Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

CURATIVE PET (C) No.345-347 of 2010 in R.P. No.229/1989 &
623-624/1989 in C.A. No.3187-3188/1988 and
SLP (C) No.13080/1988
UNION OF INDIA & ORS. ....Petitioners
ORS. ....Respondents
1. A horrendous tragedy occurred on the night of 2nd and 3rd
December 1984, due to the escape of deadly chemical fumes from the
factory owned and operated by M/s Union Carbide India Limited
(hereinafter referred as ‘UCIL’) in Bhopal. This Court labelled the
mass disaster as “unparalleled in its magnitude and devastation and …
a ghastly monument to the dehumanizing influence of inherently
dangerous technologies”. Union of India has filed the present curative
petitions seeking reconsideration of the settlement that was effected in
the aftermath of the tragedy.
Background and claims in the present petitions
2. In order to provide remuneration to victims, and to create an
institutional framework for disbursal of remedies, the Bhopal Gas Leak
Disaster (Processing of Claims) Act, 1985 (hereinafter referred as ‘the
said Act’), was enacted by the Government of India on 20.02.1985.
This granted the Central Government an exclusive right to represent
and act in place of every person who was entitled to make a claim for
compensation. It also empowered the Central Government to institute
suits or other proceedings and to enter into a compromise.
Consequently, the Bhopal Gas Leak Disaster (Registration and
Processing of Claims) Scheme, 1985, was framed in exercise of powers
conferred under Section 9 of the said Act. This Scheme dealt with the
procedure for filing and processing of claims made to the Welfare
Commissioner as per Section 6 of the said Act.
3. Thereafter, several actions for compensation were brought in the
United States District Court for the Southern District of New York
against Union Carbide Corporation (hereinafter referred as ‘UCC’).
UCC was a New York based corporation which owned 50.9% stock in
UCIL at the time of the tragedy. UCC resisted the jurisdiction of the
New York Court on grounds of forum non conveniens, claiming that it
had subjected itself to the Courts of India. Judge Keenan allowed this
plea vide order dated 10.06.1986 and dismissed the consolidated action
on the basis of several factors, including the presence of witnesses and
evidence in India. The order however recorded UCC’s statement that it
shall consent to submit to the jurisdiction of the Courts of India.
4. As a result of the same, a suit was filed by the Union of India
against UCC before the District Judge, Bhopal, seeking compensation
of approximately US $ 3.3 billion. Being apprehensive about funds
being made available for compensation to victims, the Union sought
interim compensation from UCC. This prayer received a favourable
consideration from the District Judge, who passed an interim order on
17.12.1987 directing UCC to deposit a sum of Rs. 350 crores by way of
interim compensation. However, in a revision petition(s) filed by UCC,
this amount was reduced to Rs. 250 crores by the Madhya Pradesh
High Court vide an order dated 04.04.1988.
5. Being aggrieved by this order, both contesting parties i.e. Union
of India and UCC, filed SLPs before this Court. In terms of orders
passed in those proceedings, the parties endeavoured to negotiate a
settlement, possibly with a little nudge from the Court. The endeavour
was successful and UCC agreed to pay a sum of US $ 470 million to
the Union of India in settlement of all claims, rights, and liabilities
relating to and arising out of the Bhopal Gas disaster. The terms of the
settlement were set out in the orders of this Court passed on 14th and
15th February, 1989. This Court observed that there had been careful
consideration for several days to the facts and circumstances placed
before the Court by the parties; including the pleadings, data, material
relating to proceedings in the Courts of USA, the offers and counter
offers between the parties at different stages of various proceedings, the
complex issues of law and facts raised, as well as 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. Thus, it was observed that a sum of US $ 470 million
would be just, equitable, and reasonable. This was to be paid on or
before 31.03.1989 and all civil and criminal proceedings were to be
closed in the process.
6. A detailed order setting out the reasons that persuaded this Court
to make the order of settlement was passed thereafter on 04.05.1989,
reported as Union Carbide Corporation v. Union of India & Ors.
would like to highlight a few aspects of the said order. This Court
noted that the basic consideration motivating the settlement was the
compelling need for urgent relief. It was considered necessary to grant
immediate remedy as it was a question of survival for the thousands of
(1989) 3 SCC 38.
persons rendered destitute by the ghastly disaster. Regarding the
quantum of the settlement, this Court added a caveat in paragraph 14 of
the said order. It was observed that if any material was placed before
the Court for drawing a reasonable inference that UCC had earlier
offered to pay any sum higher than the out-right down payment of US
$ 470 million; it would result in the Court initiating a suo motu action,
requiring the parties to show why the settlement should not be set aside
and the parties relegated to their respective original positions.
Discussion then proceeded to the reasonableness of the settlement
amount. It was opined that the question of reasonableness need not
necessarily be construed on the basis of an accurate assessment by way
of adjudication. Instead, the quantum was a broad and general estimate.
What was significant was whether such settlement would avoid delays,
uncertainties, and assure immediate payment. The Court considered it
appropriate to proceed on some prima facie undisputed figures of cases
of death and of substantially compensatable personal injuries. This
Court referred to the factual scenario emanating from the High Court
order dated 04.04.1988, where it was recorded that as per the Union of
India, a total number of 2660 persons died and between 30,000 to
40,000 sustained serious injuries as a result of the disaster. The figures
before the Supreme Court at the time were stated to be about 3000 fatal
cases, and the number of grievous and serious personal injuries was
about 30,000, as verifiable from hospital records. In estimating the
amount of compensation, this Court set out the following basis in
paragraph 24, which reads as under:
“24. So far as personal injury cases are concerned, about 30,000
was estimated as cases of permanent total or partial disability.
Compensation ranging from Rs. 2 lakhs to Rs. 50,000 per
individual according as the disability is total or partial and degrees
of the latter was envisaged. This alone would account for Rs. 250
crores. In another 20,000 cases of temporary total or partial
disability compensation ranging from Rs. 1 lakh down to Rs. 25,000
depending on the nature and extent of the injuries and extent and
degree of the temporary incapacitation accounting for a further
allocation of Rs. 100 crores, was envisaged. Again, there might be
possibility of injuries of utmost severity in which case even Rs. 4
lakhs per individual might have to be considered. Rs. 80 crores,
additionally for about 2000 of such cases were envisaged. A sum of
Rs. 500 crores approximately was thought of as allocable to the
fatal cases and 42,000 cases of such serious personal injuries
leaving behind in their trail total or partial incapacitation cither of
permanent or temporary character.”
7. Outlays were also made for specialised institutional medical
treatment (Rs. 25 crores) and provision for cases which were not of
permanent/temporary disabilities but of minor injuries, loss of personal
belongings, loss of livestock etc. (Rs. 225 crores). The interest
accruing on the corpus of settlement was also taken into account, being
14% to 14 ½ %.
8. On the aspect of the aforesaid broad allocations, it was clearly
observed that even if a particular case was found to fall within such
broad categories, the determination of actual compensation payable to
the claimant had to be done by the authorities under the said Act.
However, the Court concluded that if the total number of cases of death
or disability became so large so as to counter the ‘basic assumptions
underlying the settlement’, then it would not hesitate to exercise its
powers of review.
9. The next round in the matter related to an endeavour by private
parties to open the settlement by filing a review, inter alia on the
powers of this Court to record a settlement. A Constitution Bench
examined this issue in the Union Carbide Corporation & Others v.
Union of India & Others.
 The settlement was upheld with one caveat.
The extinguishment of criminal liabilities by the settlement was held to
not be appropriate and thus, that aspect of the original order was
reviewed. As to the need to arrive at a settlement, Ranganath Mishra, J.
(as he then was) detailed the factors that had guided this Court. The
Court had to be cognizant of the fact that the Indian assets of UCC,
through UCIL were around Rs. 100 crores at the time. Thus, any decree
in excess of that amount would have to be executed in the courts of
USA. If such decree were determined on the basis of prevailing law in
India, i.e. absolute liability (different from the accepted basis in the
USA, i.e. strict liability); the decree would be open to challenge on the
grounds of due process and may not be executable. On this aspect, the
principal judgment of the majority laid emphasis on balancing factors
such as the need for expedient relief, as recorded in the original
judgment. In so far as the present controversy before us is concerned,
we would like to flag the Court’s observations on the path to be
(1991) 4 SCC 584.
followed if the compensation is found to be inadequate. These are set
out in paragraph 198 of Union Carbide Corporation & Others v.
Union of India & Others3
, which reads as under:
“198. After a careful thought, it appears to us that while it may
not be wise or proper to deprive the victims of the benefit of the
settlement, it is, however, necessary to ensure that in the —
perhaps unlikely — event of the settlement fund being found
inadequate to meet the compensation determined in respect of all
the present claimants, those persons who may have their claims
determined after the fund is exhausted are not left to fend
themselves. But, such a contingency may not arise having regard
to the size of the settlement fund. If it should arise, the reasonable
way to protect the interests of the victims is to hold that the
Union of India, as a welfare State and in the circumstances in
which the settlement was made, should not be found wanting in
making good the deficiency, if any. We hold and declare
10. The aforesaid would show that the burden would fall on the
Union of India, as a welfare state, to protect the interest of the victims.
It is to be noted that Ahmadi J., dissented on this aspect of liability of
the Union. However, naturally, the majority view prevails.
11. Another aspect noted in the review was qua the members of the
population of Bhopal who were put at risk; and who though
asymptomatic at the time and not having filed for compensation, might
become symptomatic in future. In addition, care had to be taken of
unborn children of mothers exposed to toxicity, where such children
later develop congenital defects. For such an eventuality, a medical
group insurance cover was envisaged. This is set out in paragraph 207
of Union Carbide Corporation & Others v. Union of India & Others4
which reads as under:
“207. We are of the view that such contingencies shall be taken
care of by obtaining an appropriate medical group insurance cover
from the General Insurance Corporation of India or the Life
Insurance Corporation of India for compensation to this contingent
class of possible prospective victims. There shall be no individual
upper monetary limit for the insurance liability. The period of
insurance cover should be a period of eight years in the future. The
number of persons to be covered by this Group Insurance scheme
should be about and not less than one lakh of persons. Having
regard to the population of the seriously affected wards of Bhopal
city at the time of the disaster and having regard to the addition to
the population by the subsequent births extrapolated on the basis of
national average of birth rates over the past years and the future
period of surveillance, this figure broadly accords with the
percentage of (sic the) population of the affected wards bears to the
number of persons found to be affected by medical categorisation.
This insurance cover will virtually serve to render the settlement an
open ended one so far as the contingent class of future victims both
existing and after-born are concerned. The possible claimants fall
into two categories: those who were in existence at the time of
exposure; and those who were yet unborn and whose congenital
defects are traceable to MIC toxicity inherited or derived
12. There is no dispute that the compensation was deposited within
13. Subsequently, certain endeavours were made on behalf of victims
from time to time to open up the settlement. However, these were
opposed by the Union of India and were not successful. The most
recent such attempt was Bhopal Gas Peedith Mahila Udyog
Sangathan & Anr. V. Union of India & Ors.5
14. We are confronted here with an application filed under this
Court’s curative jurisdiction by the Union of India 19 years post the
settlement (i.e. in 2010) seeking to reopen the same. It is noteworthy
that the Union chose not to file the review petitions which culminated
in this Court’s order dated 02.05.1989. Naturally, the present petitions
(2007) 9 SCC 707.
have been strongly opposed by UCC, whereas groups stated to be
representing the victims have endeavoured to ride piggyback on the
curative petitions.
15. The curative petitions are broadly predicated on account of
“wrong assumption of facts and data” which undergirded the quantum
of the settlement. Thus, the plea is that this ‘incompleteness of facts’,
particularly with respect to the number of victims, has vitiated the
settlement itself. On this basis, the settlement amount needs to be reexamined by this Court. Nevertheless, we may note that the Union of
India was quite conscious of the fact that if the settlement were to be
reopened, it would result in a revival of the suit, something which the
Union has not even claimed. What the Union of India claims in essence
is to top up the settlement i.e. maintain the factum of the settlement but
to increase the amount as canvassed by Mr. R. Venkataramani, the
learned Attorney General.
16. The Union of India’s claims, as set out in the petitions, are based
on three categories:
“Claim – I: Claim on account of incorrect and wrong assumption
of facts and data in the impugned judgments and orders on
following grounds:
(i) Error in computation of Death Cases – Court recorded the
estimated number of death cases was 3,000 whereas actual figure
of death is 5,295 cases.
(ii) Error in computation of Temporary Injury Cases – Court
recorded the estimated number of temporary disability cases was
20,000 whereas actual figure of temporary disability is 35,455
(iii) Error in computation of Minor Injury Cases – Court recorded
that the estimated number of Minor Injury cases was 50,000
whereas actual figure of Minor Injury is 5,27,894 cases.
(iv) Other Cases – In certain categories (viz. Permanent disability,
utmost severe injuries, loss of property and loss of livestock), the
actual number assumed by the court has been found to be on the
higher side resulting in the extra provision of compensation in
those categories.”
17. The total amount claimed under this category was Rs. 675.96
crore at the time of filing the curative petitions. This Court vide order
dated 11.10.2022 requested for the latest figures available as on the
said date. These details have been set out in tabular form below:
Sl. Category Supreme Court Order dated Number Difference Additional Number of Difference Additional
No 4.5.1989 of cases
(as on
er 2010)
in number
of cases
(as on
required (as
cases (as on
in number
of cases (as
required to
be paid (Rs
in Cr.) (as
No. of
(Rs. In
(in Rs.)
A B C D E=(A-D) F=(E x C) G H= (A-G) I= (H x C)
1. Death 3000 70 2,33,000 5295 2,295 53.47 5,479 2,479 57.76
2. Permanent
30,000 250 83,000 4902 -25,098 -208.31 5,125 -24,875 -206.46
3. Temporary
20,000 100 50,000 35,455 15,455 77.27 34,343 14,343 71.72
4. Utmost
severe cases
2000 80 4,00,000 42 -1,958 -78.32 23 -1,977 -79.08
5. Minor
50,000 100 20,000 5,27,894 4,77,894 955.79 5,27,727 4,77727 955.45
6. Loss of
50,000 75 15,000 555 -49445 -74.17 555 -49445 -74.17
7. Loss of
50,000 50 10,000 233 -49,767 -49.77 233 -49,767 -49.77
Total 2,05,000 725 5,74,376 675.96 5,73,485 675.45
18. The last column of the chart shows the additional amount
required to be paid. While there is an increase in the amount required
for compensation for death and temporary disability, there is also a
decrease in the amounts required for cases of permanent disability and
utmost severe cases, as also for loss of property and loss of life. This
may have been the result of some changes in the categorisation of cases
on account of the available material. The real increase is on account of
minor injuries where it is stated that the additional amount required is
of Rs. 955.45 crores. Undoubtedly, a decision was taken by the
Government of India on 08.09.1992 to increase the amount of
compensation to victims in view of representations filed by various
social action groups.
“Claim – II: Claim of Rs.1,743.15 cr. on account of actual
expenditure incurred by the State towards relief and rehabilitation
19. The aforesaid claim was further updated to Rs. 4,949.67 crores.
“Claim – III: Claim of Rs.315.70 crore on account of environment
20. The updated amount under this category is Rs. 486.78 crores.
21. The Union of India has also claimed that since the revised
amount is being claimed a number of years after the settlement; several
aspects, such as the devaluation of the rupee, interest rate, purchasing
power parity, and the inflation index ought to be taken into account.
These considerations were pleaded in alternative and are summarized
in the following table:
Options Claim I Claim II Claim III Total
2010 2022 2010 2022 2010 2022 2010 2022
Option-I 5786.07* 8562.09* 1743.15 4,949.67 315.70 486.78 7844.92 13,998.54
Option-II 3298.69$
1743.15 4,949.67 315.70 486.78 5357.54 12,566.61
1743.15 4,949.67 315.70 486.78 4995.21 12,181.25
* Calculations based on Yearly LIBOR
$ Calculations by applying Consumer Price Index (CPI) for industrial
& Calculations based on 7% Compound Interest
UCC’s Submissions
22. The curative petitions were strongly opposed by Mr. Harish
Salve, learned senior counsel appearing for UCC.
23. The preliminary objection was on the very maintainability of a
curative petitions after two decades of the settlement. It was submitted
that this was in breach of the principles enshrined in Rupa Ashok
Hurra v. Ashok Hurra & Anr.6
, wherein this Court had specified very
limited contours for its curative jurisdiction:
“51. Nevertheless, we think that a petitioner is entitled to
relief ex debito justitiae if he establishes (1) violation of
principles of natural justice in that he was not a party to the
lis but the judgement adversely affected his interests or, if he
(2002) 4 SCC 388.
was a party to the lis, he was not served with notice of the
proceedings and the matter proceeded as if he had notice and
(2) where in the proceedings a learned Judge failed to
disclose his connection with the subject-matter or the parties
giving scope for an apprehension of bias and the judgment
adversely affects the petitioner.”
24. It was submitted that the present curative petitions did not fall
under any of these parameters. Counsel for UCC also highlighted
another procedural deficiency on the basis of paragraph 52 of Rupa
Ashok Hurra,
 wherein the petitioner is required to specifically aver
that the grounds mentioned in the curative petition had been taken in
the review petition and subsequently dismissed by circulation. Since
Union of India had not filed review petition(s), the curative petitions
ought to be thrown out at the threshold.
25. In response, the Learned Attorney General contended that it was
this Court’s prerogative to chart a new course in terms of its curative
jurisdiction, and to not limit itself to the extant norms specified in
Rupa Ashok Hurra.
On maintainability
26. On this preliminary point, we may note that a curative petition
relates to a re-examination of a final judgment of this Court,
particularly one that has already undergone such re-examination
through the Court’s review jurisdiction. Since this Court’s review
jurisdiction itself is so restrictive, we find it difficult to accept that this
Court can devise a curative jurisdiction that is expansive in character.
27. On the facts of this case, we have already noticed that when
review petitions were filed against the orders recording the settlement,
the Union of India sought to support the same. However, the Union
subsequently opposed all other applications filed for reopening the
settlement. We understand that such a strategy was adopted as the
Union of India’s endeavour is not to set aside the settlement but merely
to ‘top up’ the settlement amount.
28. We have great hesitation in allowing such a prayer and granting
such sui generis relief through the means of curative petitions.
Although this Court in Rupa Ashok Hurra9
chose not to enumerate all
the grounds on which a curative petition could be entertained; the
Court was clear in observing that its inherent power ought not to be
exercised as a matter of course, and that it should be circumspect in
reconsidering an order of this Court that had become final on dismissal
of the review petition. Nevertheless, looking at the nature of the matter
before us, it would be advisable to also examine the curative
petition(s), apart from the aforesaid preliminary objection.
On Merits
29. Turning to the objections on merits of the claims in the curative
petitions, counsel for UCC emphasised that the US$ 470 million (Rs.
750 crore), required to be deposited were so deposited and, thus, if the
settlement is to be set aside, then the only consequence would be to
revive the suit. As a corollary, the Union of India would be required to
lead evidence to establish UCC’s liability, and UCC would be entitled
to have US$ 470 million remitted back to it by the Union of India with
30. It was pointed out that an endeavour was made in the year 2007
by way of interlocutory applications to seek enhancement of the
settlement fund by private organisations. This prayer was rejected by
this Court in Bhopal Gas Peedith Mahila Udyog Sangathan10 on the
ground that re-examination of the settlement could not be done as the
issue had already been decided. With regards to individual victims and
organisations, any grievances towards the amount of compensation had
to be taken up before the appropriate authorities constituted under the
said Act. It is noteworthy that the Union of India had opposed the plea
of the private parties, and had taken a stand before this Court that
claims had been adjudicated and compensation had been paid in terms
of the scheme devised under the said Act.
31. The aforesaid was the latest endeavour prior to the filing of the
present curative petitions. However, even before this, certain private
organisations had filed interlocutory applications for disbursal of the
surplus amount left from the settlement fund. This Court in Union
Carbide Corporation Ltd. V. Union of India11 observed that
10 (supra).
11 (2006) 13 SCC 321.
approximately Rs. 1,503.01 crores from the settlement fund were
available as on that date, and thus ordered that this amount be
distributed on pro rata basis to those persons whose claims had been
32. There appear to be two reasons for the growth of the fund – (a)
interest on it and (b) more importantly, an exchange rate fluctuation in
favour of the US Dollar. We may hasten to add that the learned
Attorney General was correct in submitting that UCC could not have
taken benefit of a hypothetical fluctuation in the opposite direction, i.e.
in favour of the Rupee. Nevertheless, the fact remains that the
settlement fund, and the disbursement from the same underwent a
significant increase considering the lapse of time.
33. Next, learned counsel for UCC contended that the language of
this Court’s orders dated 14.02.1989 and 15.02.1989 left no doubt as to
the comprehensive nature of the settlement. UCC had agreed to the
settlement even without a finding as to its liability. UCC’s Indian
holding, i.e. UCIL had been wound up. The settlement was accepted
only on the basis that it was an overall settlement, which ended its
potential exposure towards any legal proceedings. As a final stamp
upon the settlement; this Court’s order dated 15.02.1989 had imposed a
duty on the Union of India and the State of Madhya Pradesh to ensure
that any suit, claim, or civil complaint filed in the future against UCC
would be defended by the Union of India and would be disposed of in
terms of the said order.
34. It was urged that the review judgment had confirmed the ‘basic
assumptions underlying the settlement’ and the settlement itself had
been upheld, save the aspect of closure of criminal proceedings.
Moreover, the issues sought to be raised in the present curative
petitions were in fact raised in the review petitions filed by the private
parties and were finally decided by the order of this Court dated
35. Thus, it was contended that the substance of Union of India’s
Claim-I, i.e. on account of error in computation of deaths, injuries etc.
had actually been addressed by this Court in its review judgment. This
Court had dealt with the risk of asymptomatic individuals later
becoming ill and had directed the Union of India to obtain insurance
cover for eight years and to provide free medical monitoring and
treatment of victims. In case of any deficit in the settlement fund, the
responsibility was placed on the Union of India as a welfare State to
fulfil such deficiency. Mr. Salve emphasised that it would be hazardous
to belittle the advantages of a settlement by questioning it on the anvil
of adequacy or fairness, considering the complexity of the matter and
the need to protect victims from the prospects of a protracted,
exhausting, and uncertain litigation.
36. It was further contended that the settlement decree passed by this
Court was not an adjudication upon either UCC’s liability or the
quantum of compensation payable, as the suit never went to trial. A
consensual settlement cannot be unilaterally enhanced without the
consent of both the parties. The Union of India has not brought forth
any allegation against the settlement or any ground to set it aside. The
Union was fully aware of the consequences of setting aside the
settlement and thus, restricted their petitions to a prayer for ‘topping
up’ the settlement amount.
37. It was also emphasised that there was no basic assumption that
could be considered to have gone wrong. In the table reproduced
above, it would appear that the only head in which there was any major
change was with respect to ‘minor injuries’. This however resulted
from the Union’s own categorisation of injuries suffered in the
aftermath of the tragedy, and their decision to expand the coverage of
relief to a larger number of individuals. This was possible only because
of the large amount of funds available with the Union, as is evident
from the fact that this Court had in its order dated 19.05.2004 noted the
availability of more than Rs. 1,500 crores available with the RBI and
consequently awarded disbursal of the same on a pro rata basis. The
Welfare Commissioner had recorded that after paying Rs.1,548.95
crores in the first round, a further Rs.1,509.14 crores had been
disbursed on pro rata basis. Thus, a total of over Rs.3,000 crore had
been paid to the victims.
38. In fact, it is admitted before us by the learned Attorney General
that a sum of Rs. 50 crore was still lying with the Reserve Bank of
India to take care of victims.
39. We may note that the intervenors, who are organisations
representing victims, have also raised a similar line of arguments and
their prayer is also to enhance the settlement amount. Mr. Sanjay
Parekh, learned senior counsel, while seeking enhancement appeared to
mirror the arguments of the learned Attorney General. In addition, he
prayed for digitisation of medical records for the benefit of victims who
had been attended to in the hospitals so as to enable a fair assessment
of their injuries. This aspect is however stated to be pending before the
Madhya Pradesh High Court.
40. We have bestowed our anxious consideration to the arguments
put forth by both sides. While we sympathize with the victims of the
awful tragedy, we are unable to disregard settled principles of law,
particularly at the curative stage. Mere sympathy for the sufferers does
not enable us to devise a panacea; more so while looking into the
nature of dispute, and the multifarious occasions on which this Court
has applied its mind to the settlement.
41. The very basis for the original settlement was the need to provide
immediate succour to the victims - through medical relief,
rehabilitation measures, setting up of facilities etc. This has been
clearly observed by this Court at every step; be it in the orders
recording the settlement, the order detailing reasons for the same, and
the review judgment. We thus do not appreciate the endeavour by Ms.
Karuna Nundy, counsel for the intervenors, in making out a case that
there was a ‘midnight settlement’ whereby a fraud was played upon
this Court and the Union. The Court was clearly occupied with the
aspect of a settlement being entered into, and it was found, after a
number of sittings and rounds of hearings, that this was the most
appropriate course of action.
42. On the aspect of adequacy, we must also take note of the factual
scenario which emerges as per the figures of the Union itself. Except
for cases of minor injuries, the settlement amount was actually in
excess as is apparent from the table reproduced above. As far as the
issue of minor injuries is concerned, it appears from the Union’s own
affidavit in IA Nos. 48-49/2004 in Civil Appeal No. 3187-88 of 1998
that in cases of injury, Rs. 50,000 to Rs. 4 lakh (original and pro rata
compensation) and an additional Rs. 50,000 were paid in cases of mere
presence in the gas affected areas of Bhopal on the fateful night. It has
also been admitted in the said affidavit that the amount of
compensation for all categories was allocated on the higher side, and
after disbursal of the leftover amount on a pro rata basis, the overall
rate of compensation has in fact been doubled. Suffice for us to say
that as per the learned Attorney General, a figure of Rs. 50 crore
remains with the Reserve Bank of India lying undisbursed.
43. We are conscious of the fact that the exchange rate worked in the
Union’s favour as the exchange rate of the Dollar rate escalated. Some
interest on the settlement amount also came in. This has allowed the
Union to work out a more wholesome allotment for the claimants.
44. We are cognizant that no amount is truly adequate when such
incidents occur. Nevertheless, a monetary determination had to take
place, and the only compensatory mechanism known to common law is
that of a lump-sum settlement. This was deemed far more preferable to
the alternative option, whereby the suit would be allowed to be tried
without a reasonable expectation of knowing when the trial would
come to an end. This determination would of course be subject to
further appeals and the process of execution, particularly as UCIL’s
assets in India were only about Rs. 100 crores. Without a settlement,
immediate funds would not have been available for the victims. All
these factors weighed with this Court while arriving at the settlement.
45. It is the Union’s own stand that the Commissioner has
adjudicated all claims through procedure established by law where the
possibility of appeal was provided. Further, it has been admitted in the
proceedings culminating in this Court’s order dated 19.07.2004 that the
amount of settlement was found to be in surplus of the actual
requirement, and thus the claimants had been “provided compensation
that was more than what was reasonably awardable to them under
law”. This reinforces the position that the settlement amount was
sufficient to compensate the claimants.
46. The Union has filed the present curative petitions seeking to
reopen the settlement after opposing attempts by private parties to do
so. The scenario arising in case of a shortage was clearly outlined in the
review judgment, i.e. the responsibility was placed on the Union of
India, being a welfare State to make good the deficiency and to take out
the relevant insurance policies. Surprisingly, we are informed that no
such insurance policy was taken out. This is gross negligence on part
of the Union of India and is a breach of the directions made in the
review judgment. The Union cannot be negligent on this aspect and
then seek a prayer from this Court to fix such liability on UCC.
47. Union of India’s claim for a ‘top up’ has no foundations in any
known legal principle. Either a settlement is valid or it is to be set aside
in cases where it is vitiated by fraud. No such fraud has been pleaded
by the Union, and their only contention relates to a number of victims,
injuries, and costs that were not contemplated at the time the settlement
was effected. There is also specifically no pleading under the heading
of Claims 2 and 3 that can be said to be admissible, or one that could
not be envisaged at the stage of settlement. It was known that medical
facilities would have to be extended to rehabilitate people and there
was bound to be environmental degradation. In fact, it is the UCC’s
allegation that the Union and State Governments did not proactively
detoxify or decomission the site, thereby aggravating the problem. In
any case, this cannot be a ground to seek annulment of the
compromise, particularly as the settlement had to be reached in an
expedient manner. The learned Attorney General’s response has been
that a method for ‘topping up’ the settlement amount be devised under
Article 142 of the Constitution of India. We believe this would not be
an appropriate course of action or a method to impose a greater liability
on UCC than it initially agreed to bear.
48. We are equally dissatisfied with the Union being unable to
furnish any rationale for raking up this issue more than two decades
after the incident. Even assuming that the figures of affected persons
turned out to be larger than contemplated earlier, an excess amount of
funds remained available to satisfy such claims. The Welfare
Commissioner has in fact held in its order dated 31.01.2009 that on
including the pro rata compensation, nearly six times the amount of
compensation has been disbursed to victims in comparison with Motor
Vehicle Accident claims. This order came in an application filed by
organisations who sought enhancement of their claim amounts due to
fluctuation in the conversion value of the Dollar vis-à-vis the Rupee
prevailing at the time of the settlement in 1989. A sum of Rs.50 crore
lying with the RBI shall be utilised by the Union of India to satisfy
pending claims, if any, in accordance with the Bhopal Gas Leak
Disaster (Processing of Claims) Act, 1985 and the Scheme framed
49. Providing closure to a lis is also a very important aspect. This is
more so in the context of the scenario faced by the Indian judiciary,
where delay is almost inevitable. This concern would be further
amplified in respect of a tort claim such as the present one - if evidence
were to be led for each claimant, this would open a pandora’s box in
UCC’s favour and would only be to the detriment of the beneficiaries.
The money was needed in the immediate aftermath of the tragedy and
not after three decades.
50. Thus, finality was reached at an early stage by way of the
settlement. Endeavours to reopen the same proved unsuccessful. Now
the curative petitions have been filed by the Union of India having not
filed review petitions. Private parties who are here before us seek to
ride on the coattails of the Union. This is not something we can
51. We are thus of the view that for all the aforesaid reasons the
curative petitions cannot be entertained and we thus dismiss it leaving
the parties to bear their own costs.
[Sanjay Kishan Kaul]
[Sanjiv Khanna]
[Abhay S. Oka]
[Vikram Nath]
[J.K. Maheshwari]
New Delhi.
March 14, 2023.


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