ivil Appeal No 1057 of 1987
From the Order dated 29121986 of the Customs Excise and Gold Control Appellate Tribunal New Delhi in Appeal No EDSB 7 A No 18682 BI in Order No 82686 BI
DN Mehta RC Misra and Dr Meera Agarwal for the Appellants
VC Mahajan and RP Srivastava for the Respondent
The Judgment of the Court was delivered by RANGANATHAN J
Item 26AAiv of the Central Excise Tariff reads as follows Pipes and tubes including blanks therefore all sorts whether rolled forged spun cast drawn annealed welded or extruded 62 The appellants are engaged in the manufacture of pipe fittings such as elbows bends and reducers
They purchase steel pipes on payment of excise duty prom indigenous pro ducers from the open market and they also get steel tubes by way of import
The appellants cut the pipes and tubes into different sizes give them shape and turn them into pipe fittings in their factories by heating in a furnace at a temperature between 66 degrees C and 900 degrees C hammer ing and pressing
The short question in this appeal is whether the pipe fittings so produced by the petitioners also fall under Item 26AAiv or whether they should be classified under tariff item 68 which is the residuary entry
The case of the appellants is that the products manufac tured by them are also nothing but pipes and tubes and that they are being virtually asked to pay duty twice over on the same product
According to them the processes undertaken by them do not amount to manufacture and no new product has come into existence as a result of the processes employed in their factories
They say that the pipes and tubes retain their material and original character and use and they can also be had only from dealers dealing in pipes and tubes
This claim of the appellants has not been accepted by the Central Customs Excise and Gold Appellate Tribunal and hence the present appeal under section 35Lb of the 
The question before us is whether the Department is right in claiming that the items in question are dutiable under tariff entry No 68 This as mentioned already is the residuary entry and only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry
In other words unless the department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items resort cannot be had to the residuary item
We do not think this has been done
Looking at Tariff item 26AAiv it encompasses all sorts of pipes and tubes
It is also clear that it is of no conse quence whether the pipes and tubes are manufactured by rolling forging spinning casting drawing annealing welding or extruding
It is true that initially pipes and tubes may be obtained from sheets billets or bars by var ious processes but the process of manufacture of pipes and tubes does not end there
In order to achieve fully the purpose for which the pipes and tubes are manufactured it is necessary to manufacture smaller pieces of pipes and tubes and also to manufacture them in such a shape that they may be able to conduct liquids and gases passing them through and across angles turnings 63 corners and curves or regulating their flow in the manner required
Smaller pieces of pipes and tubes differently shaped are manufactured for this purpose
They are merely intended as accessories or supplements to the larger pipes and tubes
They are pipes and tubes made out of pipes and tubes
There is no change in their basic physical properties and there is no change in their end use
There is no reason why these smaller articles cannot also be described as pipes and tubes
But it is said they are known in the market different ly as pipe fittings a totally different commercial commodi ty
The expression pipe fittings merely denotes that it is a pipe or tube of a particular length size or shape
Pipe fittings do not cease to be pipes and tubes they are only a species thereof
This aspect of the matter can be illus trated by the decision of this Court in Indian Aluminium Cables Ltd vs Union of India and others 1985 3 SCC 284
In that case the question was whether Properzi Rods manufactured and cleared by the assessee fell within Entry 27aii of the First Schedule to the  I of 1944
That entry read as follows Aluminium a wire bars wire rods and castings not otherwise speci fied
It was contended on behalf of the appellant inter alia that commercially Properzi Rods are not known as wire rods in the trade and that a person wanting to purchase Properzi Rods asks specifically for Properzi Rods and not for wire rods
Reliance was also placed on the view taken by this Court that words and expressions describing an article in a tariff schedule should be construed in the sense in which they are understood in the trade by the dealer and the consumer
The Court held that Properzi Rods were only a species of wire rods
It pointed out To sum up the true position the process of manufacture of a product and the end use to which it is put cannot neces sarily be determinative of the classification of that product under a fiscal schedule like the Central Excise Tariff
What is more important is whether the broad descrip tion of the article fits in with the expression used in the Tariff
The aluminium wire rods whether obtained by the extrusion process the conventional process or by Properzi process are still aluminium wire rods
The process of 64 manufacture is bound to undergo transformation with the advancement in science and technology
The name of the end product may by reason of new technological processes change but the basic nature and quality of the article may still answer the same description
On the basis of the material before us it is not possible to record a positive finding that Properzi Rods and wire rods are treated as distinct items in commercial parlance
Properzi Rod is a wire rod subjected to the Properzi process and is used for transmission of high voltage electric current
 The position is somewhat similar in the present case
As explained above the goods described in the tariff namely pipes and tubes are designed to meet various types of re quirements
Normally pipes and tubes are produced as long and straight pieces
But by themselves they cannot fulfil all the needs or the end use for which they are intended
To get the maximum use out of the pipes and tubes it is neces sary not only to produce long and straight pipes and tubes but also to turn out pipes and tubes of smaller dimensions and of different shapes and curves such as bends elbows T  pieces Y  pieces plugs caps flanges joints un ions collars and so on
This is done by a process of forg ing welding hammering and so on applied to the longer tubes but basically the items remain the same and the use also remains the same
The tariff entry calls for no dis tinction between pipes and tubes manufactured out of sheets rods bars plates or billets and those turned out from larger pipes and tubes
In these circumstances it is diffi cult to say that pipe fittings though they may have a distinctive name or badge of identification in the market are not pipes and tubes
It is true that all pipes and tubes cannot be described as pipe fittings
But it would not be correct to say that pipe fittings are not pipes and tubes
They are only a species of pipes and tubes
The use of the words all sorts and the reference to the various processes by which the excisable item could be manufactured set out in the tariff entry are comprehensive enough to sweep within their fold the goods presently under consideration
A certain amount of reliance has been placed on entries in the Harmonised Code as well as in the Customs Cooperative Council Nomenclature CCCN
We do not think that these entries and specifications are very helpful
The CCCN con tains a number of entries in Section XV namely heading Nos
7317 to 7320
While heading Nos
7317 to 7319 talk of pipes tubes and conduits heading No 7320 speaks of tube and pipe fittings for example joints elbows unions 65 and flanges of iron and steel
Section XVI also deals with some types of pipes and tubes
The position is similar under the Harmonised Code
In Section XV there is an equally meticulous sub division
Heading Nos
7302 to 06 deal with various types of pipes and tubes
Then comes heading No7307 which specifically talks of tube or pipe fittings for example couplings elbows sleeves of iron and steel including stainless steel and proceeds to set out various subdivisions of these items one of which is 730723  730793 butt welding fittings which is the item of manu facture in the present case
It is true that tubes and pipes and pipe fittings fall under different subitems under the above Codes where the two expressions are used in contrast and the sub classification is more detailed
That dichotomy cannot be imported into the present context where there is only one comprehensive and generic entry
We can not therefore derive any assistance from those entries
For the above reasons we are of the opinion that the view taken by the Tribunal is not correct and that the assessee s contention that the goods in question fall under item 26AAiv should be accepted
We therefore set aside the order of the Tribunal and direct the modification of the assessments accordingly
In the circumstances however we make no order as to costs
PSS Appeal allowed


Summary:
Union Carbide India Ltd UCIL is a subsidiary of Union Carbide Corporation UCC a New York Corporation
UCIL was incorporated in India in 1954
5099 of its share holding was with UCC and 22 of the shares were held by Life Insurance Corporation of India and Unit Trust of India
UCIL owned a chemical plant in Bhopal for the manufacture of pesticides using Methyl Isocyanate MIC a highly toxic gas
On the night between 2nd and 3rd December 1984 there was a massive escape of lethal gas from the MIC Storage tank at the Bhopal plant resulting in the tragic death of about 3000 people
Thousands of people suffered injuries
The environment also got polluted badly affecting the flora and the fauna
On behalf of the victims many suits were filed in various District Courts in the United States of America
All such suits were consolidated by the Judicial Panel on Multi District Litigation and were assigned to the US District Court Southern District of New York and Judge Keenan was the Presiding Judge throughout
Later the legal battle shifted to Indian Courts as it could not proceed in the US Courts on the ground of forum non conveniens
599 Meanwhile the Bhopal Gas Leak Disaster Processing of claims 1985 was passed by the Government of India with a view to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with speedily effectively and equitably
Union of India filed a suit for damages in the District Court of Bhopal on 5986
However there were negotiations for a settlement hut ultimately the settlement talks had failed
On 17121987 the District Judge ordered interim relief of Rs350 crores
On appeal the High Court on 4488 modified the order of the District Judge and ordered an interim relief of Rs250 crores
Aggrieved the UCC as also the Union of India filed petitions for special leave before this Court
Leave was granted
By its orders dated 14289 and 15289 this Court on the basis of a settlement arrived at between the parties directed UCC to pay a sum of 470 million US Dollars to the Union of India in full settlement of all claims rights and liabilities related to and arising out of the Bhopal gas disaster
The said orders were passed keeping in view the Bhopal Gas Disaster Processing of claims Act 1985
The present Writ Petitions challenge the constitutional validity of the said Act inter alia on the grounds that the Act is violative of the fundamental rights guaranteed under Articles 14 19 and 21 of the Constitution that the Act is violative of the Principles of Natural Justice mainly on the ground that Union of India being a joint tort feasor in that it has permitted establishment of such factories with out necessary safeguards has no locus standi to compromise on behalf of the victims that the victims and their legal heirs were not given the opportunity of being heard before the Act was passed that in the guise of giving aid the State could not destroy the rights inherent in its citizens nor could it demand the citizens to surrender their rights to the State that vesting of the rights in Central Govern ment was bad and unreasonable because there was conflict of interest between the Central Government and the victims
since the Central Government owned 22 share in UCIL and that would make the Central Government a Judge in its own cause
Disposing of the Writ Petitions this Court 600 HELD Sabyasachi Mukharji CJ and KN Saikia J Per C J 11 The Act is constitutionally valid
It proceeds on the hypothesis that until the claims of the victims are realised or obtained from the delinquents namely UCC and UCIL by settlement or by adjudication and until the proceed ings in respect thereof continue the Central Government must pay interim compensation or maintenance for the vic tims
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 the present case no useful purpose would be served by giving a post decision al hearing having regard to the circumstances mentioned in the order of this Court dated 4th May 1989 and having regard to the fact that there are no further additional data and facts available with the victims which can be profitably and meaningfully presented to controvert the basis of the settlement and further having regard to the fact that the victims had their say or on their behalf their views had been agitated in these proceedings and will have further opportunity in the pending review proceedings
703E H 704A 12 Though settlement without notice is not quite prop er on the materials so far available it is seen that Justice has been done to the victims but justice has not appeared to have been done
In view of the magnitude of the misery involved and the problems in this case the setting aside of the settlement on this ground in view of the facts and the circumstances of this case keeping the settlement in abeyance and giving notice to the victims for a post 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
Justice is a psychological yearning in which men seek acceptance of their view point by having an opportunity of vindication before the forum or the authority enjoined or obliged to take a decision affecting their right
Yet in the particular situations one has to bear in mind how an in fraction of that should be sought to be removed in accord ance with justice To do a great right after all
it is permissible sometimes to do a little wrong
In the facts and circumstances of the case this is one of those rare occasions
701G H 702A C 21 The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed
It has to be borne in mind that if so 601 judged it passed the test of reasonableness then the possi bility of the power conferred being improperly used is no ground for pronouncing the law itself invalid
659E G 22 Conceptually and from the jurisprudential point of view especially in the background of the Preamble to the Constitution of India and the mandate of the Directive Principles it was possible to authorise the Central Govern ment to take over the claims of the Victims to fight against the multinational corporation in respect of the claims
Because of the situation the victims were under disability in pursuing their claims in the circumstances of the situa tion fully and properly
But there is no prohibition or inhibition for Indian State taking over the claims of the victims or for the State acting for the victims as the Act has sought to provide
640E H 23 The Act does provide a special procedure in respect of rights of the victims and to that extent the Central Govt
takes upon itself the rights of the victims
It is a special Act providing a special procedure for a kind of special class of victims
In view of the enormity of the disaster the victims of the Bhopal gas leak disaster as they were placed against the multi national and a big Indian Corporation and in view of the presence of foreign 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 identifiable 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 disaster situated as the victims were against a mighty multinational with the presence of foreign contingency lawyers looming on the scene there were sufficient grounds for such differentia tion and different treatment
In treating the victims of the gas leak disaster differently and providing them a proce dure which was just fair reasonable and which was not unwarranted or unauthorised by the Constitution Article 14 is not breached
683E H 684A B Collector of Customs Madras vs Nathella Sampathu Chet ty   PJ Irani vs State of Madras  DK Trivedi vs State of Gujarat 1986 Suppl
SCC 20 relied on
Ballast Corporation vs OD Commission  referred to 602 31 The present case is one where the Govt
of India only represented the victims as a party  and did not adjudi cate between the victims and the UCC
It is the court which would adjudicate the rights of the victims
The representa tion of the victims by the Government of India cannot be held to be bad and there is and there was no scope of violation of any principle of natural justice
670B 32 The connotation of the term parens patria differs from country to country for instance in England it is the King in America it is the people etc
According to Indian concept parens patria doctrine recognised King as the pro tector of all citizens as parent
The Government is within its duty to protect and to control persons under disability
Conceptually the parens patriae theory is the obligation of the State to protect and take into custody the rights and privileges of its citizens for discharging its obligations
Our Constitution makes it imperative for the State to secure to all its citizens the rights guaranteed by the Constitu tion and where the citizens are not in a position to assert and secure their rights the State must come into picture and protect and fight for the right of the citizens
The Preamble to the Constitution read with the Directive Prin ciples contained in Articles 38 39 and 39A enjoins the State to take up these responsibilities
It is the protec tive measure to which the social welfare state is committed
It is necessary for the State to ensure the fundamental rights in conjunction with the Directive Principles of State Policy to effectively discharge its obligation and for this purpose if necessary to deprive some rights and privileges of the individual victims or their heirs to protect their rights better and secure these further
638E H 639A 33 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 juris diction or on principles analogous thereto
After having statutorily armed itself in recognition of such parens patriae right or on principles analogous thereto it went to the American Courts
No other person was properly designed for representing the victims as a foreign court had to recognise a right of representation
The Govt
of India was permitted to represent was permitted to represent the vic tims before the American courts
Private plaintiffs were also represented by their attorneys
The order of Judge Keenan permitted the Govt
of India to represent the vic tims
If there was any remote conflict of interests between the Union of India and the victims from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice that no man should be Judge in his own case
669C F 603 34 The Act in question has been passed in recognition of the right of the sovereign to act as parens patriae
The Government of India in order to effectively safeguard the rights of the victims in the matter of the conduct of the case was entitled to act as parens patriae which position was reinforced by the statutory provisions namely the Act
It has to be borne in mind that conceptually and jurispru dentially the doctrine of parens patriae is not limited to representation of some of the victims outside the territo ries of the country
It is true that the doctrine has been so utilised in America so far
Where citizens of a country are victims of a tragedy because of the negligence of any multinational in peculiar situation arises which calls for suitable effective machinery to articulate and effectuate the grievance and demands of the victims for which the conventional adversary system would be totally inadequate
The State in discharge of its sovereign obligation must come forward
The Indian State because of its constitutional commitment is obliged to take upon itself the claim of the victims and to protect them in their hour of need
658B F 35 There is no bar on the State to assume responsibili ties analogous to parens patriae to discharge the State s obligations under the Constitution
What the Central Govern ment has done in the instant case seems to be an expression of its sovereign power
This power is plenary and inherent in every sovereign state to do all things which promote the health peace moral education and good order of the people and tend to increase the wealth and prosperity of the State
Sovereignty is difficult to define
By the nature of things the State Sovereignty in these matters cannot be limited
It has to be adjusted to the conditions touching the common welfare when covered by legislative enactments
This power is to the public what the law of necessity is to the indi vidual
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 constitu tional limitations
This is an emanation of sovereignty and it is the obligation of the State to assume such responsi bilities and protect its citizens
658G H 659A C 36 In the instant case the victims cannot be consid ered to be any match to the multinational companies or the Government with whom in the conditions that the victims or their representatives were after the disaster physically mentally financially economically and also because of the position of litigation would have to contend
In such a situation of 604 predicament the victims can legitimately be considered to be disabled
They were in no position by themselves to look after their own interest effectively or purposefully
In that background they are people who needed the State s protection and should come within the umbrella of State s sovereignty to assert establish and maintain their rights against the wrong doers in this mass disaster
In that perspective it is jurisprudentially possible to apply the principle of parens patriae doctrine to the victims
But quite apart from that it has to be borne in mind that in this case the State is acting on the basis of the Statute itself
For the authority of the Central Government to sue for and on behalf of or instead in place of the victims no other theory concept or any jurisprudential principle is required than the Act itself
The Act empowers and substi tutes the Central Government
The victims have been divested of their rights to sue and such claims and such rights have been vested in the Central Government
The victims have been divested because the victims were disabled
The disablement of the victims vis a vis their adversaries in this matter is a self evident factor
Even if the strict application of the parens patriae  doctrine is not in order as a concept it is a guide
The jurisdiction of the State s power cannot be circumscribed by the limitations of the traditional concept of parens patriae
Jurisprudentially it could be utilised to suit or alter or adapt itself to the changed circumstances
In the situation in which the victims were the State had to assume the role of a parent protecting the rights of the victims who must come within the protective umbrella of the State and the common sovereignty of the Indian people
The act is an exercise of the sovereign power of the State
It is an appropriate evolution of the expression of sovereignty in the situation that had arisen
It has to be accepted as such
685C H 37 The concept of parens patriae can be varied to enable the Government to represent the victims effectively in domestic forum if the situation so warrants
There is no reason to confine the parens patriae  doctrine to only quasi sovereign right of the State independent of and behind the title of the citizen
692B C 38 The power to compromise and to conduct the proceed ings are not uncanalised or arbitrary
These were clearly exercisable only in the ultimate interests of the victims
The possibility of abuse of a statute does not impart to it any element of invalidity
659C D EP Royappa vs State of Tamil Nadu   Menaka Gandhi vs Union of India 1978 2 SCR 621 RD Shetty vs International Airport Authority of India  followed
605 Ram Saroop vs SP Sahi relied on
Budhkaran Chankhani vs Thakur Prasad Shah AIR  Banku Behari Mondal vs Banku Behari Hazra AIR 1943 Cal 203 Medai Dalavoi T Kumaraswamy Mudaliar vs Medai Dalavoi Rajammal AIR 1957 Mad
563 approved
State of UP vs Poosu  KM Nanavati vs State of Bombay   Ram Gopal Sarubai vs Smt
Sarubhai  Ors  India Mica  Mican ite Industries Ltd vs State of Bihar  Ors  Alfred L Snapp  SonInc
vs Puerto Rico  73 Ed
2d 995 102 section ct
3260 State of Georgia vs Tennessee Copper Co   27 section et
618 re ferred to
BK Mukherjea on Hindu Religious and Charitable Trusts Tagore Law Lectures 5th Edn
p 404 Words  Phrases permanent Edn
33 p 99 Black s Law Dictionary 5th Edn 1979 p 1003 Weaver s Constitutional Law p 490 American Consti tutional Law by Lawrence H Tribe 1978 Edn para 324 referred to
41 Section 3 provides for the substitution of the Central Government with the right to represent and act in place of whether within or outside India every person who has made or is entitled to make a claim in respect of the disaster
The State has taken over the rights and claims of the victims in the exercise of sovereignty in order to discharge the constitutional obligations as the parent and guardian of the victims who in the situation as placed needed the umbrella of protection
Thus the State has the power and jurisdiction and for this purpose unless the Act is otherwise unreasonable or violative of the constitutional provisions no question of giving a hearing to the parties for taking over these rights by the State arises
For legis lation by the Parliament no principle of natural justice is attracted provided such legislation is within the competence of the legislature
Indeed the present Act is within the competence of the Parliament
Section 3 makes the Central Government the dominoes litis and it has the carriage of the proceedings but that does not solve the problem of by what procedure the proceedings should be carried
692A D 42 Section 4 means and entails that before entering into any settlement affecting the rights and claims of the victims some kind of notice or information should be given to the victims
699D 606 43 Sections 3 and 4 are categorical and clear
When the expression is explicit the expression is conclusive alike in what it says and in what it does not say
These give the Central Government an exclusive right to act in place of the persons who are entitled to make claim or have already made claim
The expression exclusive  is explicit and signifi cant
The exclusively cannot be wittled down or watered down
The said expression must be given its full meaning and extent
This is corroborated by the use of the expression claim  for all purposes
If such duality of rights are given to
the Central Government alongwith the victims in instituting or proceeding for the realisation or the en forcement of the claims arising out of Bhopal gas leak disaster then that would be so cumbersome that it would not be speedy effective or equitable and would not be the best or more advantageous procedure for securing the claims arising out of the leakage
683A C 44 Sections 3 and 4 of the Act should be read together alongwith 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 vic tims of the disaster are fully protected and the claims of compensation or damages for loss of life or personal in juries or in respect of other matters arising out of or connected with the disaster are processed speedily effec tively equitably and to the best advantage of the claim ants
Section 3 of the Act is subject to other provisions of the Act which includes Sections 4 and 11
Section 4 of the Act opens with non obstante clause vis a vis section 3 and therefore overrides section 3
659G H 660A B 45 In the instant case the Government of India is only capable to represent the victims as a party
The adjudica tion of the claims would be done by the Court
The doctrine of Bona fide Representation  as also defacto validity  are not applicable to the present case
690F Basheshar vs Income Tax Commissioner   In re Special Courts Bill  AR Antulay vs RS Nayak  Anr   Ram Krishna Dalmia vs Ten dulkar  Ambika Prasad Mishra vs State of UP  Ors
  Bodhan Chowdhary vs State of Bihar   Lakshmi Kant Pandey vs Union of India   Ms Mackinnon Mackenzie  Co Ltd vs Audrey D  Costa and Anr 1987 2 SCC 469 Sheela Barse vs Secretary Children Aid Society  Ors
   Gokaraju Rangaraju vs State of AP   Pushpadevi M Jatia vs ML Wadhwan   607 Ms Beopar Sahayak P Ltd  Ors
vs Vishwanath  Ors 1987 3 SCC 693 Dharampal Singh vs Director of Small Industries Services  Ors AIR 1980 SC 1888 NK Mohammed Sulaiman vs NC Mohammed lsmail  Ors   Malkariun Bin Shidrammappa Pasare vs Narhari Bin Shivappa  Anr 271 A 216 referred to
Black s Law Dictionary 5th Edn
p 437 referred to
The restrictions or limitations on the substantive and procedural rights in the Act will have to be judged from the point of view of the particular Statute in question
No abstract rule or standard of reasonableness can be applied
That question has to be judged having regard to the nature of the rights alleged to have been infringed in this case the extent and urgency of the evil sought to be remedied disproportionate imposition prevailing conditions at the time all these facts will have to be taken into considera tion
Having considered the background the plight of the impoverished the urgency of the victims  need the presence of the foreign contingency lawyers the procedure of settle ment in USA in mass action the strength of the foreign multinationals the nature of injuries and damages and the limited but significant right of participation of the vic tims as contemplated by section 4 of the Act the Act cannot be condemned as unreasonable
684C E State of Madras vs VG Row   referred to
61 In view of the principles settled by this Court and accepted all over the world in a case of this magnitude and nature when the victims have been given some say by Section 4 of the Act in order to make that opportunity contemplated by section 4 of the Act meaningful and effective it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any conclusion in respect of any settlement
How that opportuni ty should be given would depend upon the particular situa tion
Fair procedure should be followed in a representative mass tort action
696E F 62 One assumption under which the Act is justified is that the victims were disabled to defend themselves in an action of this type
If that is so then the Court cannot presume that the victims were a lot capable and informed to be able to have comprehended or contemplated the settlement
In the aforesaid view of the matter notice was necessary
The victims at large did not have the notice
The Central Government as the representative of the victims must have the views of the victims and place such view before the court in such manner it considers neces 608 sary before a settlement is entered into
If the victims want to advert to certain aspect of the matter during the proceedings under the Act and settlement indeed is an impor tant stage in the proceedings opportunities must be given to the victims
Individual notices may not be necessary
The Court can and should in such situation formulate modalities of giving notice and public notice can also be given invit ing views of the victims by tile help of mass media
Howev er it is not necessary that such views would require the consent of all the victims
698B C 698G H 699A 63 One of the important requirements of justice is that people affected by an action or inaction should have oppor tunity to have their say
That opportunity the victims have got when these applications were heard and they were heard after utmost publicity and they would have further opportu nity when review application against the settlement would be heard
1700G H 701A 71 The Act does not expressly exclude the application of the Code of Civil Procedure
Section 11 of the Act pro vides the overriding effect indicating that anything incon sistent with the provisions of the Act or in other laws including the Civil Procedure Code should be ignored and the Act should prevail
Strictly speaking Order 1 Rule 8 will not apply to a suit or a proceeding under the Act
It is not a case of one having common interest with others
Here the plaintiff the Central Government has replaced and divested the victims
1696H 697A B 72 In the instant case there is no question of aban donment as such of the suit or part of the suit the provi sions of order XXIII Rule 1 would also not strictly apply
However Order XXIH Rule 3B of the Code is an important and significant pointer and the principles behind the said provision would apply to this case
The said rule 3B pro vides that no agreement of compromise in a representative suit shall be entered into without the leave of the Court expressly recorded in the proceedings and sub rule 2 of rule 3B enjoins that before granting such leave the court shall give notice in such manner as it may think fit in a representative action
Representative suit has been defined under Explanation to the said rule vide clause d as any other suit in which the decree passed may by virtue of the provisions this Code or of any other law for the time being in force bind any person who is not named as party to the suit
Indubitably the victims would be bound by the Settle ment though not named in the suit
11his is a position conceded by all
If that is so it would be a representative suit in terms of and for the purpose of Rule 315 of Order XXIII of the Code
If the principles of this rule are the principles of natural justice then we are of the opinion that 609 the principles behind it would be applicable and also that section 4 of the Act should be so construed in spite of the difficulties of the process of notice and other difficulties of making informed decision making process cumbersome
697C G 73 In as much as section 4 of the Act had given a qualified right of participation to the victims there cannot be any question of violation of the principles of natural justice
The scope of the application of the princi ples of natural justice cannot be judged by any strait jacket formula
662G H R Viswanathan vs Rukn ul Mulk Syed Abdul Wajid   M Narayanan Nambiar vs State of Kerala 1963 Supp
2 724 Chintaharan Ghose  Ors
vs Gujaraddi Sheik  Ors AIR 1951 Cal 456 Ram Sarup vs Nanak Ram AIR 1952 All
275 referred to
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 Government
Therefore the Act proceeded on the assumption that the Government could be a claimant being a person as such
690A B 91 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
693D E 92 Rules of natural justice are not embodied rules
Hence it was not possible to make an exhaustive catalogue of such rules
Audi alteram partem is a highly effective rule devised by the Courts to ensure that a statutory au thority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power
The rules of natural justice can operate only in areas not covered by any law validly made
The general principle as distinguished from an absolute rule of uniform application is that where a statute does not in terms exclude the rule of prior hearing but contemplates a post decisional hearing 610 amounting to a full review of the original order on merits then such a statute would be construed as excluding the audi alteram partem rule at the pre decisional stage
If the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected the administrative decision after post decisional hearing was good
694A D 93 In the instant case no question of violation of the principle of natural justice arises and there is no scope for the application of the principle that no man should be a Judge in his own cause
The Central Government was not judging any claim but was fighting and advancing the claims of the victims
The adjudication would be done by the courts and therefore there is no scope of the violation of any principle of natural justice
688G H 689A B Menaka Gandhi vs Union of India 1978 2 SCR 621 Olga Tellis vs Bombay Municipal Corporation 1985 Supp 2 SCR 51 Union of India vs Tulsi Ram Patel 1985 Supp 2 SCR 131 Swadeshi Cotton Mills vs Union of India   relied on
Ganga Bai vs Vijay Kumar   SL Kapoor vs Jagmohan  Sangram vs Election Commis sion   referred to
Though not expressly stated the Act proceeds on the major inarticulate premise 
It is on this promise or premise that the State would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the victims on their own
If it is only so read it can only be held to be constitutionally valid
It has to be borne in mind that the language of the Act does not militate against this construc tion but on the Contrary
Sections 9 10 and the scheme of the Act suggest that the Act contains such an obligation
If it is so read then only meat can be put into the skeleton of the Act making it meaningful and purposeful
The Act must therefore be so read
This approach to the interpre tation of the Act can legitimately be called the construc tive intuition  which is a permissible mode of viewing the Acts of Parliament
The freedom to search for the spirit of the Act  or the quantity of the mischief at which it is aimed both synonymous for the intention of the parliament opens up the possibility of liberal interpretation that delicate and important branch of judicial power the conces sion of which is dangerous the denial ruinous
Given this freedom it is a rare opportunity though never to be misused and challenge for the Judges to adopt and give meaning to 611 the act articulate and inarticulate and thus translate the intention of the Parliament and fulfil the object of the Act
After all the Act was passed to give relief to the victims who it was thought were unable to establish their own rights and fight for themselves
687E H 688A 111 The circumstances that financial institutions held shares in the UCIL would not disqualify the Government of India from acting as parens patriae and in discharging its statutory duties under the Act
The suit was filed only against the UCC and not against UCIL
On the basis of the claim made by the Government of India UCIL was not a neces sary party
It was suing only the multinational based on several legal grounds of liability of the UCC inter alia on the basis of enterprise liability
If the Government of India had instituted a suit against UCIL to a certain extent it would have weakened its case against UCC in view of the judgment of this Court in MC Mehta s case
668H 669A B MC Mehta vs Union of India   referred to
112 Even if there was any remote conflict of interests between the Union of India and the victims on account of the sharesholding doctrine of necessity would override the possible violation of the principles of natural justice
669F Kasturilal Ralia Ram Jain vs State of UP   State of Rajasthan vs Vidyawati 1962 2 Supp
SCR 989 J Mohapatra  Co  Anr
vs State of Orissa  Anr
   referred to
Halsbury s Laws of England Vol 1 4th Edn
para 73 Smith s Judicial Review of Administrative Action 4th Edn
276 277 Natural Justice by GA Flick 1979 Edn pp 138 141 referred to
The Act does not create new causes of action or create special courts
The jurisdiction of the civil court to entertain suit would still arise out of section 9 of the CPC and the substantive cause of action and the nature of the reliefs available would also continue to remain un changed
The only difference produced by the provisions of the Act would be that instead of the suit being filed by the victims themselves the suit would be filed by the Central Government on their behalf
655F 13
Normally in measuring civil liability the law has attached more importance to the principle of compensation than that of punishment
Penal redress however involves both compensation to the 612 person injured and punishment as deterrence
The Act as such does not abridge or curtail damage or liability whatev er that might be
So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained
680G H 681A F Roshanlal Kuthiala  Ors
vs RB Mohan Singh Oberoi   Nandram Heeralal vs Union of India  Anr AIR 1978 MP 209 Ryland vs Flatcher 1868 Vol 3 LR E I Appeal Cases 330 Rookes vs Barnard   re ferred to
Salmond s Law of Torts 15th Edn
p 30 referred to
The Act in question does not purport to deal with the criminal liability if any of the parties or persons concerned nor it deals with any of the consequences flowing from those
This position is clear from the provisions and the preamble to the Act
636F 15
The major inarticulate premise apparent from the Act and the scheme and the spirit of the Act is that so long as the rights of the victims are prosecuted the state must protect the victims
Otherwise the object of the Act would be defeated its purpose frustrated
Therefore continuance of the payments of the interim maintenance for the continued sustenance of the victims is an obligation arising out of State s assumption of the power and temporary deprivation of the rights of the victims and divestiture of the right of the victims to fight for their own rights
This is the only reasonable interpretation which is just fair and proper
686B C 16
The promises made to the victims and hopes raised in their hearts and minds can only be redeemed in some measure if attempts are made vigorously to distribute the amount realised to the victims in accordance with the scheme
That would be redemption to a certain extent
The law relating to damages and payment of interim damages or compensation to the victims of this nature should be seriously and scientif ically examined by the appropriate agencies
704F H 705A 17
The Bhopal Gas Leak disaster and its aftermath emphasise the need for laying down certain norms and stand ards that the Government may follow before granting permis sion 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 exam ined by an expert committee as to what should be the condi tions on 613 which future licences andor permission for running indus tries on Indian soil would be granted and for ensuring enforcement of those conditions sufficient safety measures should be formulated and scheme of enforcement indicated
The Government should insist as a condition precedent to the grant of such licences or permission creation of a fund in anticipation by the industries to be available for payment of damages out of the said fund in case of leakages or damages in case of accident or disaster flowing from 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 Fund by procedure separate ly evolved for computation and payment of damages without exposing the victims or sufferers of the negligent act to the long and delayed procedure
Special procedure must be provided for and the industries must agree as a condition for the grant of licence to abide by such procedure or to abide by statutory arbitration
The basis for damages in case of leakages and accident should also be statutorily fixed taking into consideration the nature of damages in flicted the consequences thereof and the ability and capac ity of the parties to pay
Such should also provide for deterrant or punitive damages the basis for which should be formulated by a proper expert committee or by the 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
705B F 18
That people are born free the dignity of the per sons must be recognised and competent tribunal is one of the surest methods of effective remedy
If therefore as a result of this tragedy new consciousness and awareness on the part of the people of this country to be more vigilant about measures and the necessity of ensuring more strict vigilance for permitting the operations of such dangerous and poisonous gases dawn then perhaps the tragic experience of Bhopal would not go in vain
682D E Per Singh J concurring 11 In India the need for industrial development has led to the establishment of a number of plants and factories by the domestic companies and under takings as well as by Transnational Corporations
Many of these industries are engaged in hazardous or inherently dangerous activities which pose potential threat to life health and safety of persons working in the factory or residing in the surround ing areas
Though working of such factories and plants is regulated by a 614 number of laws of our country there is no special legisla tion providing for compensation and damages to outsiders who may suffer on account of any industrial accident
As the law stands today affected persons have to approach civil courts for obtaining compensation and damages
In civil courts the determination of amount of compensation or damages as well the liability of the enterprise has been bound by the shack les of conservative principles
707D G 12 The principles laid down in Ryland vs Fletcher made it difficult to obtain adequate damages from the enterprise and that too only after the negligence of enterprise was proved
707G H 13 The law laid down in Oleum Gas Leak case made a land mark departure from the conservative principles with regard to the liability of an enterprise carrying on hazard ous or inherently dangerous activities
709C 14 In the instant case there is no scope for any doubt regarding the liability of the UCC for the damage caused to the human beings and nature in and around Bhopal
709E Ryland vs Fletcher   MC Mehta vs Union of India   referred to 2
In the context of our national dimensions of human rights right to life liberty pollution free air and water is guaranteed by the Constitution under Articles 21 48A and 51g it is the duty of the State to take effective steps to protect the constitutional rights guaranteed
These rights must be integrated and illumined by evolving interna tional dimensions and standards having regard to our sover eignty as highlighted by Clauses 9 and 13 of UN Code of Conduct on Transnational Corporations
Such a law may pro vide for conditions for granting licence to Transnational Corporations prescribing norms and standards for running industries on Indian soil ensuring the above said constitu tional rights of our people
A Transnational Corporation should be made liable and subservient to laws of our country and the liability should not be restricted to affiliate company only but the parent corporations should also be made liable for any damage caused to the human beings or ecology
The law must require transnational Corporations to agree to pay such damages as may be determined by the statutory agencies and forum constituted under it without exposing the victims to long drawn litigation
In order to meet the situation to avoid delay and to ensure immediate relief to the victims the law should 615 provide for constitution of tribunals regulated by special procedure for determining compensation to victims of indus trial disaster or accident appeal against which may lie to this Court on the limited ground of questions of law only after depositing the amount determined by the Tribunal
The law should also provide for interim relief to victims during the pendency of proceedings
These steps would minimise the misery and agony of victims of hazardous enterprises
710H 711A F 3
Industrial development in our country and the hazards involved therein pose a mandatory need to constitute a statutory Industrial Disaster Fund contributions to which may be made by the Government the industries whether they are transnational corporations or domestic undertakings public or private
The extent of contribution may be worked out having regard to the extent of hazardous nature of the enterprise and other allied matters
The fund should be permanent in nature
so that money is readily available for providing immediate effective relief to the victims
711 G H 712A Ranganathan and Ahmadi J J Per Ranganathan J Concur ring
The provisions of the Act read by themselves guar antee a complete and full protection to the rights of the claimants in every respect
Save only that they cannot file a suit themselves their right to acquire redress has not really been abridged by the provisions of the Act
Sections 3 and 4 of the Act completely vindicate the objects and reasons which compelled Parliament to enact this piece of legislation
Far from abridging the rights of the claimants in any manner these provisions are so worded as to enable the Government to prosecute the litigation with the maximum amount of resources efficiency and competence at its com mand
as well as with all the assistance and help that can be extended to it by such of those litigants and claimants as are capable of playing more than a mere passive role in the litigation
720G H 721A B 2
Even if the provisions of section 3 had been scrupulously observed and the names of all parties other than the Cen tral Government had been got deleted from the array of parties in the suits and proceedings pending in this coun try the result would not have been fatal to the interests of the litigants
On the contrary it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising their rights against the Union Carbide Corporation
Such representation can well be justified by resort to a principle analogous to if not precisely the same as that of parens 616 patriae
A victim of the tragedy is compelled to part with a valuable right of his in order that it might be more efficiently and satisfactorily exploited for his benefit than he himself is capable of
It is of course possible that there may be an affluent claimant or lawyer engaged by him who may be capable of fighting the litigation better
It is possible that the Government of India as a litigant may or may not be able to pursue the litigation with as much deter mination or capability as such a litigant
But in a case of the present type one should not be confounded by such a possibility
There are more indigent litigants than affluent ones
There are more illiterates than enlightened ones
There are very few of the claimants capable of finding the financial wherewithal required for fighting the litigation
Very few of them are capable or prosecuting such a litiga tion in this country not to speak of the necessity to run to a foreign country
The financial position of UCIL was negli gible compared to the magnitude of the claim that could arise and though eventually the battle had to be pitched on our own soil an initial as well as final recourse to legal proceedings in the United States was very much on the cards indeed inevitable
In this situation the legislature was perfectly justified in coming to the aid of the victims with this piece of legislation and in asking the Central Govern ment to shoulder the responsibility by substituting itself in place of the victims for all purposes connected with the claims
716C H 717A 3
Section 4 adequately safeguards the interest of individual victims
It enables each one of them to bring to the notice of the Union any special features or circum stances which he would like to urge in respect of any matter and if any such features are brought to its notice the Union is obliged to take it into account
The individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the proceedings
If the suits in this case had proceeded in the normal course either to the stage of a decree or even to one of settlement the claimants could have kept themselves abreast of the developments and the statutory provisions would have been more than adequate to ensure that the points of view of all the victims are presented to the court
Even a settlement or compromise could not have been arrived at without the court being apprised of the views of any of them who chose to do so
The statute has provided that though the Union of India will be the dominus litis in the suit the interest of all the victims and their claims should be safeguarded by giving them a voice in the proceedings to the extent indicated above
This provision of the statute is an adaptation of the principle of Order 1 Rule 8 and of order XXIII Rule 38 of the Code of Civil Procedure in its application to the suits governed by it and though the extent of participation al lowed to 617 the victims is somewhat differently enunciated in the legis lation substantially speaking it does incorporate the principles of natural justice to the extent possible in the circumstances
The statute cannot therefore be faulted on the ground that it denies the victims an opportunity to present their views or places them at any disadvantage in the matter of having an effective voice in settling the suit by way of compromise
724G H 725A D 4
Sections 3 and 4 combine together the interest of the weak illiterate helpless and poor victims as well as the interest of those who could have managed for themselves even without the help of this enactment
The combination thus envisaged enables the Government to fight the battle with the foreign adversary with the full aid and assistance of such of the victims or their legal advisers as are in a position to offer any such assistance
Though section 3 denies the climants the benefit of being eo nominee parties in such suits or proceedings section 4 preserves to them substantially all that they can achieve by proceeding on their own
In other words while seeming to deprive the claimants of their right to take legal action on their own it has preserved those rights to be exercised indirectly
A conjoint reading of sections 3 and 4 would show that there has been no real total deprivation of the right of the claimants to enforce their claim for damage in appropriate proceedings before any appropriate forum
There is only a restriction of this right which in the circumstances is totally reasonable and justified
718D G  5
It is not possible to bring the suits brought under the Act within the categories of representative action envisaged in the Code of Civil Procedure
The Act deals with a class of action which is sui generis and for which a special formula has been found and encapsuled in section 4
The Act divests the individual claimants of their right to sue and vests it in the Union
In relation to the suit in India the Union is the sole Plaintiff
none of the others are envisaged as plaintiffs or respondents
The victims of the tragedy were so numerous that they were never defined at the stage of filing the plaint nor do they need to be defined at the stage of settlement
The litigation is carried on by the State in its capacity not exactly the same as but somewhat analogous to that of parens patriae
In the case of a litigation by a Karta of a Hindu undivided family or by a guardian on behalf of a ward who is non sui juris the junior members of the family or the wards are not to be consulted before entering into a settlement
In such cases court acts as guardian of such persons to scrutinise the settlement and satisfy itself that it is in the best inter est of all concerned
If it is later discovered that there has been any fraud or collusion it may be open to the junior members of the 618 family or the wards to call the Karta or guardian to account but barring such a contingency the settlement would be effective and binding
In the same way the Union as parens patriae  would have been at liberty to enter into such settlement as it considered best on its own and seek the Court s approval therefore
723G H 724A D 6
It is common knowledge that any authority given to conduct a litigation cannot be effective unless it is accom panied by an authority to withdraw or settle the same if the circumstances call for it
The vagaries of a litigation of this magnitude and intricacy could not be fully anticipated
There were possibilities that the litigation may have to be fought out to the bitter finish
There were possibilities that the UCC might be willing to adequately compensate the victims either on their own or at the insistence of the Government concerned
There was also the possibility which had already been in evidence before Judge Keenan that the proceedings might ultimately have to end in negotiated settlement
In most of the mass disaster cases reported proceedings finally end in a compromise if only to avoid an indefinite prolongation of the agonies caused by such liti gation
The legislation therefore cannot be considered to be unreasonable merely because in addition to the right to institute a suit or other proceedings it also empowers the Government to withdraw the proceedings or enter into a compromise
719B E MC Mehta vs Union of India   referred to
The Act has provided an adequate opportunity to the victims to speak out and if they or the counsel engaged by some of them in the trial court had kept in touch with the proceedings in this court they could have most certainly made themselves heard
If a feeling has gained ground that their voice has not been fully heard the fault was not with the statute but was rather due to the development leading to the finalisation of the settlement when the appeal against the interim order was being heard in this Court
726B D 8
In the field of torts under the common law of Eng land no action could be laid by the dependants or heirs of a person whose death was brought about by the tortious act of another on the maxim actio personalis maritur cum persona although a person injured by a similar act could claim damages for the wrong done to him
In England this situation was remedied by the passing of Fatal Accidents Act 1846 popularly known as Lord Compbell s Act
Thereafter the Indian Legislature enacted the 
This Act is fashioned on the 619 lines of the English Act of 1840
Even though the English Act has undergone a substantial change our law has remained static and seems a trifle archaic
The magnitude of the gas leak disaster in which hundreds lost their lives and thou sands 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 experi ence and evolve safeguards atleast for the future
The time is ripe to take a fresh look at the outdated century old legislation which is out of tune with modern concepts
728F H 729A B 9
The Central Government will be well advised to insist on certain safeguards before permitting a transnational company to do business in the country
It is necessary to insist on a right to be informed of the nature of the proc esses involved so as to take prompt action in the event of an accident
The victims in this case have been considerably handicapped on account of the fact that the immediate 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 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 coun try that the liability of such a corporation is not limited to such of its assets or the assets of its affiliates as may be found in this country but that the victims are able to reach out to the assets of such concerns anywhere in the world and that any decree obtained in Indian Courts in compliance with due process of law is capable of being executed against the foreign corporation its affiliates and their assets without further procedural hurdles
in those other countries
729G H 730A E 10
It is hoped that calamities like the one which this country has suffered will serve as catalyst to expedite the acceptance of an international code on such matters in the near future
730F G