims are sui generis and able to decide for themselves how to vindi cate their claims in accordance with law
There is there fore no reason shown to exist for divesting them of that right and vesting that on the Central Government
All the counsel for the victims have emphasised that vesting of the right in Central Government is bad and unrea sonable because there is conflict of interests between the Central Government and the victims
It was emphasised that the conflict of interest has already prejudiced the victims in the conduct of the case inasmuch as a compromise unac ceptable to the victims has been entered into in accordance with the order of this Court of 14th15th 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 deter mine 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 section case supra and SL Kapoor vs Jagmohan  at 753 766
The right to natural justice is included in Article 14 Tulsi Ram vs Union of India 1985 Supp
2 SCR 131
Reference was also made to Maneka Gandhi s case supra
It was contended by counsel that the right to natural justice is the right to be heard by Court at the pre decisional stage ie before any compromise is effected and accepted
Reference was made to the decision of this Court in Swadeshi Cotton vs Union of India  It was submitted that natural justice is a highly effective tool devised by the Courts to ensure that a statu tory authority arrives at a just decision
It is calculated to act as a healthy check on the abuse of power
Natural justice is not dispensable nor is it an empty formality
Denial of that right can and has led to the miscar 646 riage of justice in this case
According to counsel if the victims had been given an opportunity to be heard they would inter alia have pointed out that the amount agreed to be paid by UCC was hopelessly inadequate and that UCC its officer and agents ought not to be absolved of criminal liability that the Central Government itself was liable to have been sued as a joint tort feasor and according to counsel had agreed to submit to a decree if found liable under the order dated 31st December 1985 that suits had been filed against the State of Madhya Pradesh Shri Arjun Singh and UCIL which said suits cannot be deemed to have been settled by the compromiseorder of 14th15th February 1989
It was also pointed out that Union of India was under a duty to sue UCIL which it had failed and neglected to do
It was submitted that to the extent that the statute does not provide for a pre decisional hearing on the fairness of the proposed settlement or compromise by Court it is void as offending natural justice hence violative of Articles 14 and 21 of the Constitution
Alternatively it was contended by the counsel that since the statute neither expressly nor by necessary implication bars the right to be heard by Court before any compromise is effected such a right to a pre decisional hearing by Court must be read into section 32b of the Act
Admittedly it does not expressly ex clude the right to a hearing by Court prior to any settle ment being entered into
Far from excluding such a right by necessary implication having regard to the nature of the rights affected ie the right to life and personal liber ty such a right to hearing must be read into the Act in order to ensure that justice is done to the victims accord ing to all the counsel
The Act sets up a procedure differ ent 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 connec tion 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 neces sary 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 32b 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 32b unconstitutional
The said provisions are intended to ensure the machinery of 647 accountability to the victims and to provide to them an opportunity to be heard by court before any compromise is arrived at
In this connection reference was made to Rule 233 of the Federal Rules of Civil Procedure in America which provides for a hearing to the victims before a compro mise is effected
The victims as plaintiffs in an Indian court cannot be subjected to a procedure which is less fair than that provided by a US forum initially chosen by the Government of India it was urged
Counsel submitted that Section 6 of the Act is unreasonable because it replaces an independent and impar tial Civil Court of competent jurisdiction by an Officer known as the Commissioner to be appointed by the Central Government
No qualification according to counsel had been prescribed for the appointment of a Commissioner and clause 5 of the Scheme framed under the Act vests in the Commis sioner the judicial function of deciding appeals against the order of the Deputy Commissioner registering or refusing to register a claim
It was further submitted that clause 112 of the Scheme is unreasonable because it replaces an inde pendent and impartial civil court of competent jurisdiction with the Central Government which is a joint tort feasor for the purpose of determining the total amount of compensa tion to be apportioned for each category of claims and the quantum of compensation payable for each type of injury or loss
It was submitted that the said function is a judicial function and if there is any conflict of interest between the victims and Central Government vesting such a power in the Central Government amounts to making it a judge in its own cause
It was urged that having regard to the fact that amount received in satisfaction of the claims is ostensibly pre determined namely 470 million dollars unless the order of 14th15th February is set aside which ought to be done according to counsel the Central Government would have a vested interest in ensuring that the amount of damages to be disbursed does not exceed the said amount
Even otherwise according to counsel the Government of India has been sued as a joint tort feasor and as they would have a vested interest in depressing the quantum of damages payable to the victims
This would according to counsel result in a deliberate under estimation of the extent of injuries and compensation payable
Clause 114 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 2b cannot be interpreted to mean 648 claims against the Central Government the State of Madhya Pradesh UCIL which was not sued in suit No 111386 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 111386 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 102b of the Scheme
Counsel submitted that the balance of  470 million after deducting interim relief as determined by this Court should be attached
In any event it was submitted that it be declared that the word claim in section 2 does not include claims against Central Govt
or State of Madhya Pradesh or UCIL
Hence it was urged that the rights of the victims to sue the Government of India the State of Madhya Pradesh or UCIL would remain unaffected by the Act or by the compromise effected under the Act
Machinery to decide suit expeditiously has to be devised it was submitted
Other suits filed against UCC UCIL State of Madhya Pradesh and Arjun Singh should to be transferred to the Supreme Court for trial and disposal according to counsel
It was submit ted that the Court should fix the basis of damages payable to different categories namely death and disablement mentioned under clause 52 of the scheme
Counsel submitted that this Court should set up a procedure which would ensure that an impartial judge assisted by medical experts and assessors would adjudicate the basis on which an individual claimant would fall into a particular category
It was also urged that this Court should quantify the amount of compen sation payable to each category of claimant in clause 52 of the Scheme
This decision cannot it was submitted be left to the Central Government as is purported to be done by clause 112 of the Scheme
This Court must set up it was urged a trust with independent trustees to administer the trust and trustees to be accountable to this Court
An independent census should be carried out of number of claimants nature and extent of injury caused to them the category into which they fall
Apportionment of amounts should be set aside or invested for future claimants that is the category in clause 52a of the Scheme which is according to counsel of utmost impor tance 649 since the injuries are said to be
carcinogenic and ontogen ic and wide affecting persons yet unborn
Shri Garg further and on behalf of some of the victims counsel urged before us that deprivation of the rights of the victims and vesting of those fights in the State is violative of the rights of the victims and cannot
be justified or warranted by the Constitution
Neither section 3 nor section 4 of the Act gives any right to the victims on the other hand it is a complete denial of access to justice for the victims according to him
This according to counsel is arbitrary
He also submitted that section 4 of the Act as it stands gives no right to the victims and as such even assuming that in order to fight for the rights of the victims it was necessary to substitute the victims even then in so far as the victims have been denied the right of say in the conduct of the proceedings this is disproportionate to the benefit conferred upon the victims
Denial of rights to the victims is so great and deprivation of the right to natural justice and access to justice is so tremendous that judged by the well settled principles by which yardsticks provisions like these should be judged in the constitutional framework of this country the Act is violative of the fundamental rights of the vic tims
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
All the counsel submitted that in any event the criminal liability cannot be subject matter of this Act
Therefore the Government was not entitled to agree to any settlement on the ground that criminal prosecution would be withdrawn and this being a part of the consideration or inducement for settling the civil liability he submitted that the settlement arrived at on the 14thl5th February 1989 as recorded in the order of this Court is wholly unwar ranted unconstitutional and illegal
Mr Garg additionally further urged that by the procedure of the Act each individual claim had to be first determined and the Government could only take over the aggregate of all individual claims and that could only be done by aggregating the individual claims of the victims
That was not done according to him
Read in that fashion according to Shri Garg the conduct of the Government in implementing the Act is wholly improper and unwarranted
It was submitted by him that the enforcement of the fight of the victims 650 without a just fair and reasonable procedure which is vitally necessary for representing the citizens or victims was bad
It was further urged by him that the Bhopal gas victims have been singled out for hostile discrimination resulting in total denial of all procedures of approach to competent courts and tribunals
It was submitted that the Central Government was incompetent to represent the victims in the litigations or for enforcement of the claims
It was then submitted by him that the claims of the victims must be enforced fully against the Union Carbide Corporation carry ing on commercial activities for profit resulting in unprec edented gas leak disaster responsible for a large number of deaths and severe injuries to others
It was submitted that the liability of each party responsible including the Government of India which is a joint tort feasor along with the Union Carbide has to be ascertained in appropriate proceedings
It was submitted on behalf of the victims that Union of India owned 22 of the shares in Union Carbide and therefore it was incompetent to represent the victims
There was conflict of interest between the Union of India and the Union Carbide and so Central Government was incompe tent
It is submitted that pecuniary interest howsoever small disqualifies a person to be a judge in his own cause
The settlement accepted by the Union of India according to various counsel is vitiated by the pecuniary bias as holders of its shares to the extent of 22
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 19lg and 21 of the Constitution
The principles of the decision of this Court in MC Mehta  Anr
vs Union of India  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 Coun tries of the multinational companies cannot be less but must be more because the persons affected are often without remedy for 651 reasons of inadequate facilities for protection of health or property
Therefore the damages sustainable by Indian victims against the multinationals dealing with dangerous gases without proper security and other measures are far greater than damages suffered by the citizens of other advanced and developed countries
It is therefore neces sary to ensure by damages and deterrent remedies that these multinationals are not tempted to shift dangerous manufac turing operations intended to advance their strategic objec tives of profit and war to the Third World Countries with little respect for the right to life and dignity of the people of sovereign third world countries
The strictest enforcement of punitive liability also serves the interest of the American people
The Act therefore according to Shri Garg is clearly unconstitutional and therefore void
It was urged that the settlement is without juris diction
This Court was incompetent to grant immunity against criminal liabilities in the manner it has purported to do by its order dated 14thl5th February 1989 it was strenuously suggested by counsel
It was further submitted that to hold the Act to be valid the victims must be heard before the settlement and the Act can only be valid if it is so interpreted
This is necessary further according to Shri Garg to lay down the scope of heating
Shri Garg also drew our attention to the scheme of disbursement of relief to the victims
He submitted that the scheme of disbursement is unreasonable and discriminatory because there is no proce dure which is just fair and reasonable in accordance with the provisions of Civil Procedure Code
He further submitted that the Act does not lay down any guidelines for the con duct of the Union of India in advancing the claims of the victims
There were no essential legislative guidelines for determining the rights of the victims the conduct of the proceedings on behalf of the victims and for the relief claimed
Denial of access to justice to the victims through an impartial judiciary is so great a denial that it can only be consistent with the situation which calls for such a drastic provision
The present circumstances were not such
He drew our attention to the decision of this Court in Basheshar vs Income Tax Commissioner   in Re Special Courts Bill  AR Antulay vs RS Nayak  Anr   Ram Krishna Dalmia vs Ten dulkar  Ambika Prasad Mishra etc
vs State of UP  Ors etc and Bodhan Chowdhary vs State of Bihar  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 vs Union of India   Ms Mackinnon Machkenzie  Co Ltd vs Audrey D Costa 652 and Anr 1987 2 SCC 469 Sheela Barse vs Secretary Children Aid Society  Ors
  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 corpora tions 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 disas ter resulting in extensive damage to life and property and the destruction of the environment affecting large number of people and for the full protection of the interest of the victims and for complete satisfaction of all claims for compensation the Act was passed empowering the Government of India to take necessary steps for processing of the claims and for utilisation of disbursal of the amount re ceived in satisfaction of the claims
The Central Government was given the exclusive right to represent the victims and to act in place of in United States or in india every citizen entitled to make a claim
Shri Garg urged that on a proper reading of section 31 of the Act read with section 4 exclusion of all victims for all purpose is incomplete and the Act is bad
He submitted that the decree for adjudica tion of the Court must ascertain the magnitude of the dam ages and should be able to grant reliefs required by law under heads of strict liability absolute liability and punitive liability
Shri Garg submitted that it is necessary to consider that the Union of India is liable for the torts
In several decisions to which Shri Garg grew our attention it has been clarified that Government is not liable only if the tortious act complained has been committed by its servants in exer cise of its sovereign powers bY which it is meant powers that can be lawfully exercised under sovereign rights only vide Nandram Heeralal vs Union of India  Anr AIR 1978 MP 209 at p 212
There is a real and marked distinction between the sovereign functions of the government and those which are non sovereign and some of the functions that fall in the latter category are those connected with trade commerce business and industrial undertakings
Sovereign functions are such acts which are of such a nature as cannot be performed by a private individual or association unless powers are delegated by sovereign authority of state
According to Shri Garg the Union and the State Governments under the Constitution and as per laws of the Factories Environment Control etc are bound to exercise control on the factories in public interest and public purpose
These functions are not sovereign func 653 tions according to Shri Garg and the Government in this case was guilty of negligence
In support of this Shri Garg submitted that the offence of negligence on the part of the Govt
would be evident from the fact that a the Government allowed the Union Carbide factory to be installed in the heart of the city b the Government allowed habitation in the front of the factory knowing that the most dangerous and lethal gases were being used in the manufacturing processes c the gas leakage from this factory was a common affair and it was agitated continuously by the people journalists and it was agitated in the Vidhan Sabha right from 1980 to 1984
These features firmly proved according to Shri Garg the grossest negligence of the governments
Shri Garg submitted that the gas victims had legal and moral right to sue the governments and so it had full right to im plead all the necessary and proper parties like Union Carbide UCIL and also the then Chief Minister Shri Arjun Singh of the State
He drew our attention to Order 2 rule 3 of the Civil Procedure Code
In suits on joint torts according to Shri Garg each of the joint tort feasors is responsible for the injury sustained for the common acts and they can all be sued together
Shri Garg s main criticism has been that the most crucial question of corporate responsibility of the people s right to life and their right to guard it as enshrined in Article 21 of the Constitution were sought to be gagged by the Act
Shri Garg tried to submit that this was an enabling Act only but not an Act which deprived the victims of their right to sue
He submitted that in this Act there is denial of natural justice both in the institution under section 3 and in the conduct of the suit under section 4
It must be seen that justice is done to all R Viswanathan vs Rukh ul Mulk Syed Abdul Wajid  It was urged that it was necessary to give a reasona ble notice to the parties
He referred to M Narayanan Nambiar vs State of Kerala 1963 Supp
2 SCR 724
Shri Shanti Bhushan appearing for Bhopal Gas Peedit Mahila Udyog Sangathan submitted that if the Act is to be upheld it has to be read down and construed in the manner urged by him
It was submitted that when the Bhopal Gas disaster took place which was the worst industrial disaster in the world which resulted in the deaths 654 of several thousands of people and caused serious injuries to lakhs others there arose a right to the victims to get not merely damages under the law of the torts but also arose clearly by virtue of right to life guaranteed as fundamen tal right by Article 21 of the Constitution a right to get full protection of life and limb
This fundamental right also according to Shri Shanti Bhushan embodied within itself a right to have the claim adjudicated by the estab lished courts of law
It is well settled that right of access to courts in respect of violation of their fundamen tal rights itself is a fundamental right which cannot be denied to the people
Shri Shanti Bhushan submitted that there may be some justification for the Act being passed
He said that the claim against the Union Carbide are covered by the Act
The claims of the victims against the Central Government or any other party who is also liable under tort to the victims is not covered by the Act
The second point that Shri Shanti Bhushan made was that the Act so far as it empowered the Central Government to represent and act in place of the victims is in respect of the civil liability arising out of disaster and not in respect of any right in respect of criminal liability
The Central Govt according to Shri Shanti Bhushan cannot have any right or authority in relation to any offences which arose out of the disaster and which resulted in criminal liability
It was submitted that there cannot be any settlement or compromise in rela tion 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 provi sion of the Constitution or under any provision of the Criminal Procedure Code or under any other provision of law and therefore if the settlement in question was to be treated not as a compromise but as an order of the Court it would be without jurisdiction and liable to be declared so on the principles laid down according to Shri Bhushan by this Court in Antulay s case supra
Shri Shanti Bhushan submitted that even if under the Act the Central Government is considered to be able to represent the victims and to pursue the litigation on their behalf and even to enter into compromise on their behalf it would be a gross violation of the constitutional rights of the victims to enter into a settlement with the Union Carbide without giving the victims opportunities to express their views about the fairness or adequacy of the settlement before any court could permit such a settlement to be made
Mr Shanti Bhushan submitted that the suit which may be 655 brought by the Central Government against Union Carbide under section 3 of the Act would be a suit of the kind contemplated by the Explanation to Order 23 rule 3 of the Code of Civil Procedure since the victims are not parties and yet the decree obtained in the suit would bind them
It was therefore urged by Shri Shanti Bhushan that the provi sions of Section 31 of the Act merely empowers the Central Government to enter into a compromise but did not lay down the procedure which was to be followed for entering into any compromise
Therefore there is nothing which is inconsist ent with the provisions of Order 23 Rule 3 B of the CPC to which the provisions Section 11 of the Act be applied
If however by any stretch of argument the provisions of the Act could be construed so as to override the provisions of Order 23 Rule 3 B CPC it was urged the same would render the provisions of the Act violative of the victims  funda mental rights and the actions would be rendered unconstitu tional
If it empowered the Central Government to compromise the victims  rights without even having to apply the prin ciples of natural justice then it would be unconstitutional and as such bad
Mr Shanti Bhushan Ms Jaising and Mr Garg submitted that these procedures must be construed in accordance with the provisions contained in Order 23 Rule 3 B CPC and an opportunity must be given to those whose claims are being compromised to show to the court that the compromise is not fair and should not accordingly be permit ted by the court
Such a hearing in terms according to counsel of Order 23 Rule 3 B CPC has to be before the compromise is entered into
It was then submitted that section 3 of the Act only empowers the Central Government to represent and act in place of the victims and to institute suits on behalf of the victims or even to enter into compro mise on behalf of the victims
The Act does not create new causes of action create special courts
The jurisdiction of the civil court to entertain suit would still arise out of section 9 of the CPC and the substantive cause of action and the nature of the reliefs available would also continue to remain unchanged
The only difference produced by the provisions of the Act would be that instead of the suit being filed by the victims themselves the suit would be filed by the Central Government on their behalf
Shri Shanti Bhushan then argued that the cause of action of each victim is separate and entitled him to bring a suit for separate amount according to the damages suffered by him
He submitted that even where the Central Government was empowered to file suits on behalf of all the victims it could only ask for a decree of the same kind as could have been asked for by the victims themselves namely a 656 decree awarding various specified amounts to different victims whose names had to be disclosed
According to Shri Shanti Bhushan even if all the details were not available at the time when the suit was filed the details of the victims  damages had to be procured and specified in the plaint before a proper decree could be passed in the suit
even if the subject matter of the suit had to be compromised between the Central Government and the Union Carbide the compromise had to indicate as to what amount would be pay able to each victim in addition to the total amount which was payable by Union Carbide submitted Shri Shanti Bhushan
It was submitted that there was nothing in the Act which permitted the Central Government to enter into any general compromise with Union Carbide providing for the lumpsum amount without disclosure as to how much amount is payable to each victim
If the Act in question had not been enacted the victims would have been entitled to not only sue Union Carbide themselves but also to enter into any compromise or settlement of their claims with the Union Carbide immediate ly
The provisions of the Act according to Mr Shanti Bhushan deprive the victims of their legal right and such deprivation of their rights and creation of a corresponding right in the Central Government can be treated as reasonable only if the deprivation of their rights imposed a corre sponding liability on the Central Government to continue to pay such interim relief to the victims as they might be entitled to till the time that the Central Government is able to obtain the whole amount of compensation from the Union Carbide
He submitted that the deprivation of the right of the victims to sue for their claims and denial of access to justice and to assert their claims and the substi tution of the Central Government to carry on the litigation for or on their behalf can only be justified if and only if the Central Government is enjoined to provide for such interim relief or continue to provide in the words of Judge Keenan as a matter of fundamental human decency such interim relief necessary to enable the victims to fight the battle
Counsel submitted that the Act must be so read
Shri Shanti Bhushan urged that if the Act is construed in such a manner that it did not create such an obligation on the Central Government the Act cannot be upheld as a reasonable provision when it deprived the victims of their normal legal rights of immediately obtaining compensation from Union Carbide
He referred to section 10b of the Act and clause 10 and 111 of the Scheme to show that the legislative policy underlying the Bhopal Act clearly contemplated pay ment of interim relief to the victims from time to time till such time as the Central Government was able to recover from Union Carbide 657 full amount of compensation from which the interim reliefs paid by the Central Government were to be deducted from the amount payable to them by way of final disbursal of the amounts recovered
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 submit ted 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
Shri Kailash Vasdev appearing for the petitioners in Writ Petition No 155 186 submitted that the Act dis placed 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 re placing the Central Government in place of the victims
by conferment of exclusive right to sue in place of victims according to him contravened the procedure established by law
The right to sue for the wrong done to an individual was exclusive to the individual
It was submitted that under the civil law of the country individuals have rights to enforce their claims and any deprivation would place them into a different category from the other litigants
The right to enter into compromise it was further submitted without consultation of the victims if that is the con struction of section 3 read with section 4 of the Act then it is violative of procedure established by law
The proce dure substituted if that be the construction of the Act would be in violation of the principles of natural justice and as such bad
It was submitted that the concept of parens patriae  would not be applicable in these cases
It was submitted that traditionally sovereigns can sue under the doctrine of parens patriae  only for violations of their quasi sovereign interests
Such interests do not include the claims of individual citizens
It was submitted that the Act in question is different from the concept of parens patriae because there was no special need to be satisfied and a class action according to Shri Vasdev would have served the same purpose as a suit brought under the statute and ought to have been preferred because it safeguarded claimants  right to procedural due process
In addition a suit brought under the statute would threaten the victims  substantive due process rights
It was further submitted that in order to sustain an action it was neces sary for the Government of India to have standing 658 62
Counsel submitted that parens patriae  has received no judicial recognition in this country as a basis for recovery of money damages for injuries suffered by individu als
He may be right to that extent but the doctrine of parens patriae has been used in India in varying contexts and contingencies
We are of the opinion that the Act in question was passed in recognition of the right of the sovereign to act as parens patriae as contended by the learned Attorney General
The Government of India in order to effectively safeguard the rights of the victims in the matter of the conduct of the case was entitled to act as parens patriae which position was reinforced by the statutory provisions namely the Act
We have noted the several decisions re ferred to hereinbefore namely Bhudhkaran Chankhani vs Thakur Prasad Shad supra Banku Behary Mondal vs Banku Behari Hazra supra Medai Dalavoi T Kumaraswami Mudaliar vs Medai Dalavai Rajammal supra and to the decision of this Court in Mahant Ram Saroop Dasji vs SP Sahi supra and the decision of the American Supreme Court in Alfred Schnapp vs Puerto Rico supra
It has to be borne in mind that conceptually and jurisprudentially the doctrine of parens patriae is not limited to representation of some of the victims outside the territories of the country
It is true that the doctrine has been so utilised in America so far
In our opinion learned Attorney General was right in contending that where citizens of a country are victims of a tragedy because of the negligence of any multinational a peculiar situation arises which calls for suitable effective machinery to articulate and effectuate the grievances and demands of the victims for which the conventional adversary system would be totally inadequate
The State in discharge of its sovereign obligation must come forward
The Indian state because of its constitutional commitment is obliged to take upon itself the claims of the victims and to protect them in their hour of need
Learned Attorney General was also right in submitting that the decisions of the Calcutta Madras and US Supreme Court clearly indicate that parens patriae doctrine can be invoked by sovereign state within India even if it be contended that it has not so far been invoked inside India in respect of claims for damages of victims suffered at the hands of the multinational
In our opinion conceptually and jurisprudentially there is no bar on the State to assume responsibilities analogous to parens patriae to discharge the State s obligations under the Constitution
What the Central Government has done in the instant case seems to us to be an expression of its sover eign power
This power is plenary and inherent in every sovereign state to do all things which promote the health peace 659 morals education and good order of the people and tend to increase the wealth and prosperity of the state
Sovereignty is difficult to define
See in this connection Weaver on Constitional Law p 490
By the nature of things the state sovereignty in these matters cannot be limited
It has to be adjusted to the conditions touching the common welfare when covered by legislative enactments
This power is to the public what the law of necessity is to the individual
It is comprehended in the maxim salus populi suprema lex regard for public welfare is the highest law
It is not a rule it is an evolution
This power has always been as broad as public welfare and as strong as the arm of the state this can only be measured by the legislative will of the people subject to the fundamental rights and constitutional limita tions
This is an emanation of sovereignty subject to as aforesaid
Indeed it is the obligation of the State to assume such responsibility and protect its citizens
It has to be borne in mind as was stressed by the learned Attorney General that conferment of power and the manner of its exercise are two different matters
It was submitted that the power to conduct the suit and to compromise if neces sary was vested in the Central Government for the purpose of the Act
The power to compromise and to conduct the proceedings are not uncanalised or arbitrary
These were clearly exercisable only in the ultimate interests of the victims
The possibility of abuse of a statute does not impart to it any element of invalidity
In this connection the observations of Viscount Simonds in Belfast Corporation vs OD Commission at 520 21 are relevant where it was emphasised that validity of a measure is not be determined by its application to particular cases
This Court in Collector of Customs Madras vs Nathella Sampathu Chetty  at 825 emphasised that the consti tutional 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 reasona bleness 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 PJ Irani vs State of Madras  at 178 to 181 and DK Trivedi vs State of Gujarat 1986 Supp
SCC 20 at 60 61 64
Sections 3 and 4 of the Act should be read together as contended by the learned Attorney General along with other provisions of the Act and in particular sections 9 and 11 of the Act
These should be appreciated in the context of the object sought to be achieved by the Act as indicated in the Statement of Objects and Reasons and the Preamble to the Act
The Act was so designed that the victims of the 660 disaster are fully protected and the claims of compensation or damages for loss of life or personal injuries or in  respect of other matters arising out of or connected with the disaster are processed speedily effectively equitably and to the best advantage of the claimants
Section 3 of the Act is subject to other provisions of the Act which includes sections 4 and 11
Section 4 of the Act opens with non obstante clause vis a vis section 3 and therefore over rides section 3
Learned Attorney General submitted that the right of the Central Government under section 3 of the Act was to represent the victims exclusively and act in the place of the victims
The Central Government it was urged in other words is substituted in the place of the victims and is the dominus litis
Learned Attorney General submitted that the dominus litis carries with it the right to conduct the suit in the best manner as it deems fit including the right to withdraw and right to enter into compromise
The right to withdraw and the right to compromise conferred by section 32 of the Act cannot be exercised to defeat the rights of the victims
As to how the rights should be exer cised is guided by the objects and the reasons contained in the Preamble namely to speedily and effectively process the claims of the victims and to protect their claims
The Act was passed replacing the Ordinance at a time when many private plaintiffs had instituted complaintssuits in the American Courts
In such a situation the Government of India acting in place of the victims necessarily should have right under the statute to act in all situations including the position of withdrawing the suit or to enter into com promise
Learned Attorney General submitted that if the UCC were to agree to pay a lump sum amount which would be just fair and equitable but insists on a condition that the proceedings should be completely withdrawn then necessarily there should be power under the Act to so withdraw
Accord ing to him therefore the Act engrafted a provision empow ring the Government to compromise
The provisions under section 32b of the Act to enter into compromise was consistent with the powers of dominus litis
In this connec tion our attention was drawn to the definition of Dominus Litis  in Black s Law Dictionary Fifth Edition P 437 which states as follows  Dominus litis 
The master of the suit ie the person who was really and directly inter ested 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 interven tion or otherwise and has assumed entire control and responsibility for one side and is treated by the Court as liable for costs
Vir ginia Electric  Power Co vs Bowers ISI Va 542 263
661 65
Learned Attorney General sought to contend that the victims had not been excluded entirely either in the conduct of proceedings or in entering into compromise and he re ferred to the proceedings in detail emphasising the partici pation of some of the victims at some stage
He drew our attention to the fact that the victims had filed separate consolidated complaints in addition to the complaint filed by the Government of India
Judge Keenan of the Distt
Court of America had passed orders permitting the victims to be represented not only by the private Attorneys but also by the Govt
of India
Hence it was submitted that it could not be contended that the victims had been excluded
Learned Attorney General further contended that pursuant to the orders passed by Judge Keenan imposing certain conditions against the Union Carbide and allowing the motion for forum non convenience of the UCC that the suit came back to India and was instituted before the Distt
Court of Bhopal
In those circumstances it was urged by the learned Attorney General that the private plaintiffs who went to America and who were represented by the contingency lawyers fully knew that they could also have joined in the said suit as they were before the American Court along with the Govt
of India
It was contended that in the proceedings at any point of time or stage including when the compromise was entered into these private plaintiffs could have participated in the court proceedings and could have made their representa tion if they so desired
Even in the Indian suits these private parties have been permitted to continue as parties represented by separate counsel even though the Act empowers the Union to be the sole plaintiff
Learned Attorney General submitted that Section 4 of the Act clearly enabled the victims to exercise their right of participation in the proceedings
The Central Govt was enjoined to have due regard to any matter which such person might require to be urged
Indeed the learned Attorney General urged very strenuously that in the instant case Zehreeli Gas Kand Sangharsh Morcha and Jana Swasthya Kendra Bhopal had filed before the Distt
Judge Bhopal an application under Order I Rule 8 read with Order I Rule 10 and Section 15 1 of the CPC for their intervention on behalf of the victims
They had participated in the hearing before the learned Distt
Judge who referred to their intervention in the order
It was further emphasised that when the UCC went up in revision to the High Court of Madhya Pradesh at Jabalpur against the interim compensation ordered to be paid by the Distt
Court the intervener through its Advocate Mr Vibhuti Jha had participated in the proceedings
The aforesaid Association had also intervened in the civil appeals preferred pursuant to the special leave granted by this Court to the Union of India and Union Carbide against the judgment of the 662 High Court for interim compensation
In those circumstances it was submitted that there did not exist any other gas victim intervening in the proceedings claiming participa tion under Section 4
Hence the right to compromise provid ed for by the Act could not be held to be violative of the principles of natural justice
According to the learned Attorney General this Court first proposed the order to counsel in court and after they agreed thereto dictated the order on 14th February 1989
On 15th February 1989 after the Memorandum of Settlement was filed pursuant to the orders of the court further orders were passed
The said Association namely Zehreeli Gas Kand Sangharsh Morcha was present according to the records in the Court on both the dates and did not apparently object to the compromise
Mr Charanlal Sahu one of the petitioners in the writ petition had watched the proceedings and after the Court had passed the order on 15th February 1989 mentioned that he had filed a suit for Rs 100 crores
Learned Attorney General submit ted that Mr Sahu neither protested against the settlement nor did he make any prayer to be heard
Shri Charan Lal Sahu in the petition of opposition in one of these matters have prayed that a sum of Rs 100 million should be paid over to him for himself as well as on behalf of those vic tims whom he claimed to represent
In the aforesaid back ground on the construction of the Section it was urged by the learned Attorney General that Section 3 of the Act cannot be held to be unconstitutional
The same provided a just fair and reasonable procedure and enabled the victims to participate in the proceedings at all stages those who were capable and willing to do so
Our attention was drawn to the fact that Section 11 of the Act provides that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other enactment other than the Act
It was therefore urged that the provisions of the Civil Procedure Code stood overridden in respect of the areas covered by the Act namely a representation b powers of representation and c com promise
According to the learned Attorney General the Act did not violate the principles of natural justice
The provisions of the CPC could not be read into the Act for Section 11 of the Act provides that the application of the provision of the Civil Procedure Code in so far as those were inconsistent with the Act should be construed as over ridden in respect of areas covered by it
Furthermore inasmuch as Section 4 had given a qualified right of partic ipation to the victims there cannot be any question of violation of the principles of natural justice
The scope of the application of the principles of natural justice cannot be judged by any strait jacket formula
According to him the 663 extension of the principles of natural justice beyond what is provided by the Act in Sections 3  4 was unwarranted and would deprive the provisions of the Statute of their efficacy in relation to the achievement of speedy relief  which is the object intended to be achieved
He emphasised that the process of notice consultation and exchange of information informed decision making process the modali ties of assessing a consensus of opinion would involve such time that the Govt would be totally unable to act in the matter efficiently effectively and purposefully on behalf of the victims for realisation of the just dues of the victims
He further urged that the Civil Procedure Code before its amendment in 1976 did not have the provisions of Order l Rules 84 5  6 and Explanations etc
nor Order XXIII Rules 3A and 3B
Before the amendment the High Court had taken a view against the requirement of hearing the parties represented in the suit under Order 1 Rule 8 before it before settling or disposing of the suit
Our attention was drawn to the decision of the Calcutta High Court in Chintaharan Ghose  Ors
vs 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 vs Nanak Ram AIR 1952 Allahabad 275 where it was held that a compromise entered into in a suit filed under Order 1 Rule 8 of the CPC was binding on all persons as the plaintiffs who had instituted the suit in representative capacity had the authority to compromise
He further submitted that most if not all of the victims had given their powers of attorney which were duly filed in favour of the Union of India
These powers or attorney have neither been impeached nor revoked or with drawn
By virtue of the powers of attorney the Union of India it was stated had the authority to file the suits and to compromise the interests of the victims if so re quired
The Act in question itself contemplates settlement as we have noted and a settlement would need a common spokesman
It was submitted that the Govt
of India as the statutory representative discharged its duty and is in a centralised position of assessing the merits and demerits of any proposed course of action
So far as the act of compro mise abridging or curtailing the ambit of the 664 rights of the victims it was submitted that in respect of liabilities of UCC  UCIL be it corporate criminal or tortious it was open to an individual to take a decision of enforcing the liability to its logical extent or stopping short of it and acceding to a compromise
Just as an indi vidual can make an election in the matter of adjudication of liability so can a statutory representative make an elec tion
Therefore it is wholly wrong to contend it was urged that Section 3iib is inconsistent with individu al s right of election and at the same time it provides the centralised decision making processes to effectively adjudge and secure the common good
It was only a central agency like the Govt
of India who could have a perspective of the totality of the claims and a vision of the problems of individual plaintiffs in enforcing these it was urged
It was emphasised that it has to be borne in mind that a com promise is a legal act
In the present case it is a part of the conduct of the suit
It is therefore imperative that the choice of compromise is made carefully cautiously and with a measure of discretion it was submitted
But if any claimant wished to be associated with the conduct of the suit he would necessarily have been afforded an opportunity for that purpose according to the learned Attorney General
In this connection reference was made to Section 4 of the Act
On the other hand an individual who did not partici pate in the conduct of the suit and who is unaware of the various intricacies of the case could hardly be expected to meaningfully partake in the legal act of settlement either in conducting the proceedings or entering into compromise it was urged
In those circumstances the learned Attorney General submitted that the orders of 14 15th February 1989 and the Memorandum of Settlement were justified both under the Act and the Constitution
According to him the terms of Settlement might be envisaged as pursuant to Section 3iib of the Act which was filed according to him pursu ant to judical direction
He sought more than once to empha sise that the order was passed by the highest Court of the land in exercise of extraordinary jurisdiction vested in it under the Constitution
Our attention was drawn to several decisions for the power of this Court under Articles 136 and 142 of the Con stitution
Looked closely at the provisions of the Act it was contended that taking into consideration all the factors namely possibilities of champerty exploita tion unconscionable agreements and the need to represent the dead and the disabled the course of events would reveal a methodical and systematic protection and vindication of rights to the largest possible extent
It was observed that the rights are indispensably valuable possessions but the rights is something which a 665 man can stand on something which must be demanded or in sisted upon without embarrassment or shame
When rights are curtailed permissibility of such a measure can be examined only upon the strength urgency and the preeminence of rights and the largest good of the largest number sought to be served by curtailment
Under the circumstances which were faced by the victims of Bhopal gas tragedy the justi fying basis according to the learned Attorney General or ground of human rights is that every person morally ought to have something to which he or she is entitled
It was empha sised that the Statute aimed at it
The Act provides for assumption of rights to sue with the aim of securing speedy effective and equitable results to the best advantage of the claimants
The Act and the scheme according to the learned Attorney General sought to translate that profession into a system of faith and possible association when in doubt
Unless such a profession is shown to be unconscionable under the circumstances or strikes judicial conscience as a sub version of the objects of the Act a declaredly fair just and equitable exercise of a valid power would not be open to challenge
He disputed the submission that the right to represent victims postulated as contended mainly by the counsel on behalf of the petitioners a pre determination of each individual claim as a sine qua non for proceeding with the action
Such a construction would deplete the case of its vigour urgency and sense of purpose he urged
In this case with the first of the cases having been filed in US Federal Court on December 7 1984 a settlement would have been reached for a much smaller sum to the detriment of the victims
Learned Attorney General emphasised that this background has to be kept in mind while adjudging the valid ity of the Act and the appropriateness of the conduct of the suit in the settlement entered into
He submitted that it has to be borne in mind that if the contentions of the petitioners are entertained the rights theoretically might be upheld but the ends of justice would stand sacrificed
It is in those circumstances that it was emphasised that the claimant is an individual and is the best person to speak about his injury
The knowledge in relation to his injury is relevant for the purpose of com pensation whose distribution and disbursement is the sec ondary stage
It is fallacious to suggest that the plaint was not based upon necessary data
He insisted that the figures mentioned in the plaint although tentative were not mentioned without examination or analysis
It was further submitted by the learned Attorney General 666 that while the Govt
of India had proceeded against the UCC it had to represent the victims as a class and it was not possible to define each individual s right after careful scrutiny nor was it necessary or possible to do so in a mass disaster case
The settlement was a substitute for adjudication since it involved a process of reparation and relief
The relief and reparation cannot be said to be irrelevant for the purpose of the Act
It was stated that the alleged liability of the Govt
of India or any claim asserted against the alleged joint tort feasor should not be allowed to be a constraint on the Govt
of India to protect the interests of its own citizens
Any counter claim by UCC or any claim by a citizen against the Govt
cannot vitiate the action of the State in the collective interest of the victims who are the citizens
Learned Attorney General submitted that any industrial activity normally has to be licensed
The mere regulation of any activity does not carry with it legally a presumption of liability for injury caused by the activity in the event of a mishap occurring in the course of such an activity
In any event the learned Attor ney General submitted the Govt
of India enjoys sovereign immunity in accordance with settled law
If this were not the case the Sovereign will have to abandon all regulatory functions including the licensing of drivers of automobiles
Hence we have to examine the question whether even on the assumption that there was negligence on the part of the Govt
of India in permittinglicensing of the industry set up by the Union Carbide in Bhopal or permitting the factory to grow up such permission or conduct of the Union of India was responsible for the damage which has been suffered as a result of Bhopal gas leakage
It is further to be examined whether such conduct was in discharge of the sovereign functions of the Govt and as such damages if any result ing therefrom are liable to be proceeded against the Govt
as a joint tort feasor or not
In those circumstances it was further asserted on behalf of the Union of India that though calculation of damages in a precise manner is a logical consequence of a suit in progress it cannot be said to be a condition precedent for the purpose of settling the matter
Learned Attorney General urged that the accountabil ity to the victims should be through the court
He urged that the allegation that a large number of victims did not give consent to the settlement entered into is really of no relevance in the matter of a compromise in a mass tort action
It was highlighted that it is possible that those who do not need urgent relief or are uninformed of the issues in the case may choose to deny consent and may place the flow of relief in jeopardy
Thus consent based upon individual subjective opinion can never be correlated to the proposal of an overall settlement in an urgent matter
Learned Attorney General urged further that if indeed con sent were to be insisted upon as a mandatory 667 requirement of a Statute it would not necessarily lead to an accurate reflection of the victims  opinion as opinions may be diverse
No individual would be in a position to relate himself to a lump sum figure and would not be able to define his expectations on a global criteria
In such cir cumstances the value of consent is very much diminished
It was urged that if at all consent was to be insisted it should not be an expression of the mind without supporting information and response
To make consent meaningful it is necessary that it must be assertion of a fight to be exer cised in a meaningful manner based on information and com prehension 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 objec tively and places his opinion in the realm of fair expecta tion 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
In answer to the criticism by the petitioners it was explained on behalf of the Union of India that UCIL was not impleaded as a party in the suit because it would have militated against the plea of multinational enterprise liability and the entire theory of the case in the plaint
It was highlighted that the power to represent under the Act was exclusive the power to compromise for the Govt
of India is without reference to the victims yet it is a power guided by the sole object of the welfare of the victims
The presence and ultimately the careful imprimatur of the judi cial process is the best safeguard to the victims
Learned Attorney General insisted that hearing the parties after the settlement would also not serve any purpose
He urged that it can never be ascertained with certainty whether the victims or groups have authorised what was being allegedly spoken on their behalf and that the victims would be unable to judge a proposal of this nature
A method of consensus need not be evolved like in America where every settlement made by contingency fee lawyers who are anxious to obtain their share automatically become adversaries of the victims and the court should therefore be satisfied
Here the Court arrived at the figure and directed the parties to file a settlement on the basis of its order of February 14 1985 and the interveners were heard it was urged
It was also urged that notice to the victims individually would have been a difficult exercise and analysis of their response time consuming
668 72
The learned Attorney General urged that neither the Central Govt
nor the State Govt
of Madhya Pradesh is liable for the claim of the victims
He asserted that on the facts of the present case there is and can be no li ability on their part as joint tort feasors
For the welfare of the community several socio economic activities will have to be permitted by the Govt
Many of these activities may have to be regulated by licensing provisions contained in Statutes made either by Parliament or by State Legislatures
Any injury caused to a person to his life or liberty in the conduct of a licensed authority so as to make the said licensing authority or the Govt
liable to damages would not be in conformity with jurisprudential principle
If in such circumstances it was urged on behalf of the Govt
 the public exchequer is made liable it will cause great public injury and may result in drainage of the treasury
It would terrorise the welfare state from acting for development of the people and will affect the sovereign governmental activities which are beneficial to the community not being adequately licensed and would thereby lead to public injury
In any event it was urged on behalf of the Govt that such licensing authorities even assuming without admitting could be held to be liable as joint tort feasors it could be so held only on adequate allegations of negligence with full particulars and details of the alleged act or omission of the licensing authority alleged and its direct nexus to the injury caused to the victims
It had to be proved by cogent and adequate evidence
On some conjecture or surmise without any foundation on facts Govt s right to represent the victims cannot be challenged
It was asserted that even if the Govt
is considered to be liable as a joint tort feasor it will be entitled to claim sovereign immunity on the law as it now stands
Reference was made to the decision of this Court in Kasturilal Kalia Ram Jain vs The State of UP  where the conduct of some police officers in seizing gold in exercise of their statutory powers was held to be in discharge of the sovereign functions of the State and such activities enjoyed sovereign immunities
The liability of the Govt
of India under the Constitution has to be referred to Article 300 which takes us to Sections 15  18 of the Indian Independence Act 1947 and Section 1761 of the Govt
of India Act 1935
Reference was also made to the observations of this Court in The State of Rajasthan vs Mst
Vidhyawati  Anr 1962 2 Supp
SCR 989
We have noted the shareholding of UCC
The circum stances that financial institutions held shares in the UCIL would not disqualify 669 the Govt
of India from acting as patens patriae and in discharging of its statutory duties under the Act
The suit was filed only against the UCC and not against UCIL
On the basis of the claim made by the Govt
of India UCIL was not a necessary party
It was suing only the multinational based on several legal grounds of liability of the UCC inter alia
on the basis of enterprise liability
If the Govt
of India had instituted a suit against UCIL to a certain extent it would have weakened its case against UCC in view of the judgment of this Court in MC Mehta s case supra
Accord ing to learned Attorney General the Union of India in the present case was not proceeding on the basis of lesser liability of UCC predicated in Mehta s case but on a differ ent jurisprudential principle to make UCC strictly and absolutely liable for the entire damages
The learned Attorney General submitted that even assuming for the purpose of argument without conceding that any objection can be raised for the Govt
of India repre senting the victims to the present situation the doctrine of necessity applied
The UCC had to be sued before the American courts
The tragedy was treated as a national calamity and the Govt
of India had the right and indeed the duty to take care of its citizens in the exercise of its parens patriae jurisdiction or on principle analogous thereto
After having statutorily armed itself in recogni tion of such parens patraie right or on principles analogous thereto it went to the American courts
No other person was properly designed for representing the victims as a foreign court had to recognise a right of representation
The Govt
of India was permitted to represent the victims before the American courts
Private plaintiffs were also represented by their attorneys
A Committee of three attorneys was formed before the case proceeded before Judge Keenan
It was high lighted that the order of Judge Keenan permitted the Govt
of India to represent the victims
If there was any remote conflict of interests between the Union of India and the victims from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice that no man should be Judge in his own case
Reference may be made to Halsbury s Laws of England Vol 1 4th Edn page 89 para 73 where it was pointed that that if all the members of the only tribunal competent to determine a matter are subject to disqualifica tion 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 GA Flick Natural Justice 1879 pages 138 141
Reference was also made to the observations of this Court in J Mohapatra  Co 670  Anr
vs State of Orissa  Anr
   where at page 112 of the report the Court recognised the principle of necessity
It was submitted that these were situations where on the principle of doctrine of necessity a person interested was held not disqualified to adjudicate on his rights
The present is a case where the Govt
of India only represented the victims as a party and did not adjudicate between the victims and the UCC
It is the Court which would adjudicate the rights of the victims
The representation of the victims by the Govt
of India cannot be held to be bad and there is and there was no scope of violation of any principle of natural justice
We are of the opinion in the facts and the circumstances of the case that this contention urged by Union of India is right
There was no scope of violation of the principle of natural justice on this score
It was also urged that the doctrine of de facto representation will also apply to the facts and the circum stances of the present case
Reliance was placed on the decision of this Court in Gokaraju Rangaraju etc
vs State of AP   where it was held that the doc trine of de facto representation envisages that acts per formed within the scope of assumed official authority in the interest of public or third persons and not for one s own benefit are generally to be treated as binding as if they were the acts of officers de jure
This doctrine is rounded on good sense sound policy and practical expediency
It is aimed at the prevention of public and private mischief and protection of public and private interest
It avoides end less confusion and needless chaos
Reference was made to the observations of this Court in Pushpadevi M Jatia vs ML Wadhawan  at 389 390 and Ms Beopar Shayak P Ltd  Ors
vs Vishwa Nath  Ors 1987 3 SCC 693 at 702  703
Apart from the aforesaid doctrine doctrine of bona fide representation was sought to be resorted to in the circumstances
In this connection reference was made to Dharampal Sing vs Director of Small Industries Services  Ors AIR 1980 SC 1888 NK Mohammad Sulaiman vs NC Mohammad Ismail  Ors  and Malkarjun Bin Shigramappa Pasara vs Narhari Bin Shivappa  Anr 27 IA 2 16 77
It was further submitted that the initiation of criminal proceedings and then quashing thereof would not make the Act ultra vires so far as it concerned
Learned Attorney General submitted that the Act only authorised the Govt
of India to represent the victims to enforce their claims for damages under the Act
The Govt
as such had nothing to do with the quashing of the criminal proceedings and it was not representing the victims in respect of the criminal liability of 671 the UCC or UCIL to the victims
He further submitted that quashing of criminal proceedings was done by the Court in exercise of plenary powers under Articles 136 and 142 of the Constitution
In this connection reference was made to State of UP vs Poosu  Anr   KM Nanavati vs The State of Bombay  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 vs Smt
Sarubai  Ors  India Mica  Micanite Industries Ltd vs State of Bihar  Ors 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
vs RB Mohan Singh Oberoi 1
During the course of heating of the petitions he in formed this Court that the Govt
of India and the State Govt
of Madhya Pradesh refuted and denied any liability partial or total of any sort in the Bhopal gas Leak disas ter and this position is supported by the present state of law
It was however submitted that any claim against the Govt
of India for its alleged tortious liability was out side the purview of the Act and such claims if any are not extinguished by reason of the orders dated 14th  15th February 1989 of this Court
Learned Attorney General further stated that the amount of  470 million which was secured as a result of the memorandum of settlement and the said orders of this Court would be meant exclusively for the benefit of the victims who have suffered on account of the Bhopal gas leak disas ter
The Govt
of India would not seek any reimbursement on account of the expenditure incurred suo motu for relief and rehabilitation of the Bhopal victims nor will the Govt
or its instrumentality make any claim on its own arising from this disaster
He further assured this Court that in the event of disbursement of compensation being initiated either under the Act or under the orders of this Court a notifica tion would be instantaneously issued under Section 53 of the Act authorising the Commissioner or any other officers to discharge functions and exercise all or any powers which the Central Govt
may exercise under Section 5 to enable the victims to place before the Commissioner or the Dy
Commis sioner any additional evidence that they would like to be considered
The Constitution Bench of this Court presided over by the learned Chief Justice has pronounced an order on 4th May 1989 giving 672 reasons for the orders passed on 14th 15th February 1989
Inasmuch as good deal of criticism was advanced before this Court during the hearing of the arguments on behalf of the petitioners about the propriety and validity of the settle ment dated 14th 15th February 1989 even though the same was not directly in issue before us it is necessary to refer briefly to what the Constitution Bench has stated in the said order dated 4th May 1989
After referring to the facts leading to the settlement the Court has set out the brief reason on the following points a How did the Court arrive at the sum of 470 million US dollars for an overall settlement b Why did the Court consider the sum of 470 millions US dollars as just equitable and reasonable  c Why did the Court not pro nounce 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 multina tional companies operating with inherently dangerous technologies in the developing countries of the third world These questions were said to be of great contemporary rele vance 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
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 already been made in this direction by Judge Keenan and the learned District Judge of Bhopal
Even at the opening of the arguments in the appeals the Court had suggested to learned counsel to reach a just and fair settlement
And when counsel met for re scheduling of the hearings the suggestion was reiterated
The Court recorded that the response of learned counsel was positive in at tempting a settlement but they expressed a certain degree of uneasiness and skepticism at the prospects of success in view of their past experience of such negotiations when as they stated there had been uninformed and even irresponsi ble criticism of the attempts at settlement
673 82
Learned Attorney General had made available to the Court the particulars of offers and counter offers made on previous occasions and the history of settlement
In those circumstances the Court examined the prima facie material as the basis of quantification of a sum which having regard to all the circumstances including the prospect of delays inherent in the judicial process in India and thereafter in the matter of domestication of the decree in the US for the purpose of execution and directed that 470 million US dollars which upon immediate payment with interest over a reasonable period pending actual distribution amongst the claimants would aggregate to nearly 500 million US dollars or its rupee equivalent of approximately Rs750 crores which the learned Attorney General had suggested be made the basis of settlement and both the parties accepted this direction
The Court reiterated that the settlement proposals were considered on the premise that the Govt
had the exclu sive statutory authority to represent and act on behalf of the victims and neither counsel had any reservation on this
The order was also made on the premise that the Act was a valid law
The Court declared that in the event the Act is declared void in the pending proceedings challenging its validity the order dated 14th February 1989 would require to be examined in the light of that decision
The Court also reiterated that if any material was placed before it from which a reasonable inference was possible that the UCC had at any time earlier offered to pay any sum higher than an outright down payment of US 470 million dollars this Court would straightaway initiate suo motu action requiring the concerned parties to show cause why the order dated 14th February 89 should not be set aside and the parties relegat ed to their original positions
The Court reiterated that the reasonableness of the sum was based not only on inde pendent 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 reasona ble it was as a settlement which would avoid delay uncer tainties and assure immediate payment
An estimate in the very nature of things would not have the accuracy of an adjudication
The Court recorded the offers counter offers reasons and the numbers of the persons treated and the claims already made
The Court found that from the order of the High Court and the admitted position on the plaintiff s side a reasonable prima facie estimate of the number of fatal cases and serious personal injury cases was possible to be made
The Court referred to the High Court s 674 assessment and procedure to examine the task of assessing the quantum of interim compensation
The Court referred to M C Mehta s case reiterated by the High Court bearing in mind the factors that if the suit proceeded to trial the plaintiff Union of India would obtain judgment in respect of the claims relating to deaths and personal injuries in the following manner a Rs2 lakhs in each case of death b Rs2 lakh in each case of total permanent disability c Rs 1 lakh in each case of permanent partial disablement and d Rs50000 in each case of temporary partial disablement
Half of these amounts were awarded as interim com pensation by the High Court
The figures adopted by the High Court in regard to the number of fatal cases and cases of serious personal injuries did not appear to have been disputed by anybody before the High Court this Court observed
From those figures it came to the conclusion that the total number of fatal cases was about 3000 and of grievous and serious personal injuries as verifiable from the records was 30000
This Court also took into consideration that about 8 months after the occurrence a survey had been conducted for the purpose of identification of cases
These figures indi cated less than 10000
In those circumstances as a rough and ready estimate this Court took into consideration the prima facie findings of the High Court and estimated the number of fatal cases of 3000 where compensation could range from Rs 1 lakh to Rs3 lakhs
This would account for Rs70 crores nearly 3 times higher than what would have otherwise been awarded in comparable cases in motor vehicles accident claims
The Court recognised the effect of death and reiter ated that loss of precious human lives is irreparable
The law can only hope to compensate the estate of a person whose life was lost by the wrongful act of another only in the way the law was equipped to compensate ie by monetary compen sation calculated on certain well recognised principles
Loss to the estate which is the entitlement of the estate and the loss of dependency  estimated on the basis of capitalised present value awardable to the heirs and depend ants this Court considered were the main components in the computation of compensation in fatal accident actions but the High Court adopted a higher basis
The Court also took into account the personal injury cases and stated that these apportionments were merely broad considerations gener ally guiding the idea of reasonableness of the overall basis of 675 settlement and reiterated that this exercise was not a pre determination of the quantum of compensation amongst the claimants either individually or catagory wise and that the determination of the actual quantum of compensation payable to the claimants has to be done by the authorities under the Act
These were the broad assessments and on that basis the Court made the assessment
The Court believed that this was a just and reasonable assessment based on the materials available at that time
So far as the other question name ly 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 multi nationals 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
environmen tology futurology sociology and public health should identify the areas of common concern and help in evolving proper criteria which might receive judicial recognition and legal sanction
The Court reiterated that some of these problems were referred to in MC Mehta s case supra
But in the present case the compulsions of the need for immedi ate relief to tens of thousands of suffering victims could not wait till these questions vital though these be were resolved in due course of judicial proceedings and the tremendous suffering of thousands of persons compelled this Court to move into the direction of immediate relief which this Court thought should not be subordinated to the uncer tain promises of the law and when the assessment of fair ness of the amount was based on certain factors and assump tions not disputed even by the plaintiffs
Before considering the question of constitutional validity of the Act in the light of the background of the facts and circumstances of this case and submissions made it is necessary to refer to the order dated 3rd March 1989 passed by the Constitution Bench in respect of writ peti tions Nos 16486 and 26889 consisting of 5 learned Judges presided over by the Hon ble the Chief Justice of India
The order stated that these matters would be listed on 8th March 1989 before a Constitution Bench for decision on the sole question whether the Bhopal Gas Leak Disaster Process ing of Claims Act 1985 is ultra vires
This is a judicial order passed by the said Constitution Bench
This is not an administrative order
Thus these matters are before this Court
The question therefore arises what are these matters The aforesaid order specifically states that these matters were placed before this Bench on the sole question whether the Act is ulta vires
676 Hence these matters are not before this Bench for disposal of these writ petitions
If as a result of the determina tion one way or the other it is held good and bad and that some relief becomes necessary the same cannot be given or an order cannot be passed in respect thereof except declaring the Act or any portion of the Act valid or in valid constitutionally as the decision might be
In writ petition No 26889 there is consequential prayer to set aside the order dated 1415th February 1989
But since the order dated 3rd March 1989 above only sug gests that these matters have been placed before this Bench on the sole question  whether the Bhopal Act is ultra vires or not it is not possible by virtue of that order to go into the question whether the settlement is valid or liable to be set aside as prayed for in the prayers in these appli cations
The provisions of the Act have been noted and the rival contentions of the parties have been set out before
It is however necessary to reiterate that the Act does not in any way circumscribe the liability of the UCC UCIL or even the Govt
of India or Govt
of Madhya Pradesh if they are jointly or severally liable
This follows from the construction of the Act from the language that is apparent
The context and background do not indicate to the contrary
Counsel for the victims plead that that is so
The learned Attorney General accepts that position
The liability of the Government is however disputed
This Act also does not deal with any question of criminal liability of any of the parties concerned
On an appropriate reading of the relevant provisions of the Act it is apparent that the criminal liability arising out of Bhopal gas leak disaster is not the subject matter of this Act and cannot be said to have been in any way affected abridged or modified by virtue of this Act
This was the contention of learned counsel on behalf of the victims
It is also the contention of the learned Attor ney General
In our opinion it is the correct analysis and consequence of the relevant provisions of the Act
Hence the submissions made on behalf of some of the victims that the Act was bad as it abridged or took away the victims  right to proceed criminally against the delinquent be it UCC or UCIL or jointly or severally the Govt
of India Govt
of Madhya Pradesh or Mr Arjun Singh the erstwhile Chief Minister of Madhya Pradesh is on a wrong basis
There is no curtailment of any right with respect to any criminal liability
Criminal liability is not the subject matter of the Act
By the terms of the Act and also on the concessions made by the learned Attorney General if that be so then can non prosecution in criminal liability be a consideration or valid consideration for settlement of claims under the Act 677 This is a question which has been suggested and articulated by learned counsel appearing for the victims
On the other hand it has been asserted by the learned Attorney General that that part of the order dated 1415th February 1989 dealing with criminal prosecution or the order of this Court was by virtue of the inherent power of this Court under Articles 136  142 of the Constitution
These the learned Attorney General said were in the exercise of plenary powers of this Court
These are not considerations which induced the parties to enter into settlement
For the pur pose of determination of constitutional validity of the Act it is however necessary to say that criminal liability of any of the delinquents or of the parties is not the subject matter of this Act and the Act does not deal with either claims or rights arising out of such criminal liabil ity
This aspect is necessary to be reiterated on the ques tion of validity of the Act
We have set out the language and the purpose of the Act and also noted the meaning of the expression claim  and find that the Act was to secure the claims connected with or arising out of the disaster so that these claims might be dealt with speedily affectively equitably and to the best advantage of the claimants
In our opinion Clause b of Section 2 includes all claims of the victims arising out of and connected with the disaster for compensation and damages or loss of life or personal injury or loss to the business and flora and fauna
What however is the extent of liability is another question
This Act does not purport to or even to deal with the extent of liability arising out of the said gas leak disaster
Hence it would be improper or incorrect to contend as did Ms Jaising Mr Garg and other learned counsel appearing for the victims that the Act circumscribed the liability criminal punitive or absolute of the parties in respect of the leakage
The Act provides for a method or procedure for the establishment and enforcement of that liability
Good deal of argument was advanced before this Court on the question that the settle ment 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 fur ther hold that the Act abridged such liability and as such curtailed the rights of the victims and was bad on that score
As mentioned hereinbefore this is an argument under a misconception
The Act does not in any way except to the extent indicated in the relevant provisions of the Act circumscribe or abridge the extent of the rights of the victims so far as the liability of the delinquents are concerned
Whatever are the rights of the victims and what ever claims arise out of the 678 gas leak disaster for compensation personal injury loss of life and property suffered or likely to be sustained or expenses to be incurred or any other loss are covered by the Act and the Central Govt
by operation of Section 3 of the Act has been given the exclusive right to represent the victims in their place and stead
By the Act the extent of liability is not in any way abridged and therefore if in case of any industrial disaster like the Bhopal Gas Leak disaster there is right in victims to recover damages or compensation on the basis of absolute liability then the same is not in any manner abridged or curtailed
Over 120 years ago Rylands vs Fletcher 1868 Vol
3 LR E  I Appeal Cases 330 was decided in England
There A was the lessee of certain mines
B was the owner of a mill standing on land adjoining that under which the mines were worked
B desired to construct a reservoir and employed competent persons such as engineers and a contractor to construct it
A had worked his mines up to a spot where there were certain old passages of disused mines these passages were connected with vertical shafts which communi cated with the land above and which had also been out of use for years and were apparently filled with marl and the earth of the surrounding land
No care had been taken by the engineer or the contractor to block up these crafts and shortly after water had been introduced into the reservoir it broke through some of the shafts flowed through the old passage and flooded As mine
It was held by the House of Lords in England that where the owner of land without wilfulness or negligence uses his land in the ordinary manner of its use though mischief should thereby be occa sioned to his neighbour he will not be liable in damages
But if he brings upon his land any thing which would not naturally come upon it and which is in itself dangerous and may become mischievous if not kept under proper control though in so doing he may act without personal wilfulness or negligence he will be liable in  damages for any mischief thereby occasioned
In the background of the facts it was held that A was entitled to recover damages from B in respect of the injury
The question of liability was high lighted by this Court in MC 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 Ry lands vs Fletcher supra laid down a principle that if a person who brings on his land and collects and keep there anything likely to do harm and such thing escapes and does damage to another he is liable to compensate for the damage caused
This rule applies only to nonnatural user of the land and does not apply to things naturally on the land or where the escape is due to an act of God and an act of a stranger or the default of the person injured or where the things which escape 679 are present by the consent of the person injured or in certain cases where there is a statutory authority
There this Court observed that the rule in Rylands vs Fletcher supra evolved in the 19th century at a time when all the developments of science and technology had not taken place and the same cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure
In a modern industrial society with highly de veloped scientific knowledge and technology where hazardous or inherently dangerous industries are necessary to be carried on as part of the developmental process Courts should not feel inhibited by this rule merely because the new law does not recognise the rule of strict and absolute liability in case of an enterprise engaged in hazardous and dangerous activity
This Court noted that law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country
Law cannot afford to remain static
This Court reiterated there that if it is found necessary to construct a new principle of liability to deal with an unusual situa tion which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concomitant to an industrial economy the Court should not hesitate to evolve such principle of liability merely because it has not been so done in England
According to this Court an enterprise which is engaged in a hazardous or inherently dangerous industry which poses potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non delegable duty to the community to ensure that no harm results to anyone
The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results to anyone on account of an accident in the operation of such activity resulting for instance in escape of toxic gas the enterprise is strictly and absolute ly liable to compensate all those who were affected by the accident as part of the social cost for carrying on such activity regardless of whether it is carried on carefully or not
Such liability is not subject to any of the excep tions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher
If the enterprise is permitted to carry on a hazardous or dangerous activity for its profit the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such activity as an appropriate item of its overheads
The enterprise alone has the resources to discover and guard against haz ards or dangers and to provide warning against potential hazards
680 This Court reiterated that the measure of compensation in these kinds of cases must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect
The larger and more prosperous the enterprise the greater must be the amount of compensation payable by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise
The determination of actual damages payable would depend upon various facts and circum stances of the particular case
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 safe guard against the dangers of leakage and protection in case of leakage
Indeed the criminal prosecution that was launched against the Chairman of Union Carbide Shri Warren Anderson and others as indicated before charged them along with the defendants in the suit with delinquency in these matters and criminal negligence in conducting the toxic gas operations in Bhopal
As in the instant adjudication this Court is not concerned with the determination of the actual extent of liability we will proceed on the basis that the law enunciated by this Court in MC Mehta s case supra is the decision upon the basis of which damages will be payable to the victims in this case
But then the practical question arises what is the extent of actual damages payable and how would the quantum of damages be computed Indeed in this connection it may be appropriate to refer to the order passed by this Court on 3rd May 1989 giving reasons why the settlement was arrived at at the figure indicated
This Court had reiterated that it had proceeded on certain prima facie undisputed figures of death and substantially compen sating personal injury
This Court has referred to the fact that the High Court had proceeded on the broader principle in MC Mehta s case supra and on the basis of the capaci ty of the enterprise because the compensation must have deterrent effect
On that basis the High Court had proceeded to estimate the damages on the basis of Rs2 lakhs for each case of death and of total permanent disability Rs 1 lakh for each case of partial permanent disability and Rs50000 for each case or  temporary partial disability
In this connection the controversy as to what would have been the damages if the action had proceeded is another matter
Normally in measuring civil liability the law has attached more importance to the principle of compensation than that of punishment
Penal redress however involve both compen sation to the person injured and punish 681 ment as deference
These problems were highlighted by the House of Lords in England in Rookes vs Barnard 1964AC 1129 which indicate the difference between aggravated and exemplary damages
Salmond on the Law of Torts 15th Edition at p 30 emphasises that the function of damages is compen sation rather than punishment but punishment cannot always be ignored
There are views which are against exemplary damages on the ground that these infringe in principle the object of law of torts namely compensation and not punish ment and these tend to impose something equivalent to fine in criminal law without the safeguards provided by the criminal law
In Rookes vs Barnard supra the House of Lords in England recognised three classes of cases in which the award of exemplary damages was considered to be justi fiable
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 exem plary 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 re straint on the transgression of law which is for the ulti mate 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 con cept of damages blending both civil and criminal liabili ties
There are however serious difficulties in evolving such an actual concept of punitive damages in respect of a civil action which can be integrated and enforced by the judicial process
It would have raised serious problems of pleading proof and discovery and interesting and challeng ing as the task might have been it is still very uncertain how far decision based on such a concept would have been a decision according to due process  of law acceptable by international standards
There were difficulties in that attempt
But as the provisions stand these considerations do not make the Act constitutionally invalid
These are matters on the validity of settlement
The Act as such does not abridges or curtail damages or liability whatever that might be
So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained
Mr Garg tried to canvass before us the expanding of horizons of human rights
He contended that the conduct of the multinational corporations dealing with dangerous gases for the purpose of development specially in the conditions prevailing under the Third world countries requires closer scrutiny and vigilance on the part of emerging nations
He submitted that unless courts are alert and active 682 in preserving the rights of the individuals and in enforcing criminal and strict liability and in setting up norms com pelling the Govt
to be more vigilant and enforcing the sovereign will of the people of India to oversee that such criminal activities which endanger even for the sake of developmental work economy and progress of the country the health and happiness of the people and damage the future prospects of health growth and affect and pollute the environment should be curbed and according to him these could only be curbed by insisting through the legal adjudi cation punitive and deterrent punishment in the form of damages
He also pleaded that norms should be set up indi cating how these kinds of dangerous operations are to be permitted under conditions of vigilance and survillence
While we appreciate the force of these arguments and en dorse his plea that norms and deterrence should be aspired for it is difficult to correlate that aspect with the present problem in this decision
We do reiterate as mentioned in the Universal Declaration of Human Rights that people are born free and the dignity of the persons must be recognised and an effec tive 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 meas ures 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
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 justi fied 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
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 prose cute proceedings was only an enabling provision for the Central Govt
and not depriving or disabling provisions for the victim
Ms Jaising sought to urge in addition that in order to make the provisions constitutionally valid we should eliminate the concept of exclusiveness to the Central Govt
and give the victims right to sue along with the Central Govt
We are unable to accept these submissions
683 97
In our opinion Sections 3  4 are categorical and clear
When the expression is explicit the expression is conclusive alike in what it says and in what it does not say
These give to the Central Government an exclusive right to act in place of the persons who are entitled to make claim or have already made claim
The expression exclusive  is explicit and significant
The exclusivily cannot be whittled down or watered down as suggested by counsel
The said expression must be given its full meaning and extent
This is corroborated by the use of the expression claim  for all purposes
If such duality of rights are given to the Central Govt
along with the victims in instituting or proceeding for the realisation or the enforcement of the claims arising out of Bhopal gas leak disaster then that would be so cumbersome that it would not be speedy effec tive or equitable and would not be the best or more advanta geous procedure for securing the claims arising out of the leakage
In that view of the matter and in view of the language used and the purpose intended to be achieved we are unable to accept this aspect of the arguments advanced on behalf of the victims
It was then contended that by the procedure envisaged by the Act the victims have been de prived and deniedtheir rights and property to fight for compensation
The victims it has been asserted have been denied access to justice
It is a great deprivation it was urged
It was contended that the procedure evolved under the Act for the victims is peculiar and having good deal of disadvantages for the victims
Such special disadvantageous procedure and treatment is unequal treatment it was sug gested
It was therefore violative of Article 14 of the Constitution that is the argument advanced
The Act does provide a special procedure in respect of the rights of the victims and to that extent the Central Government takes upon itself the rights of the victims
It is a special Act providing a special procedure for a kind of special class of victims
In view of the enormity of the disaster the victims of the Bhopal gas leak disaster as they were placed against the multinational and a big Indian corporation and in view of the presence of foreign contin gency lawyers to whom the victims were exposed the claim ants 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 effec tive 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 differen tiation
The disaster being unique in its character and in the recorded history of industrial disasters situated as the victims were against a mighty multinational with 684 the presence of foreign contingency lawyers
looming on the scene in our opinion there were sufficient grounds for such differentiation and different treatment
In treating the victims of the gas leak disaster differently and provid ing them a procedure which was just fair reasonable and which was not unwarranted or unauthorised by the Constitu tion Article 14 is not breached
We are therefore unable to accept this criticism of the
The second aspect canvassed on behalf of the victims is that the procedure envisaged is unreasonable and as such not warranted by the situation and cannot be treated as a procedure which is just fair and reasonable
The argument has to be judged by the yardstick as mentioned hereinbe fore enunciated by this Court in State of Madras vs VG Rao supra
Hence both the restrictions or limitations on the substantive and procedural rights in the impugned legis lation will have to be judged from the point of view of the particular Statute in question
No abstract rule or standard of reasonableness can be applied
That question has to be judged having regard to the nature of the rights alleged to have been infringed in this case the extent and urgency of the evil sought to be remedied disproportionate imposition prevailing conditions at the time all these facts will have to be taken into consideration
Having considered the back ground the plight of the impoverished the urgency of the victims  need the presence of the foreign contingency lawyers the procedure of settlement in USA in mass action the strength for the foreign multinationals the nature of injuries and damages and the limited but significant right of participation of the victims as contemplated by s4 of the Act the Act cannot be condemned as unreasonable
In this connection the concept of parens patriae  in jurisprudence may be examined
It was contended by the learned Attorney General that the State had taken upon itself this onus to effectively come in as parens patriae we have noted the long line of Indian decisions where though in different contexts the concept of State as the parent of people who are not quite able to or competent to fight for their rights or assert their rights have been utilised
It was contended that the doctrine of parens patriae cannot be applicable to the victims
How the concept has been understood in this country as well as in America has been noted
Legal dictionaries have been referred to as noted before
It was asserted on behalf of the victims by learned counsel that the concept of parens patriae  can never be invoked for the purpose of suits in domestic juris diction of any country
This can only be applied in respect of the claims out of the 685 country in foreign jurisdiction
It was further contended that this concept of parens patraie  can only be applied in case of persons who are under disability and would not be applicable in respect of those who are able to assert their own rights
It is true that victims or their representatives are sui generis and cannot as such due to age mental capac ity 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 representa tives were after the disaster physically mentally finan cially economically and also because of the position of litigation would have to contend
In such a situation of predicament the victims can legitimately be considered to be disabled
They were in no position by themselves to look after their own interests effectively or purposefully
In that background they are people who needed the State s protection and should come within the umbrella of State s sovereignty to assert establish and maintain their rights against the wrong doers in this mass disaster
In that perspective it is jurisprudentially possible to apply the principle of parens patriae doctrine to the victims
But quite apart from that it has to be borne in mind that in this case the State is acting on the basis of the Statute itself
For the authority of the Central Govt
to sue for and on behalf of or instead in place of the victims no other theory concept or any jurisprudential principle is required than the Act itself
The Act empowers and substi tutes the Central Govt
It displaces the victims by opera tion of Section 3 of the Act and substitutes the Central Govt
in its place
The victims have been divested of their rights to sue and such claims and such rights have been vested in the Central Govt
The victims have been divested because the victims were disabled
The disablement of the victims vis a vis their adversaries in this matter is a self evident factor
If that is the position then in our opinion even if the strict application of the parens patriae  doctrine is not in order as a concept it is a guide
The jurisdiction of the State s power cannot be circumscribed by the limitations of the traditional concept of parens patriae
Jurisprudentially it could be utilised to suit or alter or adapt itself in the changed circum stances
In the situation in which the victims were the State had to assume the role of a parent protecting the rights of the victims who must come within the protective umbrella of the State and the common sovereignty of the Indian people
As we have noted the Act is an exercise of the sovereign power of the State
It is an appropriate evolution of the expression of sovereignty in the situation that had arisen
We must recognize and accept it as such
686 101
But this right and obligation of the State has another aspect
Shri Shanti Bhushan has argued and this argument has also been adopted by other learned counsel appearing for the victims that with the assumption by the State of the jurisdiction and power as a parent to fight for the victims in the situation there is an imcumbent obliga tion on the State in the words of Judge Keenan as a matter of fundamental human decency  to maintain the victims until the claims are established and realised from the foreign multinationals
The major inarticulate premise apparent from the Act and the scheme and the spirit of the Act is that so long as the rights of the victims are prose cuted 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 assump tion 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 interpre tation
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 92 provides for creation of a fund for meeting expenses in connection with the administration of the Scheme and of the provisions of the Act and clause e of Section 92 covers the amounts which the Central Govt may after due appropriation made by Parliament by law in that behalf credit to the fund re ferred to in clause d and any other amounts which may be credited to such fund
Clause f of Section 92 speaks of the utilisation by way of disbursal including apportion ment or otherwise of any amounts received in satisfaction of the claims
These provisions are suggestive but not explicit
Clause b of Section 10 which provides that in disbursing under the scheme the amount received by way of compensation or damages in satisfaction of a claim as a result of the adjudication or settlement of the claim by a court or other authority deduction shall be made from such amount of the sums if any paid to the claimant by the Govt
before the disbursal of such amount
The Scheme framed is also significant
Clause 10 of the Scheme provides for the claims and relief funds and includes disbursal of amounts as relief including interim relief to persons af fected by the Bhopal gas leak disaster and Clause 111 stipulates that disbursal of any amounts under the scheme shall be made by the Deputy Commissioner to each claimant through credit in a bank or postal saving account stressing that the legislative policy underlined 687 the Bhopal Act contemplated payment of interim relief till such time as the  Central Govt
was able to recover from the Union Carbide full amount of compensation from which the interim reliefs already paid were to be deducted from the amount payable to them for the final disbursal
The Act should be construed as creating an obligation oh the Central Govt
to pay interim relief as the Act deprives the victims of normal and immediate right of obtaining compensation from the Union Carbide
Had the Act not been enacted the victims could have and perhaps would have been entitled not only to sue the Union Carbide themselves but also to enter into settlement or compromise of some sort with them
The provi sions of the Act deprived the victims of that legal right and opportunity and that deprivation is substantial depri vation because upon immediate relief depends often the survival of these victims
In that background it is just and proper that this deprivation is only to be justified if the Act is read with the obligation of granting interim relief or maintenance by the Central Government until the full amount of the dues of the victims is realised from the Union Carbide after adjudication or settlement and then deducting therefrom the interim relief paid to the victims
As submitted by learned Attorney General it is true that there is no actual expression used in the Act itself which expressly postulates or indicates such a duty or obligation under the Act
Such an obligation is however inherent and must be the basis of properly construing the spirit of the Act
In our opinion this is the true basis and will be in consonance with the spirit of the Act
It must be to use the well known phrase the major inarticulate premise  upon which though not expressly stated the Act proceeds
It is on this promise or premise that the State would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the victims on their own
If it is only so read it can only be held to be constitutionally valid
It has to be borne in mind that the language of the Act does not militate against this construction but on the contrary Sections 9 10 and the scheme of the Act suggest that the Act contains such an obligation
If it is so read then only meat can be put into the skeleton of the Act making it meaningful and purposeful
The Act must therefore be so read
This ap proach to the interpretation of the Act can legitimately be called the constructive intuition  which in our opinion is a permissible mode of viewing the Acts of Parliament
The freedom to search for the spirit of the Act  or the quanti ty of the mischief at which it is aimed both synonymous for the intention of the parliament opens up the possibility of liberal interpretation that delicate and important branch of judicial power the concession of which is dangerous the denial ruinous
Given this freedom it is a rare 688 opportunity though never to be misused and challenge for the Judges to adopt and give meaning to the Act articulate and inarticulate and thus translate the intention of the Par liament and fulfil the object of the Act
After all the Act was passed to give relief to the victims who it was thought were unable to establish their own rights and fight for themselves
it is common knowledge that the victims were poor and impoverished
How could they survive the long ordeal of litigation and ultimate execution of the decree or the orders unless provisions be made for their sustenance and maintenance especially when they have been deprived of the fight to fight for these claims themselves We there fore read the Act accordingly
It was then contended that the Central Govt
was not competent to represent the victims
This argument has been canvassed on various grounds
It has been urged that the Central Govt
owns 22 share in UCIL and as such there is a conflict of interest between the Central Govt
and the victims and on that ground the former is disentitled to represent the latter in their battle against UCC and UCIL
A large number of authorities on this aspect were cited
However it is not necessary in the view we have taken to deal with these because factually the Central Govt
does not own any share in UCIL
These are the statutory independent organisations namely Unit Trust of India and Life Insur ance Corporation who own 20 to 22 share in UCIL
The Govt
has certain amount of say and control in LIC and UTI
Hence it cannot be said in our opinion that there is any con flict of interest in the real sense of the matter in respect of the claims of Bhopal gas leak disaster between the Cen tral Govt
and the victims
Secondly in a situation of this nature the Central Govt
is the only authority which can pursue and effectively represent the victims
There is no other organisation or Unit which can effectively represent the victims
Perhaps theoretically it might have been possible to constitute another independent statutory body by the Govt
under its control and supervision in whom the claim of the victims might have been vested and substituted and that Body could have been entrusted with the task of agitating or establishing the same claims in the same manner as the Central Govt has done under the Act
But the fact that that has not been done in our opinion does not in any way affect the position
Apart from that lastly in our opinion this concept that where there is a conflict of interest the person having the conflict should not be entrusted with the task of this nature does not apply in the instant situation
In the instant case no question of violation of the principle of natural justice arises and there is no scope for the application of the principle that no man should be a Judge in his own cause
The Central 689 Govt
was not judging any claim but was fighting and ad vancing the claims of the victims
In those circumstances it cannot be said that there was any violation of the prin ciples of natural justice and such entrustment to the Cen tral Govt
of the right to ventilate for the victims was improper or bad
The adjudication would be done by the courts and therefore there is no scope of the violation of any principle of natural justice
Along with this submission the argument was that the power and the right given to the Central Govt
to fight for the claims of the victims is unguided and uncanalised
This submission cannot be accepted
Learned Attorney General is right that the power conferred on the Central Govt
is not uncanalised
The power is circumscribed by the purpose of the Act
If there is any improper exercise or transgres sion of the power then the exercise of that power can be called in question and set aside but the Act cannot be said to be violative of the rights of the victims on that score
We have noted the relevant authorities on the question that how power should be exercised is different and separate from the question whether the power is valid or not
The next argument on behalf of the victims was that there was con flict of interest between the victims and the Govt
viewed from another aspect of the matter
It has been urged that the Central Govt
as well as the Govt
of Madhya Pradesh along with the erstwhile Chief Minister of the State of Madhya Pradesh Shri Arjun Singh were guilty of negligence malfeasance and non feasance and as such were liable for damages along with Union Carbide and UCIL
In other words it has been said that the Govt
of India and the Govt
of Madhya Pradesh along with Mr Arjun Singh are joint tort feasors and joint wrong doers
Therefore
it was urged that there is conflict of interest in respect of the claims arising out of the the gas leak disaster between the Govt
of India and the victims and in such a conflict it is improper rather illegal and unjust to vest in the Govt
of India the rights and claims of the victims
As noted before the Act was passed in a particular background and in our opinion if read in that background only covers claims against Union Carbide or UCIL
Bhopal gas leak disaster or disaster has been defined in clause a of Section 2 as the occurrence on the 2nd and 3rd days of December 1984 which involved the release of highly noxious and abnormally dangerous gas from a plant in Bhopal being a plant of the UCIL a subsidiary of the UCC of USA and which resulted in loss of life and damage to property on an extensive scale
690 104
In this context the Act has to be understood that it is in respect of the person responsible being the person in charge of the UCIL and the parent company UCC
This interpretation of the Act is further strengthened by the fact that a claimant has been defined in clause c of Section 2 as a person who is entitled to make a claim and the expression person in Section 2e includes the Govt
Therefore the Act proceeded on the assumption that the Govt could be a claimant being a person as such
Further more 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
The question whether there is scope for the Union of India being responsible or liable as a joint tort feasor is a difficult and different question
But even assuming that it was possible that the Central Government might be liable in a case of this nature the learned Attorney Gener al was right in contending that it was only proper that the Central Government should be able and authorised to repre sent the victims
In such a situation there will be no scope of the violation of the principles of natural justice
The doctrine of necessity would be applicable in a situation of this nature
The doctrine has been elaborated in Hals bury s Laws of England 4th Edition p 89 paragraph 73 where it was reiterated that even if all the members of the Tribunal competent to determine a matter were subject to disqualification they might be authorised and obliged to hear that matter by virtue of the operation of the common law doctrine of necessity An adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide may in certain circumstances be required to adjudicate if there is no other person who is competent or authorised to be adjudicator or if a quorum cannot be formed without him or if no other competent tribu nal can be constituted
In the circumstances of the case as mentioned hereinbefore the Government of India is only capable to represent the victims as a party
The adjudica tion however of the claims would be done by the Court
In those circumstances we are unable to accept the challenge on the ground of the violation of principles of natural justice on this score
The learned Attorney General howev er sought to advance as we have indicated before his contention on the ground of de facto validity
He referred to certain decisions
We are of the opinion that this prin ciple will not be applicable
We are also not impressed by the plea of the doctrine of bona fide representation of the interests of victims in all these proceedings
We are of the opinion that the doctrine of bonafide representation would not be quite relevant and as 691 such the decisions cited by the learned Attorney General need not be considered
There is however one other aspect of the matter which requires consideration
The victims can be divested of their rights ie these can be taken away from them provided those rights of the victims are ensured to be established and agitated by the Central Govt
following the procedure which would be just fair and reasonable
Civil Procedure Code is the guide which guides civil proceedings in this country and in other countries procedure akin to Civil Procedure Code
Hence these have been recognised and ac cepted 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 not withstanding 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 specifi cally contemplated any procedure to be followed in the action to be taken pursuant to the powers conferred under section 3 except to the extent indicated in section 4 of the Act
Section 5 however authorises the Central Government to have the powers of a civil court for the purpose of discharging the functions pursuant to the authority vested under sections 3 and 4 of the Act
There is no question of Central Government acting as a court in respect of the claims which it should enforce for or on behalf or instead of the victims of the Bhopal gas leak disaster
In this connection it is necessary to note that it was submitted that the Act so far as it deals with the claims of the victims should be read in conformity with Civil Procedure Code andor with the principles of natural justice and unless the provisions ofthe Act are so read it would be violative of Articles 14 and 21 of the Constitution in the sense that there will be deprivation of rights tofife and liberty without following a procedure which is just fair and reasonable
That is the main submission and contention of the different counsel for the victims who have appeared
The different view points from which this contention has been canvassed have been noted before
On the other hand on behalf of the Government the learned Attorney General has canvassed before us that there were sufficient safeguards consistent with the principles of natural justice within this Act and beyond what has been provided for 692 in a situation for which the Act was enacted nothing more could be provided and further reading down the provisions of the Act in the manner suggested would defeat the purpose of the Act
The aforesaid section 3 provides for the substitu tion of the Central Government with the  right to represent and act in place of whether within or outside India every person who has made or is entitled to make a claim in respect of the disaster
The State has taken over the rights and claims of the victims in the exercise of sovereignty in order to discharge the constitutional obligations as the parent and guardian of the victims who in the situation as placed needed the umbrella of protection
Thus the State has the power and jurisdiction and for this purpose unless the Act is otherwise unreasonable or violative of the con stitutional provisions no question of giving a hearing to the parties for taking over these fights by the State arises
For legislation by the Parliament no principle of natural justice is attracted provided such legislation is within the competence of the legislature which indeed the present Act is within the competence of the Parliament
We are in agreement with the submission of the learned Attorney General that section 3 makes the Central Government the dominus litis and it has the carriage of the proceedings but that does not solve the problem of by what procedure the proceedings should be carried
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 andor providing for such directions as to settlement and other matters
In other words it was contended on behalf of the victims that the victims should be given notice of the proceedings and there by an opportunity if they so wanted to advance their view and that to make the provisions of section 4 meaningful and effective unless notice was given to the victim disabled as he is the assumption upon which the Act has been enacted could not come and make suggestion in the proceedings
If the victims are not informed and given no opportunity the purpose of section 4 cannot be attained
693 108
On the other hand the learned Attorney General suggested that section 4 has been complied with and contended that the victims had notice of the proceedings
They had knowledge of the suit in America and of the order passed by Judge Keenan
The private plaintiffs who had gone to America were represented by foreign contingency lawyers who knew fully well what they were doing and they had also joined the said suit along with the Government of India
Learned Attor ney General submitted that section 4 of the Act clearlyenabled the victims to exercise their right of participation in the proceedings
According to him there was exclusion of vic tims from the process of adjudication but a limited partici pation was provided and beyond that participation no further participation was warranted and no further notice was just fied either by the provisions of the Act as read with the constitutional requirements or under the general principles of natural justice
He submitted that the principles of natural justice cannot be put into strait jacket and their application would depend upon the particular facts and the circumstances of a situation
According to the learned Attorney General in the instant case the legislature had formulated the area where natural justice could be applied and upto what area or stage there would be association of the victims with the suit beyond that no further applica tion of any principle of natural justice was contemplated
The fact that the provisions of the principles of natural justice have to be complied with is undisputed
This is well settled by the various decisions of the Court
The Indian Constitution mandates that clearly otherwise the Act and the actions would be violative of Article 14 of the Constitution and would also be destructive of Article 191g and negate Article 21 of the Constitution by deny ing 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 vs Union of India supra
That was a decision which dealt with the question of taking over of the industries under the Industries Development and Regula tion Act 1951
The question that arose was whether it was necessary to observe the rules of natural justice before issuing a notification under section 18A1 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 require ment of the audi alteram partem rule of natural justice at the pre decisional stage
The order in that case could be struck down as invalid on that score but the court found that in view of the concession a heating would be afforded to the company the case was remitted 694 to the Central Government to give a full fair and effective hearing
It was held that the phrase natural justice  is not capable of static and precise definition
It could not be imprisoned in the straight jacket or a cast iron formula
Rules of natural justice are not embodied rules
Hence it was not possible to make an exhaustive catalogue of such rules
This Court reiterated that audi ateram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power
The rules of natural justice can operate only in areas not covered by any law validly made
The general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not in terms exclude this rule of prior hearing but contemplates a post decisional hearing amounting to a full review of the original order on merits then such a statute would be con strued as excluding the audi alteram partem rule at the pre decisional stage
If the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected the administrative decision after post decisional hearing was good
The principles of natural justice have been exam ined by this Court in Union of India  Anr
vs Tulsi Ram Patel  Ors supra
It was reiterated that the princi ples of natural justice are not the creation of Article 14 of the Constitution
article 14 is not the begetter of the principles of natural justice but their constitutional guardian
The principles of natural justice consist inter alia of the requirement that no man should be condemned unheard
If however a legislation or a Statute expressly or by necessary implication excludes the application of any particular principle of natural justice then it requires close Scrutiny of the Court
It has been canvassed on behalf of the victims that the Code of Civil Procedure is an instant example of what is a just fair and reasonable procedure at least the princi ples embodied therein and the Act would be unreasonable if there is exclusion of the victims to vindicate properly their views and rights
This exclusion may amount to denial of justice
In any case it has been suggested and in our opinion there is good deal of force in this contention that if a part of the claim for good reasons or bad is sought to be compromised or adjusted without at least con sidering the views of the victims that would be unreasonable deprivation of the rights of the victims
After all it has to be borne in mind that injustice consists in the sense in the minds of the people affected by any act or inaction a feeling that their grievances
views or claims have gone unheeded or not considered
Such a 695 feeling is in itself an injustice or a wrong
The law mustbe 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 enter ing into a compromise seems to be embodied in the due proc ess 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 vs Election Tribunal Kotah  The Representation of the People Act 1951 contains section 90 and the proce dure 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 proce dure applicable under the Code of Civil Procedure 1908 to the trial of suits
Justice Bose speaking for the court said that it is procedure something designed to facilitate justice and further its ends and cannot be considered as a penal enactment for punishment or penalties not a thing designed to trip people up rather then help them
It was reiterated that our laws of procedure are grounded on the principle of natural justice which requires that men should not be condemned unheard that decisions should not be reached behind their backs that proceedings that affect their lives and property should not continue in their ab sence and that they should not be precluded from participat ing in them
Of course there may be exceptions and where they are clearly defined these must be given effect to
But taking by and large and subject to that proviso our laws of procedure should be construed wherever that is reasona bly possible in the light of that principle
At page 9 of the report Justice Bose observed as under But that a law of natural justice exists in the sense that a party must be heard in a Court of laW or at any rate be afforded an opportunity to appear and defend himself unless there is express provision to the contrary is we think beyond dispute
See the observations of the Privy Council in Balakrishna Udayar vs Vasudeva Ayyar ILR  800 and especially in TM Barter vs African Products Ltd AIR where Lord Buckmaster said no forms or proce dure should ever be permitted to exclude the presentation of a litigant s defence
Also Hari Vishnu s case which we have just quoted
In our opinion Wallace J was right in Venka tasubbiah vs 696 Lakshminarasimham AIR 1925 Mad 1274 in holding that One cardinal principle to be observed in trials by a Court obviously is that a party has a right to appear and plead his cause on all occasions when that cause comes on for hearing and that It follows that a party should not be deprived of that right and in fact the Court has no option to refuse that right unless the Code of Civil Procedure deprives him of it
All civilised countries accept the right to be heard as part of the due process of law where questions affecting their rights privileges or claims are considered or adjudicated
In SL Kapoor vs Jagmohan  Ors  at 765 Chinnappa Reddy J speaking for this Court observed that the concept that justice must not only be done but must manifestly be seen to be done is basic to our system
It has been reiterated that the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been ob served
The non observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary and it has been said that it will come from a person who has denied justice that the person who has been denied justice is not prejudiced
Principles of natural justice must therefore be followed
That is the normal requirement 114
In view of the principles settled by this Court and accepted all over the world we are of the opinion that in case of this magnitude and nature when the victims have been given some say by Section 4 of the Act in order to make that opportunity contemplated by section 4 of the Act meaningful and effective it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any conclusion in respect of any settlement
How that opportunity should be given would depend upon the particular situation
Fair procedure should be followed in a representative mass tort action
There are instances and some of these were also placed before us during the hearing of these matters indi cating how the courts regulate giving of the notice in respect of a mass action where large number of people s views have to be ascertained
Such procedure should be evolved by the court when faced with such a situation
The Act does not expressly exclude the application of the 697 Code of Civil Procedure
Section 11 of the Act provides the overriding effect indicating that anything inconsistent with the provisions of the Act in other law including the Civil Procedure Code should be ignored and the Act should prevail
Our attention was drawn to the provisions of Order 1 Rule 84 of the Code
Strictly speaking Order 1 Rule 8 will not apply to a suit or a proceeding under the Act
It is not a case of one having common interest with others
Here the plaintiff the Central Govt has replaced and divested the victims
Learned Attorney General submitted that as the provisions of the Code stood before 1976 Amendment the High Courts had taken the view that hearing of the parties repre sented in the suit was not necessary before compromise
Further reference was made to proviso to Order XXIII Rule 1
As in this case there is no question in our opinion of abandonment as such of the suit or part of the suit the provisions of this Rule would also not strictly apply
However Order XXIII Rule 3B of the Code is an important and significant pointer and the principles behind the said provision would apply to this case
The said rule 3B pro vides that no agreement or compromise in a representative suit shall be entered into without the leave of the court expressly recorded in the proceedings and sub rule 2 of rule 3B enjoins that before granting such leave the court shall give notice in such manner as it may think fit in a representative action
Representative suit again has been defined under Explanation to the said rule vide clause d as any other suit in which the decree passed may by virtue of the provisions of this Code or of any other law for the time being in force bind any person who is not named as party to the suit
In this case indubitably the victims would be bound by the settlement though not named in the suit
This is a position conceded by all
If that is so it would be a representative suit in terms of and for the purpose of Rule 3B of Order XXIII of the Code
If the prin ciples 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
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 con templated settlement notice should be given to the victims who are affected or whose rights are to be affected to ascertain their views
Section 4 is significant
It enjoins the Central 698 Govt
only to have due regard to any matters which such person may require to be urged
So the obligation is on the Central Govt
in the situation contemplated by Section 4 to have due regard to the views of the victims and that obligation cannot be discharged by the Central Govt
unless the victims are told that a settlement is proposed intended or contemplated
It is not necessary that such views would require consent of all the victims
The Central Govt
as the representative of the victims must have the views of the victims and place such views before the court in such manner it considers necessary before a settlement is entered into
If the victims want to advert to certain aspect of the matter during the proceedings under the Act and settlement indeed is an important stage in the proceedings 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 vic tims by the help of mass media
Our attention was drawn to similar situations in other lands  where in mass disaster actions of the present type or mass calamity actions affecting large number of people notices have been given in different forms and it may be possible to invite the views of the victims by announcement in the media Press Radro and TV etc
intimating the victims that a certain settlement is proposed or contemplat ed and inviting views of the victims within a stipulated period
And having regard to the views the Central Govt may proceed with the settlement of the action
Consent of all is not a pre condition as we read the Act under Section 4
Hence the difficulties suggested by the learned Attorney General in having the consent of all and unanimity do not really arise and should not deter us from construing the section as we have
The next aspect of the matter is whether in the aforesaid light Section 4 has been complied with
The fact that there was no Learned Attorney General however sought to canvas the view that the victims had notice and some of them had participat ed in the proceedings
We are however unable to accept the position that the victims had notice of the nature contem plated under the Act upon the underling principle of Order XXIII Rule 3B of the Code
It is not enough to say that the victims must keep vigil and watch the proceeding
One as sumption under which the Act is justified is that the vic tims were disabled to defend themselves in an action of this type
If that is so then the Court cannot presume that the victims were a lot capable 699 and informed to be able to have comprehended or contemplated the settlement
In the aforesaid view of the matter in our opinion notice was necessary
The victims at large did not have the notice
The question however is that the settlement had been arrived at after great deal of efforts to give immedi ate 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 1415th February 1989 in terms and manner as it did
It has been urged before us on behalf of some of the victims that jus tice 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 jus tice 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 proce dure does not ensure that justice appears to have been done is it valid Therefore in our opinion in the background of this question we must hold that Section 4 means and entails that before entering into any settlement affecting the rights and claims of the victims some kind of notice or information should be given to the victims we need not now spell out the actual notice and the manner of its giving to be consistent with the mandate and purpose of section 4 of the Act
This Court in its order dated 4th May 1989 had stated that in passing orders on 14th15th February 1989 this Court was impelled by the necessity of urgent relief to the victims rather than to depend upon the uncertain promise of law
The Act as we have construed requires notice to be given in what form and in what manner it need not be spelled out before entering into any settlement of the type with which we are concerned
It further appears that that type of notice which is required to be given had not been given
The question therefore is what is to be done and what is the consequence The Act would be bad if it is not construed in the light that notice before any settlement under section 4 of the Act was required to be given
Then arises the question of consequences of not giving the notice
In this adjudication we are not strictly concerned with the validity or otherwise of the settlement as we have indicat ed hereinbefore
But constitutional adjudication cannot be divorced from the reality of a situation or the impact of an adjudication
Constitutional deductions are never made in the vacuum
These deal with life s problems in the reality of a given situation
And no constitutional adjudication is also possible unless 700 one is aware of the consequences of such an adjudication
One hesitates in matters of this type where large conse quences follow one way or the other to put as under what others have put together
It is well to remember as did Justice Holmes that time has upset many fighting faiths and one must always wagar one s salvation upon some prophecy based upon imperfect knowledge
Our knowledge changes our perception of truth also changes
It is true that notice was required to be given and notice has not been given
The notice which we have contemplated is a notice before the settlement or what is known in legal terminology as pre decisional notice 
But having regard to the urgency of the situation and having regard to the need for the victims for relief and help and having regard to the fact that so much effort has gone in finding a basis for the settlement we at one point of time thought that a post decisional hearing in the facts and circumstances of this case might be consid ered to be sufficient compliance with the requirements of principles of natural justice as embodied under section 4 of the Act
The reasons that impelled this Court to pass the orders of 14th15th 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 hope lessly 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 crimi nal liability could not be absolved in the manner in which this Court has done on the 14thl5th February 1989
It was then contended that the Central Government was itself sued as a joint tort feasor
The Central Government would still be liable to be proceeded in respect of any liability to the victims if such a liability is established that liability is in no way abridged or affected by the Act or the settle ment entered into
It was submitted on behalf of the victims that if an opportunity had been given they would have perhaps pointed out that the suit against the Central Gov ernment Government of Madhya Pradesh and UCIL could not have been settled by the compromise
It is further suggested that if given an opportunity it would have been pointed out that the UCIL should have also been sued
One of the impor tant requirements of justice is that people affected by an action or inaction should have opportunity to have their say
That opportunity the victims have got when these appli cations were heard and they were heard after utmost publici ty and they would have further 701 opportunity when review application against the settlement would be heard
On behalf of the victims it was suggested that the basis of damages in view of the observations made by this Court in MC Mehta s case supra against the victims of UCC or UCIL would be much more than normal damages suffered in similar case against any other company or party which is financially not so solvent or capable
It was urged that it is time in order to make damages deterrent the damages must be computed on the basis of the capacity of a delinquent made liable to pay such damages and on the monitory capacity of the delinquent the quantum of the damages awarded would vary and not on the basis of actual consequences suffered by the victims
This is an uncertain promise of law
On the basis of evidence available and on the basis of the princi ples so far established it is difficult to foresee any reasonable possibility of acceptance of this yardstick
And even if it is accepted there are numerous difficulties of getting that view accepted internationally as a just basis in accordance with law
These however are within the realm of possibility
It was contended further by Shri Garg Shri Shanti Bhushan and Ms Jaising that all the further particulars upon which the settlement had been entered into should have been given in the  notice which was required to be given before a settlement was sanctified or accepted
We are unable to accept this position
It is not necessary that all other particulars for the basis of the proposed settlement should be disclosed in a suit of this nature before the final decision
Whatever data was already there have been disclosed that in our opinion would have been sufficient for the victims to be able to give their views if they want to
Disclosure of further particulars are not warranted by the requirement of principles of natural justice
Indeed such disclosure in this case before finality might jeopar dise luther action if any necessary so consistent with justice of the case
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 jus tice has not appeared to have been done
In view of the magnitude of the misery involved and the problems in this case we are also of the opinion that the setting aside of the settlement on this ground in view of the facts 702 and the circumstances of this case keeping the settlement in abeyance and giving notice to the victims for a post deci sional hearing would not be in the ultimate interest of justice
It is true that not giving notice was not proper because principles of natural justice are fundamental in the constitutional set up of this country
No man or no man s right should be affected without an opportunity to ventilate his views
We are also conscious that justice is a psycho logical yearning in which men seek acceptance of their view point by having an opportunity of vindication of their view point before the forum or the authority enjoined or obliged to take a decision affecting their right
Yet in the par ticular situations one has to bear in mind how an infrac tion of that should be sought to be removed is accordance with justice
In the facts and the circumstances of this case where sufficient opportunity is available when review application is heard on notice as directed by Court no further opportunity is necessary and it cannot be said that injustice has been done
To do a great right after all it is permissible sometimes to do a little wrong
In the facts and circumstances of the case this is one of those rare occasions
Though entering into a settlement without the required notice is wrong in the facts and the circum stances of this case therefore we are of the opinion to direct that notice should be given now would not result in dain justice in the situation
In the premises no further consequential order is necessary by this Court
Had it been necessary for this Bench to have passed such a consequential order we would not have passed any such consequential order in respect of the same
The sections and the scheme dealing with the deter mination of damages and distribution of the amount have also been assailed as indicated before
Our attention was drawn to the provisions of the Act dealing with the payment of compensation and the scheme framed therefore
It was submit ted that section 6 of the Act enjoins appointment by the Central Government of an officer known as the Commissioner for the welfare of the victims
It was submitted that this does not give sufficient judicial authority to the officer and would be really leaving the adjudication under the scheme by an officer of the executive nature
Learned Attor ney 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 63 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 703 tion be issued
We further direct that in the scheme of categorisation to be done by the Deputy Commissioner should be appealable to an appropriate judicial authority and the Scheme should be modified accordingly
We reiterate that the basis of categorisation and the actual categorisation should be justifiable and judicially reviewable the provisions in the Act and the Scheme should be so read
There were large number of submissions made on behalf of the victims about amending the scheme
Apart from and to the extent indicated above in our opinion it would be unsafe to tinker with the scheme piecemeal
The scheme is an integrated whole and it would not be proper to amend it piecemeal
We however make it clear that in respect of categorisation and claim the authorites must act on principles of natural justice and act quasi judicially
As mentioned hereinbefore good deal of arguments were advanced before us as to whether the clause in the settlement that criminal proceedings would not be proceeded with and the same will remain quashed is valid or invalid
We have held that these are not part of the proceedings under the Act
So the orders on this aspect in the order of 14th15th February 1989 are not orders under the Act
Therefore on the question of the validity of the Act this aspect does not arise whether the settlement of criminal proceedings or quashing the criminal proceedings could be a valid consideration for settlement or whether if it was such a consideration or not is a matter which the court reviewing the settlement has to decide
In the premise we hold that the Act is constitu tionally valid in the manner we read it
It proceeds on the hypothesis that until the claims of the victims are realised or obtained
from the delinquents namely UCC and UCIL by settlement or by adjudication and until the proceedings in respect thereof continue the Central Government must pay interim compensation or maintenance for the victims
In entering upon the settlement in view of section 4 of the Act regard must be had to the views of the victims and for the purpose of giving regard to these appropriate notices before arriving at any settlement was necessary
In some cases however post decisional notice might be sufficient but in the facts and the circumstances of this case no useful purpose would be served by giving a post decisional hearing having regard to the circumstances mentioned in the order of this Court dated 4th May 1989 and having regard to the fact that there are no further additional data and facts available with the victims which can be profitably and meaningfully presented to controvert the basis of the set tlement and further having regard to the fact that the victims had their say or on 704 their behalf their views had been agitated in these proceed ings and will have further opportunity in the pending review proceedings
No further order on this aspect is necessary
The sections dealing with the payment of compensation and categorisation should be implemented in the manner indicated before
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 disas ter a concomitant evil in this industrial age of technolog ical 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 proce dure 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 confi dence in reaching the settlement
This is a factor which emphasises the need for adherence to the principles of natural justice
The credibility of judiciary is as impor tant as the alleviation of the suffering of the victims great as these were
We hope these adjudications will re store that credibility
Principles of natural justice are integrally embedded in our constitutional framework and their pristine glory and primacy cannot and should not be allowed to be submerged by the exigencies of particular situations or cases
This Court must always assert primacy of adherence to the principles of natural justice in all adjudications
But at the same time these must be applied in a particular manner in particular cases having regard to the particular circumstances
It is therefore necessary to reiterate that the promises made to the victims and hopes raised in their hearts and minds can only be redeemed in some measure if attempts are made vigorously to distribute the amount realised to the victims in accordance with the scheme as indicated above
That would be a redemption to a certain extent
It will also be necessary to reiterate that attempts should be made to formulate the principles of law guiding the Government and the authorities to permit carry ing on of trade dealing with materials and things which have dengerous consequences within sufficient specific safeguards especially in case of multinational corporations trading in India
An awareness on these lines has dawned
Let 705 action follow that awareness
It is also necessary to reit erate that the law relating to damages and payment of inter im damages or compensation to the victims of this nature should be seriously and scientifically examined by the appropriate agencies
The Bhopal Gas Leak disaster and its aftermath of that emphasise the need for laying down certain norms and standards the Government to follow before granting permis sions or licences for the running of industries dealing with materials which are of dangerous potentialities
The Govern ment should therefore examine or have the problem examined by an expert committee as to what should be the conditions on which future licences andor permission for running industries on Indian soil would be granted and for ensuring enforcement of those conditions sufficient safety measures should be formulated and scheme of enforcement indicated
The Government should insist as a condition precedent to the grant of such licences or permissions creation of a fund in anticipation by the industries to be available for payment of damages out of the said found in case of leakages or damages in case of accident or disaster flowing from negli gent 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 sepa rately evolved for computation and payment of damages with out 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 in flicted the consequences thereof and the ability and capac ity of the parties to pay
Such should also provide for deterrent or punitive damages the basis for which should be formulated by a proper expert committee or by the Govern ment
For this purpose the Government should have the matter examined by such body as it considers necessary and proper like the Law Commission or other competent bodies
This is vital for the future
This case has taken some time
It was argued exten sively
We are grateful to counsel who have assisted in all these matters
We have reflected
We have taken some time in pronouncing our decision
We wanted time to lapse so that the heat of the moment may calm down and proper atmosphere restored
Justice it has been said is the constant and perpetual disposition to render every man his due
But what 706 is a man s due in a particular situation and in a particular circumstances is a matter for appraisement and adjustment
It has been said that justice is balancing
The balances have always been the symbol of even handed justice
But as said Lord Denning in Jones vs National Coal Board Ltd   at 64 let the advocates one after the other put the weights into the scales the nicely calculated less or more  but the judge at the end decides which way the balance tilts be it ever so slightly
This is so in every case and every situation
The applications are disposed of in the manner and with the direction we have indicated above
SINGH J 1 have gone through the proposed judgment of my learned brother Sabyasachi Mukharji CJI
I agree with the same but I consider it necessary to express my opinion on certain aspects
Five years ago between the night of December 2 3 1984 one of the most tragic industrial disasters in the recorded history of mankind occurred in the city of Bhopal in the State of Madhya Pradesh as a result of which several per sons died and thousands were disabled and physically inca pacitated for life
The ecology in and around Bhopal was adversely affected and air water and the atmosphere waspol luted its full extent has yet to be determined
UnionCar bide India Limited UCIL a subsidiary of Union Carbide Corporation a Transnational Corporation of United States has been manufacturing pesticides at its plant located in the city of Bhopal
In the process of manufacture of pesti cide the UCIL had stored stock of Methyl Isocyanate commonly known as MlC a highly toxic gas
On the night of the trage dy the MIC leaked from the plant in substantial quantity causing death and misery to the people working in the plant and those residing around it
The unprecedented catastrophe demonstrated the dangers inherent in the production of haz ardous 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 hereinafter re ferred to as the Act  conferring power on the Union of India to take over the conduct of litigation in this regard in place of the 707 individual claimants
The facts and circumstances which led to the settlement of the claims before this Court have already been stated in detail in the judgment of Mukharji CJI and therefore I need not refer to those facts and circumstances
The constitutional validity of the Act has been assailed before us in the present petitions
If the Act is declared unconstitutional the settlement which was recorded in this Court under which the UCC has already deposited a sum of Rs750 crores for meeting the claims of Bhopal Gas victims would fall and the amount of money which is already in deposit with the Registry of this Court would not be available for relief to the victims
Long and de tailed arguments were advanced before us for a number of days and on an anxious consideration and having regard to the legal and constitutional aspects and especially the need for immediate help and relief to the victims of the gas disaster which is already delayed we have upheld the constitutional validity of the Act
Mukharji CJI has ren dered a detailed and elaborate judgment with which I re spectfully agree
However I consider it necessary to say few words with regard to the steps which should be taken by the Executive and the Legislature to prevent such tragedy in future and to avoid the prolonged misery of victims of in industrial disaster
We are a developing country our national resources are to be developed in the field of science technology indus try and agriculture
The need for industrial development has led to the establishment of a number of plants and factories by the domestic companies and under industries are engaged in hazardous or inherently dangerous activities which pose potential threat to life health and safety of persons working in the factory or residing in the surrounding areas
Though working of such factories and plants is regu lated by a number of laws of our country ie the Factories Act Industrial Development and Regulation Act and Workmen s Compensation Act etc
there is no special legislation pro viding for compensation and damages to outsiders who may suffer on account of any industrial accident
As the law stands to day affected persons have to approach civil courts for obtaining compensation and damages
In civil courts the determination of amount of compensation or damages as well as the liability of the enterprise has been bound by the shackles of conservative principles laid down by the House of Lords in Ryland vs Herchief 1868 LR 3 HL page 330
The principles laid therein made it difficult to obtain adequate damages from the enterprise and that too only after the negligence of the enterprise was proved
This continued to be the position of law till a Constitution Bench of this Court in MC Mehta 708 vs Union of India  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 liabili ty of enterprises carrying hazardous or inherently dangerous activities departing from the rule laid down in Ryland vs Fletcher
The Court held as under We are of the view that an enterprise which is engaged in a hazardous or inherently dan gerous 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 non delegiable 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 obliga tion to provide that the hazardous or inher ently dangerous activity in which it is en gaged must be conducted with the highest standards of safety and if any harm results on account of such activity the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enter prise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part
Since the persons harmed on account of the hazardous or inher ently dangerous activity carried on by the enterprise would not be in a position to isolate the process of operation from the hazardous preparation of substance or any other related element that caused the harm the enterprise must be held strictly liable for causing such harm as a part of the social cost of carrying on the hazardous or inherently dangerous activity
If the enterprise is permitted to carry on an hazardous or inher ently dangerous activity for its profit the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activi ty as an appropriate item of its overheads
Such hazardous or inherently dangerous activi ty for private profit can be tolerated only on condition that the enterprise engaged in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of the carrying on of such hazardous or inherent ly dangerous activity regardless of whether it is carried on carefully or not
This 709 principle is also sustainable on the ground that the enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards
We would therefore hold that where an enterprise is engaged in a hazardous or inher ently dangerous activity and harm results to anyone on account of an accident in the opera tion of such hazardous or inherently dangerous activity resulting for example in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liabili ty is not subject to any of the exceptions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher
 The law so laid down made a land mark departure from the conservative principles with regard to the liability of an enterprise carrying on hazardous or inherently dangerous activities
In the instant cases there is no dispute that UCIL a subsidiary of UCC was carrying on activity of manufacturing pesticide and in that process it had stored MIC a highly toxic and dangerous gas which leaked causing vast damage not only to human life but also to the flora and fauna and ecology in and around Bhopal
In view of this Court s deci sion in MC 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 li ability and for that reason it has deposited a sum of Rs750 crores in this Court
The inadequacy of the amount of com pensation under the settlement was assailed by the counsel for the petitioners but it is not necessary for us to ex press 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 constitu tional validity of the Act
The Bhopal Gas tragedy has raised several important questions regarding the functioning of multi nationals in third world countries
After the Second world war colonial rule came to end in several parts of the globe as a number of natives secured independence from foreign rule
The political domination was over but the newly born nations were beset with various problems on account of lack of finances and development
A number of multi nationals and transnational corporations offered their services to the under developed and developing countries to provide finances and technical know how by 710 setting up their own industries in those countries on their own terms that brought problems with regard to the control over the functioning of the transnational corporations
Multi national companies in many cases exploited the under developed nations and in some cases they influenced politi cal and economic policies of host countries which subverted the sovereignty of those countries
There has been com plaints against the multi nationals for adopting unfair and corrupt means to advance their interests in the host coun tries
Since this was a worldwide phenomena the United Nations took up the matter for consideration
The Economic and Social Council of the United Nations established a Commission on Transnational Corporations to conduct research on various political economic and social aspects relating to transnational corporations
On a careful and detailed study the Commission submitted its Report in 1985 for evolv ing a Code of Conduct for Transnational Corporations
The Code was adopted in 1986 to which large number of countries of the world are signatories
Although it has not been fully finalised as yet the Code presents a comprehensive instru ment formulating the principles of Code of Conduct for transnational corporations carrying on their enterprises in under developed and developing countries
The Code contains provisions regarding ownership and control designed to strike balance between the competing interests of the Trans national Corporation and the host countries
It extensively deals with the political economic financial social and legal questions
The Code provides for disclosure of infor mation to the host countries and it also provides guidelines for nationalisation and compensation obligations to inter national law and jurisdiction of courts
The Code lays down provisions for settlement of disputes between the host States and an affiliate of a Transnational Corporation
It suggests that such disputes should be submitted to the national courts or authorities of host countries unless amicably settled between the parties
It provides for the choice of law and means for dispute settlement arising out of contracts
The Code has also laid down guidelines for the determination of settlement of disputes arising out of accident and disaster and also for liability of Transnation al Corporations and the jurisdiction of the courts
The Code is binding on the countries which formally accept it
It was stated before us that India has accepted the Code
If that be so it is necessary that the Government should take effective measures to translate the provisions of the Code into specific actions and policies backed by appropriate legislation and enforcing machinery to prevent any accident or disaster and to secure the welfare of the victims of any industrial disaster
In the context of our national dimensions of human rights right 711 to life liberty pollution free air and water is guaranteed by the Constitution under Articles 21 48A and 5lg it is the duty of the State to take effective steps to protect the guaranteed constitutional rights
These rights must be integrated and illumined by the evolving international dimensions and standards having regard to our sovereignty as highlighted by Clauses 9 and 13 of UN Code of conduct on Transnational Corporations
The evolving standards of international obligations need to be respected maintaining dignity and sovereignty of our people the State must take effective steps to safeguard the constitutional rights of citizens by enacting laws
The laws so made may provide for conditions for granting licence to Transnational Corpora tions prescribing norms and standards for running indus tries on Indian soil ensuring the constitutional rights of our people relating to life liberty as well as safety to environment and ecology to enable the people to lead a healthy and clean life
A Transnational Corporation should be made liable and subservient to laws of our country and the liability should not be restricted to affiliate company only but the parent corporation should also be made liable for any damage caused to the human being or ecology
The law must require transnational corporations to agree to pay such damages as may be determined
by the statutory agencies and forum constituted under it without exposing the victims to long drawn litigation
Under the existing civil law damages are determined by the Civil Courts after a long drawn litigation which destroys the very purpose of awarding damages
In order to meet the situation to avoid delay and to ensure immediate relief to the victims we would suggest that the law made by the Parliament should provide for constitution of tribunals regulated by special procedure for determining compensation to victims of industrial disaster or accident appeal against which may lie to this Court on limited ground of questions of law only after depositing the amount determined by the Tribunal
The law should also provide for interim relief to victims during the pendency of proceedings
These steps would minimise the misery and agony of victims of hazardous enterprises
There is yet another aspect which needs consideration by the Government and the Parliament
Industrial development in our country and the hazards involved therein pose a mandatory need to constitute a statutory Industrial Disas ter Fund contributions to which may be made by the Gov ernment the industries whether they are transnational corporations or domestic undertakings public or private
The extent of contribution may be worked out having regard to the extent of hazardous nature of the enterprise and other allied matters
The Fund should be permanent in nature so that money is 712 readily available for providing immediate effective relief to the victims
This may avoid delay as has happened in the instant case in providing effective relief to the victims
The Government and the Parliament should therefore take immediate steps for enacting laws having regard to these suggestions consistent with the international norms and guidelines as contained in the United Nations Code of Con duct 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 poi sonous 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 multina tional giant the Union Carbide Corporation UCC
A number of civil suits claiming damages from the UCC were filed in the United States of America and similar litigation also followed in Indian courts
Fearing the possibilities of the exploitation of the situation by vested interests the Government of India enacted the  the  to regulate the course of such litigation
Briefly speaking it empowered the Union of India to take over the conduct of all litiga tion in this regard and conduct it in place of or in asso ciation with the individual claimants
It also enabled the Union to enter into a compromise with the UCC and UCIL and arrive at a settlement
The writ petitions before us have been filed challenging the constitutional validity of this statute on the ground that the divestiture of the claimants  individual rights to legal remedy against the multinational for the consequences of carrying on dangerous and hazardous activities on our soil violates the fundamental rights guaranteed under article 14 19 and 21 of the Constitution
In consequence of certain proceedings before Judge Keenan of the US District Courts the venue of the litiga tion shifted to India
In the principal suit filed in India by the Union Civil Suit No 111386 orders were passed by the trial court in Bhopal directing the UCC to deposit Rs370 crores reduced to Rs250 crores by the Madhya Pra desh High Court as interim payment to the gas victims pending disposal of the suit
There were appeals to this Court in which the 713 UCC contested the Court s jurisdiction to pass an order for an interim payment in a suit for money while the Union pleaded that a much higher interim payment should have been granted
When the matter was being argued in this Court a settlement was arrived at between the Union and the UCC under which a sum of Rs750 crores has been received by the Union in full settlement of all the claims of all victims of the gas leak against the UCC
The Union also agreed to withdraw certain prosecutions that had been initiated against the officials of the UCC and UCIL in this connec tion
This settlement received the imprimatur of this Court in its orders dated 14th  15th February 1989
It is unfortunate that though the writ petitions before us were pending in this Court at that time neither their contents nor the need for considering first the issue of the validity of the 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 under which it was effected stood undecided
When this was brought to the notice of the above Bench it di rected 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 settle ment
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 de veloping 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 pur sued
Secondly they are of the view that the amount for which the claims have been settled is a pittance far below the amount of damages they would have been entitled to on the principles of strict absolute and punitive liability enunciated by this Court in Mehta s case 1987 1 SCR 819
Thirdly their grievance is that no publicity at all was given before this court passed its order to enable individual claimants or groups of them to put forward their suggestions or objections to the settlement proposed
Their interests were sealed they say without complying with elementary principles of natural justice
They contend that the provisions of an which has made such a settlement possible cannot be constitutionally valid
714 The arguments before us ranged over a very wide ground covered several issues and extended to several days
This Bench has been placed in somewhat of a predicament as it has to pronounce on the validity of the provisions of the in the context of an implementation of its provisions in a particular manner and though we cannot and do not express any views regarding the merits of the settlement we are asked to consider whether such settlement can be consistent with a correct and proper interpretation of the tested on the touchstone of the fundamental rights guaranteed under the Constitution
Mukharji CJ has outlined the issues dealt elaborately with the contentions urged and given expression to his conclusions in a learned elaborate and detailed judgment which we have had the advantage of perus ing in draft
Our learned brother KN Singh J has also highlighted certain aspects in his separate judgment
We are in large measure in agreement with them but should like to say a few words on some of the issues in this case particularly those in regard to which our approach has been somewhat different 1
The issue regarding the validity of the turns principally on the construction of sections 3 and 4 of the 
We are inclined to hold that the fact that a settlement has been effected or the circumstances in which or the amount for which the claims of the victims have been set tled do not have a bearing on this question of interpreta tion and have to be left out of account altogether except as providing a contextual background in which the question arises
Turning therefore to the statute and its implica tions the position is this
Every person who suffered as a consequence of the gas leak had a right to claim compensa tion from the persons who according to him were liable in law for the injury caused to him and also a fight to insti tute 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 section 33 and b subject to the provisions of section 4 for this section clearly states that it is the Central Government and the Central Government alone which has the right to represent and act in place of the claimants whether within or outside India for all purposes in 715 connection with the enforcement of his claims
We may first consider how far the main provision in section 3 leaving out of account the proviso as well as section 4 is compatible with the Constitution The first question that arises is whether the legisla ture is justified in depriving the claimants of the right and privilege of enforcing their claims and prosecuting them in such manner as they deem fit and in compulsorily inter posing or substituting the Government in their place
We think that to this question there can be only one answer
As pointed out by our learned brother the situation was such that the victims of the tragedy needed to be protected against themselves as their adversery was a mighty multi national corporation and proceedings to a considerable extent had been initiated in a foreign country where the conduct of the cases was entrusted to foreign lawyers under a system of litigation which is unfamiliar to us here
In the stark reality of the situation it cannot even be plau sibly contended that the large number of victims of the gas leak disaster should have been left to fend for itself and merely provided with some legal aid of one type or another
It is necessary to remember that having regard to the identity of the principal ground of claim of all the vic tims even if a single victim was not diligent in conducting his suit or entered into a compromise or submitted to a decree judging the issues purely from his individual point of view such a decision or decree could adversely affect the interests of the innumerable other victims as well
In fact it appears that a settlement between one set of claim ants and the adversary corporation was almost imminent and would perhaps have been through out for the timely interven tion of the Government of India
The battle for the enforce ment of one s rights was bound to be not only prolonged but also very arduous and expensive and the decision of the legislature that the fight against the adversary should be consolidated and its conduct handed over to the Government of India it may perhaps have been better if it had been handed over to an autonomous body independent of the Govern ment but as pointed out by our learned brother the course adopted was also not objectionable was perhaps the only decision that could have been taken in the circumstances
This is indeed a unique situation in which the victims in order to realise to the best advantage their rights against UCC had to be helped out by transposing that right to be enforced by the Government
We did not indeed understand any learned counsel before us to say that the legislature erred in entrusting the Government of India 716 with the responsibility of fighting for the victims
The only grievance is that in the process their right to take legal proceedings should not have been completely taken away and that they should also have had the liberty of partici pating in the proceedings right through
In fact though the 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 proceed ings but the other victims or such of them as chose to associate themselves in these proceedings by becoming par ties 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 section 3 had been scrupulously observed and the names of all parties other than the Central Government had been got deleted from the array of parties in the suits and proceedings pending in this country we do not think that the result would have been fatal to the interests of the litigants
On the con trary it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising their rights against the Union Carbide Corpora tion
Such representation can well be justified by resort to a principle analogous to if not precisely the same as that of parens patriae
A victim of the tragedy is compelled to part with a valuable right of his in order that it might be more efficiently and satisfactory exploited for his benefit than he himself is capable of
It is of course possible that there may be an affluent claimant or lawyer engaged by him who may be capable of fighting the litiga tion better
It is possible that the Government of India as a litigant may or may not be able to pursue the litigation with as much determination or capability as such a litigant
But in a case of the present type one should not be con founded by such a possibility
There are more indigent litigants than affluent ones
There are more illiterates than enlightened ones
There are very few of the claimants capable of finding the financial wherewithal required for fighting the litigation
Very few of them are capable of prosecuting such a litigation in this country not to speak of the necessity to run to a foreign country
The financial position of UCIL was negligible compared to the magnitude of the claim that could arise and though eventually the battle had to be pitched on our own soil an initial as well as final recourse to legal proceedings in the United States was very much on the cards indeed inevitable
In this situa tion the legislature was perfectly justified in coming to the aid of the victims with this piece of legislation and in asking the Central Government to shoulder the responsibility by substituting itself in place of the victims 717 for all purposes connected with the claims
Even if the had provided for a total substitution of the Government of India in place of the victims and had completely precluded them from exercising their rights in any manner it could perhaps have still been contended that such deprivation was necessary in larger public interest
But the is not so draconian in its content
Actual ly as we have said a little earlier the grievance of the petitioners is not so much that the Government was entrusted with the functions
of a dominus litis in this litigation
Their contention is that the whole object and purpose of the litigation is to promote the interests of the claimants to enable them to fight the UCC with greater strength and determination to help them overcome limitations of time money and legal assistance and to realise the best compensa tion possible consistent not only with the damage suffered by them but also consistent with national honour and pres tige
It is suggested that the power conferred on the Gov ernment should be construed as one hedged in by this domi nant 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 section 33 and of section 4 furnish an answer to this contention
While the provision contained in the main part of section 3 may be sufficient to enable the Government of India to claim to represent the claimants and initiate and conduct suits or proceeding on their behalf the locus standi of the Government of India in suits filed by other claimants before the commencement of the out side India would naturally depend upon the discretion of the court enquiring into the matter
That is why the proviso to section 3 makes the right of the Government of India to represent and act in place of the victims in such proceed ings subject to the permission of the court or authority where the proceedings are pending
It is of course open to such court to permit the Central Government even to displace the claimants if it is satisfied that the authority of the is sufficient to enable it to do so
In the present case it is common ground that the proceedings before Judge Keenan were being prosecuted by the Central Government along with various individual claimants
Not only did Judge Keenan permit the association of the Government of India in these proceedings but the Government of India did have a substan tial voice in the course of those proceedings as well
Again section 4 mandates that notwithstanding anything 718 contained in section 3 the Central Government in repre senting and acting in place of any person in relation to any claim shall have due regard to any matters which such person may require to be urged with respect to his claim
It also stipulates that if such person so desires the Central Government shall permit at the expense of such person a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim
In other words though perhaps strictly speaking under section 3 the Central Government can totally exclude the victim himself or his legal practitioner from taking part in the proceedings except in pending suits outside India section 4 keeps the substance of the rights of the victims in tact
It enables and indeed obliges the Govern ment to receive assistance from individual claimants to the extent they are able to offer the same
If any of the vic tims or their legal advisers have any specific aspect which they would like to urge the Central Government shall take it into account
Again if any individual claimant at his own expense retains a legal practitioner of his own choice such legal practitioner will have to be associated with the Government in the conduct of any suit or proceeding relating to his claim
Sections 3 and 4 thus combine together the interests of the weak illiterate helpless and poor victims as well as the interests of those who could have managed for themselves even without the help of this enactment
The combination thus envisaged enables the Government to fight the battle with the foreign adversary with the full aid and assistance of such of the victims or their legal advisers as are in a position to offer any such assistance
Though section 3 denies the claimants the benefit of being eo nominee parties in such suits or proceedings section 4 preserves to them substantially all that they can achieve by proceeding on their own
In other words while seeming to deprive the claimants of their right to take legal action on their own it has preserved those rights to be exercised indirectly
A conjoint reading of sections 3 and 4 would in our opinion therefore show that there has been no real total deprivation of the right of the claimants to enforce their claim for damages in appropriate proceedings before any appropriate forum
There is only a restriction of this right which in the circumstances is totally reasonable and justified
The validity of the is therefore not liable to be challenged on this ground
The next angle from which the validity of the provision is attacked is that the provision enabling the Government to enter into a compromise is bad
The argument runs thus The object of the legislation can be furthered only if it per mits the Government to prosecute the litigation more effec tively and not if it enables the Government to 719 withdraw it or enter into a compromise
According to them the fails the impecunious victims in this vital aspect
The authority conferred by the on the Government to enter into a settlement or compromise it is said amounts to an absolute negation of the rights of the claimants to compensation and is capable of being so exercised to render such rights totally valueless as in fact it is said has happened
It appears to us that this contention proceeds on a misapprehension
It is common knowledge that any authority given to conduct a litigation cannot be effective unless it is accompanied by an authority to withdraw or settle the same if the circumstances call for it
The vagaries of a litigation of this magnitude and intricacy could not be fully anticipated
There were possibilities that the litiga tion may have to be fought out to the bitter finish
There were possibilities that the UCC might be willing to ade quately compensate the victims either on their own  or at the insistence of the Government concerned
There was also the possibility which had already been in evidence before Judge Keenan that the proceedings might ultimately have to end in a negotiated settlement
One notices that in most of the mass disaster cases reported proceedings finally end in a compromise if only to avoid an indefinite prolongation of the agonies caused by such litigation
The legislation therefore cannot be considered to be unreasonable merely because in addition to the right to institute a suit or other proceedings it also empowers the Government to with draw the proceedings or enter into a compromise
Some misgivings were expressed in the course of the hearing of the legislative wisdom and hence the validity of entrusting the carriage of these proceedings and in particular the power of settling it out of Court to the Union of India
It was contended that the union is itself a joint tort feasor sued as such by some of the victims with an interest adverse to the victims in keeping down the amount of compensation payable to the minimum so as to reduce its own liability as a joint tort feasor
It seems to us that this contention in misconceived
As pointed out by Mukharji CJ the Union of India itself is one of the entities affected by the gas leak and has a claim for com pensation from the UCC quite independent of the other vic tims
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 compen sation possible for itself and the other victims
It is therefore the best agency in the circumstances that could be looked up to for fighting the UCC on its own as well as on behalf of the victims
The suggestion that the Union is a joint tort lessor has been 720 stoutly resisted by the learned Attorney General
But even assuming that the Union has some liability in the matter we fail to see how it can derive any benefit or advantage by entering into a low settlement with the UCC
as is pointed out later in this judgment and by Mukharji CJ the and Scheme thereunder have provided for an objective and quasi judicial determination of the amount of damages pay able to the victims of the tragedy
There is no basis for the fear expressed during the hearing that the officers of the Government may not be objective and may try to cut down the amounts of compensation so as not to exceed the amount received from the UCC
It is common ground and indeed the learned Attorney General fairly conceded that the settle ment with the UCC only puts an end to the claims against the UCC and UCIL and does not in any way affect the victims  rights if any to proceed against the Union the State of Madhya Pradesh or the ministers and officers thereof if so advised
If the Union and these officers are joint tort lessors as alleged the Union will not stand to gain by allowing the claims against the UCC to be settled for a low figure
On the contrary it will be interested in settling the claims against the UCC at as high a figure as possible so that its own liability as a joint tort feasor if made out can be correspondingly reduced
We are therefore unable to see any vitiating element in the legislation insofar as it has entrusted the responsibility not only of carrying on but also of entering into a settlement if thought fit
Nor is there basis for the contention that the enables a settlement to be arrived at without a proper opportunity to the claimants to express their views on any proposals for settlement that may be mooted
The right of the claimant under section 4 to put forward his suggestions or to be represented by a legal practitioner to put forth his own views in the conduct of the suit or other proceeding certainly extends to everything connected with the suit or other proceeding
If in the course of the proceedings there should arise any question of compromise or settlement it is open to the claimants to oppose the same and to urge the Central Government to have regard to specific aspects m arriving at a settlement
Equally it is open to any claimant to employ a legal practitioner to ventilate his opinions in regard to such proposals for settlement
The provisions of the  read by themselves therefore guarantee a complete and full protection to the rights of the claimants in every respect
Save only that they cannot file a suit themselves their right to acquire redress has not really been abridged by the provisions of the 
Sections 3 and 4 of the properly read in our opinion completely vindicate the objects and reasons which compelled Parliament to enact this piece of legislation
721 Far from abridging the rights of the claimants in any man ner these provisions are so worded as to enable the Govern ment 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
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 approv ing of the proposed settlement
Reference was made in this context to MC Mehta s case supra
Whether the settlement should have taken into account this factor is in the first place a moot question
Mukharji CJ has pointed out and we are inclined to agree that this is an uncertain province of the law and it is premature to say whether this yard stick has been or will be accepted in this country not to speak of its international acceptance which may be necessary should occasion arise for executing a decree based on such a yardstick in another country
Secondly whether the settle ment took this into account and if not whether it is bad for not having kept this basis in view are questions that touch the merits of the settlement with which we are not concerned
So we feel we should express no opinion here on this issue
It is too far fetched it seems to us to con tend that the provisions of the permitting the Union of India to enter into a compromise should be struck down as unconstitutional because they have been construed by the Union of India as enabling it to arrive at such a settle ment
The argument is that the confers a discretionary and enabling power in the Union to arrive at a settlement but lays down no guidelines or indications as to the stage at which or circumstances in which a settlement can be reached or the type of settlement that can be arrived at the power conferred should therefore be struck down as unguided arbitrary and uncanalised
It is difficult to accept this contention
The power to conduct a litigation particularly in a case of this type must to be effective necessarily carry with it a power to settle it at any stage
It is impossible to provide statutorily any detailed 722 catalogue of the situations that would justify a settlement or the basis or terms on which a settlement can be arrived at
moreover cannot be said to have conferred any unguided or arbitrary discretion to the Union in conducting proceedings under the 
Sufficient guidelines emerge from the Statement of Objects and Reasons of the which makes it clear that the aim and purpose of the is to secure speedy and effective redress to the victims of the gas leak and that all steps taken in pursuance of the should be for the implementation of the object
Whether this object has been achieved by a particular settlement will be a different question but it is altogether impossible to say that the itself is bad for the reason alleged
We therefore think it necessary to clarify for our part that we are not called upon to express any view on the observa tions in Mehta s case and should not be understood as having done so
Shri Shanti Bhushan who supported the Union s stand as to the validity of the  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 and scheme thereunder envisage interim payments to the victims so there is nothing objectionable in this on this aspect
However our learned brother has accept ed the argument addressed by Shri Shanti Bhushan which goes one step further viz that the would be unconstitutional unless this is read as a major inarticulate promise under lying the 
We doubt whether this extension would be justified for the hypothesis underlying the argument is in the words of Sri Shanti Bhushan that had the victims been left to fend for themselves they would have had an immedi ate and normal right of obtaining compensation from the Union Carbide and as the legislation has vested their rights in this regard in the Union the should be con strued as creating an obligation on the Central Government to provide interim relief
Though we would emphatically reiterate that grant of interim relief to ameliorate the plight of its subjects in such a situation is a matter of imperative obligation on the part of the State and not merely a matter of fundamental human decency  as Judge Keenan put it we think that such obligation flows from its character as a welfare State and would exist irrespective of what the statute may or may not provide
In our view the validity of the does not depend upon its 723 explicitly or implicitly providing for interim payments
We say this for two reasons
In the first place it was and perhaps still is a moot question whether a plaintiff suing for damages in tort would be entitled to advance or interim payments in anticipation of a decree
That was indeed the main point on which the interim orders in this case were challenged before this Court and in the context of the events that took place remains undecided
It may be men tioned here that no decided case was brought to our notice in which interim payment was ordered pending disposal of an action in tort in this country
May be there is a strong case for ordering interim payments in such a case but in the absence of full and detailed consideration it cannot be assumed that left to themselves the victims would have been entitled to a normal and immediate right to such payment
Secondly even assuming such right exists all that can be said is that the State which put itself in the place of the victims should have raised in the suit a demand for such interim compensation which it did and that it should distribute among the victims such interim compensation as it may receive from the defendants
To say that the would be bad if it does not provide for payment of such compensa tion by the Government irrespective of what may happen in the suit is to impose on the State an obligation higher than what flows from its being subrogated to the rights of the victims
As we agree that the and the scheme thereunder envisage interim relief to the victims the point is perhaps only academic
But we felt that we should mention this as we are not in full agreement with Mukharji CJ on this aspect on the case
The next important aspect on which much debate took place before us was regarding the validity of the qua the procedure envisaged by it for a compromise or settle ment
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 CPC
The argument runs thus section 4 of the 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 
Or it does not in which event the provisions of section 4 would be bad as making possible an arbi trary deprivation of the victims  rights being inconsistent with and derogatory of the basic rules established by the ordinary Law of the land viz the Code of Civil Procedure
We are inclined to take the view that it is not possible to bring the suits brought under the within the categories of representative action envisaged in the Code of Civil procedure
The 724 deals with a class of action which is sui generis and for which a special formula has been found and encapsuled in section 4
The divests the individual claimants of their right to sue and vests it in the Union
In relation to suits in India the Union is the sole plaintiff none of the others are envisaged as plaintiffs or respondents
The victims of the tragedy were so numerous that they were never defined at the stage of filing the plaint nor do they need to be de fined at the stage of a settlement
The litigation is car ried on by the State in its capacity not exactly the same as but somewhat analogous to that of a parens patriae
In the case of a litigation by karta of a Hindu Undivided Family or by a guardian on behalf of a ward who is non sui juris for example the junior members of the family or the wards are not to be consulted before entering into a set tlement
In such cases the Court acts as guardian of such persons to scrutinise the settlement and satisfy itself that it is in the best interest of all concerned
It is later discovered that there has been any fraud or collusion it may be open to the junior members of the family or the wards to call the karta or guardian to account but barring such a contingency the settlement would be effective and binding
In the same way the Union as parens patriae would have been at liberty to enter into such settlement as it consid ered best on its own and seek the Court s approval there fore
However realising that the litigation is truly fought on behalf and for the benefit of innumerable though not fully identified victims the has considered it necessary to assign a definite role to the individual claimants and this is spelt out in section 4
This section directs i that the union shall have due regard to any matters which such person may require to be urged with respect to his claim and ii that the Union shaH if such person so desires permit at the expense of such person a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim
This provision adequately safeguards the interests of indi vidual victims
It enables each one of them to bring to the notice of the Union any special features or circumstances which he would like to urge in respect of any matter and if any such features are brought to its notice the Union is obliged to take it into account
Again the individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the proceed ings
If the suits in this 725 case had proceeded in the normal course either to the stage of a decree or even to one of settlement the claimants could have kept themselves abreast of the developments and the statutory provisions would have been more than adequate to ensure that the points of view of all the victims are presented to the court
Even a settlement or compromise could not have been arrived at without the court being apprised of the views or any of them who chose to do so
Advisedly the statute has provided that though the Union of India will be the dominus litis in the suit the interests of all the victims and their claims should be safeguarded by giving them a voice in the proceedings to the extent indi cated above
This provision of the statute is an adaptation of the principle of OIr 8 and of Or
XXIII r 3 of the Code of Civil Procedure in its application to the suits governed by it and though the extent of participation allowed to the victims is somewhat differently enunciated in the legislation substantially speaking it does incorporate the principles of natural justice to the extent possible in the circumstances
The statute cannot therefore be fault ed as has been pointed out earlier also on the ground that it denies the victims an opportunity to present their views or places them at any disadvantage in the matter of having an effective voice in the matter of settling the suit by way of compromise
The difficulty in this case has arisen as we see it because of a fortuitous circumstance viz that the talks of compromise were mooted and approved in the course of the hearing of an appeal from an order for interim payments
Though compromise talks had been in the air right from the beginning of this episode it is said that there was an element of surprise when they were put forward in Court in February 1989
This is not quite correct
It has been pointed out that even when the issue regarding the interim relief was debated in the courts below attempts were made to settle the whole litigation
The claimants were aware of this and they could perhaps should have anticipated that similar attempts would be made in this Court also
Though certain parties had been associated with the conduct of the proceedings in the trial court and the trial judge did handsomely acknowledge their contribution to the proceed ings they were apparently not alert enough to keep a watch ing brief in the Supreme Court may be under the impression that the appeal here was concerned only with the quantum of interim relief
One set of parties was present in the Court but apart from praying that he should be forthwith paid a share in the amount that would be deposited in Court by the UCC in pursuance of the settlement no attempt appears to have been made to put forward a contention that the amount of settlement was inade 726 quate or had not taken into account certain relevant consid erations
The Union also appears to have been acting on the view that it could proceed ahead on its own both in its capacity as parens patraie as well as in view of the powers of attorney held by it from a very large number of the victims though the genuineness of this claim is now contested before us
There was a day s interval between the enunciation of the terms of the settlement and their approv al 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 has provided an adequate opportunity to the victims to speak out and if they or the counsel engaged by some of them in the trial court had kept in touch with the proceedings in this court they could have most certainly made themselves heard
If a feeling has gained ground that their voice has not been fully heard the fault was not with the statute but was rather due to the developments leading to the finalisation of the settlement when the appeal against the interim order was being heard in this Court
One of the points of view on which considerable emphasis was laid in the course of the arguments was that in a case of this type the offending parties should be dealt with strictly under the criminal law of the Land and that the inclusion as part of the settlement of a term requiring the withdrawal of the criminal prosecutions launched was totally unwarranted and vitiates the settlement
It has been pointed out by Mukharji CJ  and we agree that the talks only of the civil liability of and the proceedings against the UCC or UCIL or others for damages caused by the gas leak
It has nothing to say about the criminal liability of any of the parties involved
Clearly therefore this part of the settlement comprises a term which is outside the purview of the 
The validity of the cannot there fore be impugned on the ground that it permits and should not have permitted the withdrawal of criminal proceedings against the delinquents
Whether in arriving at the settle ment this aspect could also have been taken into account and this term included in it is a question concerning the validity of the settlement
This is a question outside the terms of reference to us and we therefore express no opinion in regard thereto
A question was mooted before us as to whether the actual settlement if not the statutory provision is liable to be set aside on the grounds that the principles of natu ral justice have been flagrantly 727 violated
The merits of the settlement as such are not in issue before us and nothing we say can or should fetter the hands of the Bench hearing a review petition which has already been filed from passing such orders thereon as it considers appropriate
Our learned brother however has while observing that the question referred to us is limited to the validity of the alone and not the settlement incidentally discussed this aspect of the case too
He has pointed out that justice has in fact been done and that all facts and aspects rele vant for a settlement have been considered
He has pointed out that the grievance of the petitioners that the order of this Court did not give any basis for the settlement has since been sought to be met by the order passed on 4th May 1989 giving detailed reasons This shows that the Court had applied its mind fully to the terms of the settlement in the light of the data as well as all the circumstances placed before it and had been satisfied that the settlement pro posed was a fair and reasonable one that could be approved
In actions of this type the Court s approval is the true safety valve to prevent unfair settlements and the fact is that the highest Court of the land has given thought to the matter and seen it fit to place its seal of approval to the settlement
He has also pointed out that a post decisional hearing in a matter like this will not be of much avail
He has further pointed out that a review petition has already been filed in the case and is listed for hearing
The Court has already given an assurance in its order of May 4 1989 that it will only be too glad to consider any aspects that may have been overlooked in considering the terms of the settlement
Can it be said in the circumstances that there has been a failure of justice which compels us to set aside the settlement as totally violative of fundamental rights Mukharji CJ 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 high lighted resulting in a higher settlement or no settlement at all
That feeling can be fully ventilated and that deficien cy can be adequately repaired it has been pointed out by Mukharji CJ in the hearing on the review petition pend ing before this Court
Though we are prima facie inclined to agree with him that there are good reasons why the settle ment should not be set aside on the ground that the princi ples of natural justice have been violated quite apart from the practical complications that may arise as the result of such an order we would not express any final opinion on the validity of the settlement but would leave it open to be agitated to the 728 extent permissible in law in the review petition pending before this Court
There is one more aspect which we may perhaps usefully refer to in this context
The scheme of the is that on the one hand the Union of India pursues the litigiation against the UCC and the UCIL on the other all the victims of the tragedy are expected to file their claims before the prescribed authority and have their claims for compensation determined by such authority
Certain infirmities were pointed out on behalf of the petitioners in the statutory provisions enacted in this regard
Our learned brother has dealt with these aspects and given appropriate directions to ensure that the claims will be gone into by a quasi judicial authority unfettered by executive prescriptions of the amounts of compensation by categorising the nature of in juries with an appeal to an officer who has judicial quali fications
In this manner the scheme under the provides for a proper determination of the compensation payable to the various claimants
Claims have already been filed and these are being scrutinised and processed
A correct picture as to whether the amount of compensation for which the claims have ben settled is meagre adequate or excessive will emerge only at that stage when all the claims have been processed and their aggregate is determined
In these cir cumstances we feel that no useful purpose will be served by a post decisional hearing on the quantum of compensation to be considered adequate for settlement
For these reasons it would seem more correct and proper not to disturb the orders of 14 15 February 1989 on the ground that the rules of natural justice have not been complied with particularly in view of the pendency of the review petition
Before we conclude we would like to add a few words on the state of the law of torts in this country
Before we gained independence on account of our close association with Great Britain we were governed by the common law principles
In the field of torts under the common law of England no action could be laid by the dependants or heirs of a person whose death was brought about by the tortious act of another on the maxim actio personalis moritur cum persona although a person injured by a similar act could claim damages for the wrong done to him
In England this situation was remedied by the passing of the Fatal Accidents Act 1846 popularly known as Lord Campell s Act
Soon thereafter the Indian Legislature enacted the Fatal acci dents Act 1855
This Act is fashioned on the lines of the English Act 729 of 1846
Even though the English Act has undergone a sub stantial change our law has remained static and seems a trifle archaic
The magnitude of the gas leak disaster in which hundreds lost their lives and thousands were maimed not to speak of the damage to livestock flora and fauna business and property is an eye opener
The nation must learn a lesson from this traumatic experience and evolve safeguards atleast for the future
We are of the view that the time is ripe to take a fresh look at the outdated cen tury old legislation which is out of tune with modern con cepts
While it may be a matter for scientists and technicians to find solutions to avoid such large scale disasters the law must provide an effective and speedy remedy to the victims of such torts
The Fatal Accidents Act on account of its limited and restrictive application is hardly suited to meet such a challenge
We are therefore of the opinion that the old antiquated Act should be drastically amended or fresh legislation should be enacted which should inter alia contain appropriate provisions in regard to the fol lowing matters i The payment of a fixed minimum compensa tion on a no fault liability basis as under the Motor Vehicles Act pending final adjudi cation of the claims by a prescribed forum ii The creation of a special forum with specific power to grant interim relief in appropriate cases iii The evolution of a procedure to be followed by such forum which will be conducive to the expeditious determination of claims and avoid the high degree of formalism that at taches to proceedings in regular courts and iv A provision requiring industries and concerns engaged in hazardous activities to take out compulsory insurance against third party risks
In addition to what we have said above we should like to say that the suggestion made by our learned brother KN Singh J for the creation of an Industrial Disaster Fund by whatever name called deserves serious consideration
We would also endorse his suggestion that the Central Govern ment will be well advised if in future it insists on certain safeguards before permitting a transnational company to do business in this country
The necessity of such safe guards atleast in the following two directions is high lighted in the present case 730 a Shri Garg has alleged that the processes in the Bhopal Gas Plant were so much shrouded in secrecy that neither the composition of the deadly gas that escaped nor the proper anti dote therefore were known to anyone in this country with the result that the steps taken to combat its effects were not only delayed but also totally inadequate and ineffective
It is necessary that this type of situation should be avoided
The Government should therefore insist when granting licence to a transnational company to establish its indus try here on a right to be informed of the nature of the processes involved so as to be able to take prompt action in the event of an accident
b We have seen how the victims in this case have been considerably handicapped on account of the fact that the immediate tort feasor was the subsidiary of a multi national with its Indian assets totally inadequate to satisfy the claims arising out of the disaster
It is therefore necessary to evolve either by international consensus or by unilateral legislation steps to overcome these handicaps and to ensure i that foreign corporations seeking to establish an industry here agree to submit to the jurisdiction of the Courts in India in respect of actions for tortious acts in this country ii that the liability of such a corporation is not limited to such of its assets or the assets of its affiliates as may be found in this country but that the victims are able to reach out to the assets of such concerns anywhere in the world iii that any decree obtained in Indian Courts in compliance with due process of law is capable of being executed against the foreign corpora tion its affiliates and their assets without further procedural hurdles in those other countries
Our brother KN Singh J has in this context dealt at some length with the United Nations Code of Conduct for multi national Corporations which awaits approval of various countries
We hope that calamities like the one which this country has suffered will serve as catalysts to expedite the acceptance of an international code on such matters in the near future
With these observations we agree with the order pro posed by the learned Chief Justice
GN Petitions dis posed of


Summary:
Respondent No 1 obtained a money decree against the original appellant who has been substituted by legal heirs on the basis of a promissory note
The appellant appealed to the High Court but could not get the decree stayed because he was unable to furnish security for the decretal amount
The decree was put into execution notwithstanding the pend ency of the appeal and two items of appellant s properties were purchased by respondent No 2 at the court sale
Later the High Court allowed the appellant s appeal on merits and set aside the decree
Thereupon the appellant moved the executing court for setting aside the court sale inter alia on the ground that 1 the sale was vitiated by material irregularities and properties were deliberately sold for under value 2 the sale was collusive between decree holder and the auction purchaser the latter being the sambandhi of the former was just a name lender and 3 since the decree had been reversed the sale should be nullified and restitution should be ordered
The executing court rejected these con tentions and held that subsequent reversal of the decree could not be depended upon since the sale had been confirmed in favour of the auction purchaser who was a stranger to the litigation
The learned Single Judge of the High Court however allowed the appellant s appeal and held inter alia that a the sale was vitiated by material irregularities resulting in fetching a low price and b the decree holder and auction purchaser were close relatives and the sale seemed to be collusive
But on appeal the Division Bench reversed the decision of the learned Single Judge
Allowing the appeal this Court HELD 1 A distinction is maintained between the decree holder who purchases the property in execution of his own decree which is 79 afterwards modified or reversed and an auction purchaser who is not party to the decree
84E 2 Where the purchaser is a decree holder he is bound to restore the property to the judgment debtor by way of restitution but not a stranger auction purchaser
The latter remains unaffected and does not lose title to the property by subsequent reversal or modification of the decree and could retain the property since he is a bona fide purchaser
This principle is also based on the premise that he is not bound to enquire into correctness of the judgment or decree sought to be executed
He is thus distinguished from an eonomine party to the litigation
84E F Janak Raj vs Gurdial Singh  and Sardar Govindrao Mahadik vs Devi Sahai   referred to
3 The true question in each case is whether the stranger auction purchaser had knowledge of the pending litigation about the decree under execution
If it is shown by evidence that he was aware of the pending appeal against the decree when he purchased the property it would be inappropriate to term him as a bona fide purchaser
Indeed he is evidently a speculative purchaser and in that respect he is in no better position than the decree holder purchas er
85B C Chhota Nagpur Banking Association vs CTM Smith 1943 Patna 325 and Jamnomal Gurdinomal vs Gopaldas AIR 1924 Sind 101 referred to
R Raghavachari vs MA Pekkiri Mahomed Rowther AIR 1917 Mad 250 overruled
4 Similarly the auction purchaser who was a name lender to the decree holder or who has colluded with the decree holder to purchase the property could not also be protected to retain the property if the decree is subse quently reversed
86B 5 The Code of Civil Procedure is a body of procedural law designed to facilitate justice and it should not be treated as an enactment providing for punishment and penal ties
The laws of procedure should be so construed as to render justice wherever reasonably possible
87A B Rodger vs The Comptoir De Paris 1869 71 LR 3 PC
465 at 475 80 and AR Antulay vs RS Nayak   referred to
6 The evidence on record is sufficient to hold that the auction purchaser was not a bona fide purchaser
The auction sale in his favour must therefore fall for resti tution
The Court cannot lend assistance for him to retain the property of the judgment debtor who has since succeeded in getting rid of the unjust decree
87D E