UNION OF INDIA & ORS Versus M/S. UNION CARBIDE CORPORATION & ORS

UNION OF INDIA & ORS Versus M/S. UNION CARBIDE CORPORATION & ORS 

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

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

Versus

M/S. UNION CARBIDE CORPORATION &

ORS. ....Respondents

O R D E R

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

1

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

2

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

3

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

4

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.

1

 We

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

1

(1989) 3 SCC 38.

5

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

6

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

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

8

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.

2

 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

2

(1991) 4 SCC 584.

9

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

accordingly.”

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.

3

(supra).

10

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

4

(supra)

11

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

congenitally.”

12. There is no dispute that the compensation was deposited within

time.

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

5

(2007) 9 SCC 707.

12

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.

13

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

cases.

(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

14

No 4.5.1989 of cases

(as on

Decemb

er 2010)

in number

of cases

(as on

December

2010)

amount

required (as

on

31.10.2022)

cases (as on

31.10.2022)

in number

of cases (as

on

31.10.2022)

amount

required to

be paid (Rs

in Cr.) (as

on

31.10.2022)

No. of

cases

assumed

Amount

provided

(Rs. In

Cr.)

Average

amount

(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

Disability

30,000 250 83,000 4902 -25,098 -208.31 5,125 -24,875 -206.46

3. Temporary

disability

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

injuries

50,000 100 20,000 5,27,894 4,77,894 955.79 5,27,727 4,77727 955.45

6. Loss of

property

50,000 75 15,000 555 -49445 -74.17 555 -49445 -74.17

7. Loss of

livestock

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

15

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

measures.”

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

degradation.”

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

16

Option-II 3298.69$

7130.16$

1743.15 4,949.67 315.70 486.78 5357.54 12,566.61

OptionIII

2939.36&

6744.80&

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

workers

& 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

6

(2002) 4 SCC 388.

17

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,

7

 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.

8

7

(supra).

8

(supra).

18

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.

19

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

interest.

9

(supra).

20

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.

21

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

settled.

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

22

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

03.10.1991.

23

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

24

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

25

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.

Analysis

26

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

27

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.

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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.

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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

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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

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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

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Disaster (Processing of Claims) Act, 1985 and the Scheme framed

thereunder.

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

countenance.

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Conclusion:

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.

...................……………………J.

[Sanjay Kishan Kaul]

 .............……………………J.

[Sanjiv Khanna]

 .............……………………J.

[Abhay S. Oka]

...................……………………J.

[Vikram Nath]

 .............……………………J.

[J.K. Maheshwari]

New Delhi.

March 14, 2023.

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