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PETITIONER: CHARAN LAL SAHU ETC. ETC.

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT22/12/1989

BENCH: MUKHARJI, SABYASACHI (CJ) BENCH: MUKHARJI, SABYASACHI (CJ) SINGH, K.N. (J) RANGNATHAN, S. AHMADI, A.M. (J) SAIKIA, K.N. (J)

CITATION:  1990 AIR 1480            1989 SCR  Supl. (2) 597  1990 SCC  (1) 613        JT 1989 (4)   582  CITATOR INFO :  E          1991 SC 101  (30,278)  E          1992 SC 248  (31,33,35,36,44,70,71,79,80,81

ACT:     Constitution  of  India,  1950:  Articles  14,  19   and 21--Bhopal  Gas  Leak Disaster (Processing of  claims)  Act, 1985--Whether constitutionally valid.     Preamble  and  Articles  38,  39  and  39A--Doctrine  of ’parens  patriae’--Applicability  of Exercise  of  sovereign power--Limitations.   Articles  21,  48A  and   51(g)--Human rights--State’s obligation to protect--Need for enacting law protecting  the constitutional rights of  citizens--Evolving standards  highlighted by clauses 9 and 13 of U.N.  Code  of Conduct on transnational corporations.     Bhopal  Gas  Leak Disaster (Processing of  claims)  Act, 1985:  Sections 3, 4, 5, 9 and  11--Constitutional  validity of.  Central  Govt.  representing victims  in  suit  against multinational company--Govt. holding share in company--Govt. alleged to be joint tort feasor--Whether competent to repre- sent victims--Whether principles of natural justice  violat- ed.     Settlement  of claims before  court--Pre-decisional  and post  decisional notice--Need for----Effect of non-issue  of notice.     Power conferred on Central Govt. to represent victims in suit-Divesting individual rights to legal  remedy--Procedure followed-Whether consistent with the Code of Civil Procedure 1908.     Interim  Compensation--Payment of.  Precautionary  meas- ures-Need  for--Guidelines for the future--Immediate  relief to victims-Setting up of a Tribunal--Creation of  Industrial Disaster Fund-Mooted.     Code of Civil Procedure, 1908: Order I Rule 8 and  Order 23  Rule  3B--Procedure followed under the Bhopal  Gas  Leak Disaster  (Processing  of claims) Act,  1985--Central  Govt. representing victims in suit-Divesting individual rights  to legal remedy--Whether procedure 598 standard and fair--Whether violative of principles of  natu- ral justice.     Administrative Law--Principles of Natural Justice.’  Act

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of  Parliament within legislative  competence--applicability of the principles.     Pre-decisional  notice  not  given--Effect  of.  Central Government representing victims in a suit against a multina- tional  company--Govt.  having  shares  in  company--Alleged tort-feasor--Whether  competent to  represent  victims--Doc- trine that no man shall be judge of his own  cause--Doctrine of necessity----Doctrine of ’defacto validity’--Doctrine  of bona fide representation--Applicability of.     Statutory   construction:  Constructive  intuition   ap- proach--statute     to    be    read    purposefully     and meaningfully--Regard to be had to the spirit of the  statute and the mischief intended to be cured by it.     Law  of Torts: Bhopal Gas Leak Disaster  (Processing  of claims)   Act,   1985--Grant  of  interim  relief   to   the victims--Whether  inherent in the Act and the Scheme  framed thereunder--Liability  of  tort-feasor-Whether  limited   to civil  liability to compensation-whether  includes  criminal liability to punitive damages also.

HEADNOTE:     Union  Carbide  (India) Ltd. (UCIL) is a  subsidiary  of Union  Carbide  Corporation (UCC), a New  York  Corporation. UCIL was incorporated in India in 1954. 50.99% 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 3,000  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  U.S. 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 U.S. 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 5.9.86. However, there were  negotiations for  a settlement; hut ultimately the settlement  talks  had failed.     On 17.12.1987, the District Judge ordered interim relief of  Rs.350  crores.  On appeal, the High  Court,  on  4.4.88 modified  the  order of the District Judge  and  ordered  an interim relief of Rs.250 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 14.2.89  and  15.2.89,  this Court,  on the basis of a settlement arrived at between  the parties,  directed  UCC  to pay a sum of  470  million  U.S. Dollars  to  the Union of India in full  settlement  of  all claims, rights and liabilities related to and arising out of

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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 K.N. Saikia, J.--Per C J:     1.1  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 s. 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]     1.2 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

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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]      2.1  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]     2.2  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]     2.3 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 v. Nathella Sampathu  Chet- ty, [1962] 3 SCR 786; P.J. Irani v. State of Madras,  [1962] 1  SCR 169; D.K. Trivedi v. State of Gujarat, [1986]  Suppl. SCC 20, relied on.     Ballast  Corporation v. O.D. Commission, [1960] AC  490, referred to- 602     3.1  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

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violation of any principle of natural justice. [670B]     3.2 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]     3.3  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     3.4  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

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victims and to protect them in their hour of need. [658B-F]     3.5 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]     3.6  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]

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   3.7  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]     3.8 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]     E.P.  Royappa v. State of Tamil Nadu, [1974] 2 SCR  348; Menaka  Gandhi  v. Union of India, [1978] 2  SCR  621;  R.D. Shetty v. International Airport Authority of India, [1979] 3 SCR 1014 followed. 605 Ram Saroop v. S.P. Sahi, [1969] 2 Suppl. SCR 583 relied on.     Budhkaran Chankhani v. Thakur Prasad Shah, AIR 1942  Col 311; Banku Behari Mondal v. Banku Behari Hazra, AIR 1943 Cal 203; Medai Dalavoi T. Kumaraswamy Mudaliar v. Medai  Dalavoi Rajammal, AIR 1957 Mad. 563 approved.     State of U.P. v. Poosu, [1978] 3 SCR 1005; K.M. Nanavati v.  State of Bombay, [1961] 1 SCR 497; Ram Gopal Sarubai  v. Smt. Sarubhai & Ors., [1981] 4 SCC 505; India Mica &  Mican- ite  Industries Ltd. v. State of Bihar & Ors. [1982]  3  SCC 182; Alfred L Snapp & SonInc. v. Puerto Rico, 458 US 592 73, Ed.  2d 995, 102 s. ct. 3260; State of Georgia v.  Tennessee Copper  Co.,  206 US 230, 51 L.Ed. 1038 27 s. et.  618,  re- ferred to.     B.K. Mukherjea on Hindu Religious and Charitable Trusts, Tagore  Law  Lectures,  5th Edn. p. 404;  Words  &  Phrases, permanent Edn. vol.  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  3.24, referred to.     4.1  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]     4.2  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     4.3 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

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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]     4.4 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]     4.5 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 v. Income Tax Commissioner, AIR 1959 SC 149; In re Special Courts Bill, [1979] 2 SCR 476; A.R. Antulay v.  R.S. Nayak  & Anr., [1988] 2 SCC 602; Ram Krishna Dalmia v.  Ten- dulkar,  [1955]  SCR 279; Ambika Prasad Mishra v.  State  of U.P.  &  Ors. etc. [1980] 3 SCR 1159;  Bodhan  Chowdhary  v. State  of Bihar, [1955] 1 SCR 1045; Lakshmi Kant  Pandey  v. Union of India, [1984] 2 SCR 795; M/s Mackinnon Mackenzie  & Co.  Ltd.  v. Audrey D’ Costa and Anr., [1987]  2  SCC  469; Sheela  Barse  v. Secretary, Children Aid  Society  &  Ors., [1987]  1  SCR  870; Gokaraju Rangaraju v.  State  of  A.P., [1981]  3  SCR  474; Pushpadevi M. Jatia  v.  M.L.  Wadhwan. [1987] 3 SCC 367; 607 M/s  Beopar  Sahayak (P) Ltd. & Ors. v. Vishwanath  &  Ors., [1987]  3  SCC  693; Dharampal Singh v.  Director  of  Small Industries Services & Ors., AIR 1980 SC 1888; N.K.  Mohammed Sulaiman  v. N.C. Mohammed lsmail & Ors., [1966] 1 SCR  937; Malkariun Bin Shidrammappa Pasare v. Narhari Bin Shivappa  & Anr., 271 A 216, referred to. Black’s Law Dictionary 5th Edn. p. 437, referred to.     5.  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-

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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 s. 4 of the Act, the Act cannot  be condemned as unreasonable. [684C-E] State of Madras v. V.G. Row, [1952] SCR 597, referred to.     6.1 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]     6.2  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]     6.3 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]     7.1  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]     7.2  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

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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]     7.3  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 v. Rukn-ul-Mulk Syed Abdul Wajid, [1963] 3 SCR  22;  M. Narayanan Nambiar v. State  of  Kerala,  [1963] Supp. (2) 724; Chintaharan Ghose & Ors. v. Gujaraddi Sheik & Ors.,  AIR 1951 Cal. 456; Ram ’Sarup v. Nanak Ram, AIR  1952 All. 275; referred to.     8. 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  2(e)  includes the Government. Therefore,  the  Act proceeded  on the assumption that the Government could be  a claimant being a person as such. [690A-B]     9.1  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 19(1)(g) and negate Article 21 of the Constitution by  deny- ing a procedure which is just, fair and reasonable. [693D-E]     9.2  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

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was good. [694A-D]     9.3 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 v. Union of India, [1978] 2 SCR 621;  Olga Tellis  v. Bombay Municipal Corporation, [1985] Supp. 2  SCR 51;  Union of India v. Tulsi Ram Patel, [1985] Supp.  2  SCR 131;  Swadeshi Cotton Mills v. Union of India, [1981] 2  SCR 533, relied on.     Ganga Bai v. Vijay Kumar, [1974] 3 SCR 882; S.L.  Kapoor v.  Jagmohan, [1981] 1 SCR 745; Sangram v. Election  Commis- sion, [1955] 2 SCR 1, referred to.     10.  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]     11.1 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 M.C. Mehta’s case. [668H; 669A-B] M.C. Mehta v. Union of India, [1987] 1 SCR 819, referred to.     11.2 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 v. State of UP, [1965] 1  SCR

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375;  State  of Rajasthan v. Vidyawati, [1962] 2  Supp.  SCR 989;  J. Mohapatra & Co. & Anr. v. State of Orissa  &  Anr., [1984] 4 SCC 103, referred to.     Halsbury’s  Laws  of England, Vol. 1, 4th Edn.  para  73 Smith’s  Judicial Review of Administrative Action, 4th  Edn. pp. 276-277; Natural Justice by G.A. Flick, [1979] Edn.  pp. 138-141, referred to.     12.  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. v. R.B. Mohan  Singh,  Oberoi (1975) 2 SCR 491; Nandram Heeralal v. Union of India & Anr., AIR 1978 M.P. 209; Ryland v. Flatcher, (1868) Vol 3 LR E&  I Appeal  Cases  330; Rookes v. Barnard, [1964] AC  1129,  re- ferred to. Salmond’s Law of Torts, 15th Edn. p. 30, referred to.     14.  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-

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tions on 613 which  future licences and/or 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):     1.1  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]     1.2 The principles laid down in Ryland v. Fletcher  made it difficult to obtain adequate damages from the  enterprise and  that  too only after the negligence of  enterprise  was proved. [707G-H]     1.3  The  law laid down in Oleum Gas Leak  case  made  a land-mark  departure from the conservative  principles  with

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regard to the liability of an enterprise carrying on hazard- ous or inherently dangerous activities. [709C]     1.4 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  v. Fletcher, [1868] LR 3 HL 330; M.C.  Mehta  v. Union of India, [1987] 1 SCR 819, 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 51(g),  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 U.N.  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).’     1. 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

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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 s. 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

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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 s. 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

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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] M.C. Mehta v. Union of India, [1987] 1 SCR 819, referred to.     7.  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 Fatal Accidents  Act,  1855. 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

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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]

JUDGMENT: ORIGINAL JURISDICTION: Writ Petition No. 268 of 1989 etc. etc. (Under Article 32 of the Constitution of India).     K.  Parasaran, Attorney General, R.K. Garg,  Ms.  Indira Jaising, L.N. Sinha, Dr. V. Gauri Shankar, Vepa P.  Sarathi, Shanti  Bhushan,  Rakesh   Luthra,   C.L.   Sahu,   Indeevar Goodwill, N.S.  Malik, N.S. Pundir, R.C, Kaushik, D.K. Garg, Rajeev Dhawan, Miss Kamini 620 Jaiswal,  Anip  Sachthey, R.C. Pathak, H.D.  Pathak,  Harish Uppal,  S.K. Gambhir, Gopal Subramanium, D.S. Shastri,  Arun Sharma, Miss A. Subhashini, C.V.S. Rao, Satish K. Agnihotri, Ashok  Kumar Singh, R.K. Jain, Kailash Vasdev  and  Prashant Bhushan for the appearing parties. The Judgments of the Court were delivered by     SABYASACHI  MUKHARJI,  CJ.  1. Is the  Bhopal  Gas  Leak Disaster  (Processing  of  Claims)  Act,  1985  (hereinafter referred to as ’the Act’) is constitutionally valid? That is the question.     2. The Act was passed as a sequel to a grim tragedy.  On the  night  of 2nd December, 1984 occurred the  most  tragic industrial disaster in recorded human history in the city of Bhopal  in  the State of Madhya Pradesh in  India.  On  that night  there was massive escape of lethal gas from  the  MIC storage  tank at Bhopal Plant of the Union Carbide (I)  Ltd. (hereinafter referred to as ’UCIL’) resulting in large scale death and untold disaster. A chemical plant owned and  oper- ated by UCIL was situated in the northern sector of the city of  Bhopal. There were numerous hutments adjacent to  it  on its  southern  side,  which were  occupied  by  impoverished squatters.  UCIL  manufactured  the  pesticides,  Sevin  and Tamik, at the Bhopal plant, at the request of, it is  stated by Judge John F. Keenan of the United States District  Court in  his judgment, and indubitably with the approval  of  the Govt.  of  India. UCIL was incorporated in  1984  under  the appropriate  Indian  law: 50.99% of its  shareholdings  were owned  by  the Union Carbide Corporation (UCC), a  New  York Corporation,  L.I.C. and the Unit Trust of India own 22%  of the shares of U.C.I.L., a subsidiary of U.C.C.     3.  Methyl Isocyanate (MIC), a highly toxic gas,  is  an ingredient in the production of both Sevin and Temik. On the night  of the tragedy MIC leaked from the plant in  substan- tial quantities. the exact reasons for and circumstances  of such leakage have not yet been ascertained or clearly estab- lished. The results of the disaster were horrendous.  Though no  one is yet certain as to how many actually died  as  the immediate  and direct result of the leakage,  estimates  at- tribute  it to about 3,000. Some suffered injuries  the  ef- fects  of which are described as Carcinogenic and  ontogenic by  Ms.  Indira  Jaisingh, learned  counsel;  some  suffered

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injuries serious and permanent and some mild and  temporary. Livestock was killed, damaged and infected. Businesses  were interrupted.  Environment was polluted and the  ecology  af- fected, flora and fauna disturbed. 621     4.  On  7th December, 1984, Chairman of UCC  Mr.  Warren Anderson  came  to  Bhopal and was arrested.  He  was  later released  on  bail. Between December 1984 and  January  1985 suits  were filed by several American lawyers in the  courts in America on behalf of several victims. It has been  stated that  within a week after the disaster, many  American  law- yers,  described by some as ’ambulance chasers’, whose  fees were  stated to be based on a percentage of the  contingency of  obtaining  damages or not, flew over to Bhopal  and  ob- tained  Powers of Attorney to bring actions against UCC  and UCIL.  Some suits were also filed before the District  Court of Bhopal by individual claimants against UCC (the  American Company) and the UCIL.     5.  On  or about 6th February, 1985, all  the  suits  in various U.S. Distt. Courts were consolidated by the Judicial Panel  on  Multi-District Litigation and  assigned  to  U.S. Distt. Court, Southern Distt. of New York. Judge Keenan  was at all material times the Presiding Judge there.     6. On 29th March, 1985, the Act in question was  passed. The Act was passed to secure that the claims arising out  of or  connected with the Bhopal gas leak disaster  were  dealt with speedily, effectively and equitably. On 8th April, 1985 by  virtue of the Act the Union of India filed  a  complaint before  the U.S. Distt. Court, Southern Distt. of New  York. On 16th April, 1985 at the first pre-trial conference in the consolidated  action  transferred and assigned to  the  U.S. Distt.  Court, Southern Distt., New York, Judge Keenan  gave the following directions:               (i) that a three member Executive Committee be               formed to frame and develop issues in the case               and prepare expeditiously for trial or settle-               ment  negotiations. The Committee was to  com-               prise  of  one  lawyer selected  by  the  firm               retained  by the Union of India and two  other               lawyers  chosen  by lawyers  retained  by  the               individual plaintiffs.               (ii)  that  as a matter of  fundamental  human               decency,  temporary relief was  necessary  for               the-victims  and  should  be  furnished  in  a               systematic  and  coordinated  fashion  without               unnecessary delay regardless of the posture of               the litigation then pending.      7.  On 24th September, 1985 in exercise of powers  con- ferred  by section 9 of the Act, the Govt. of  India  framed the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme, 1985 (hereinafter called the Scheme). 622     8. On 12th May, 1986 an order was passed by Judge Keenan allowing the application of UCC on forum non convenience  as indicated hereinafter. On 21st May, 1986 there was a  motion for fairness hearing on behalf of the private plaintiffs. On 26th  June, 1986 individual plaintiffs filed  appeal  before the  US Court of Appeal for the second  circuit  challenging the order of Judge Keenan. By an order dated 28th May,  1986 Judge Keenan declined the motion for a fairness hearing. The request for fairness hearing was rejected at the instance of Union  of India in view of the meagerness of the  amount  of proposed settlement. On 10th July, 1986 UCC filed an  appeal before  the  US Court of Appeal for the Second  Circuit.  It challenged Union of India being entitled to American mode of

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discovery,  but did not challenge the other  two  conditions imposed  by Judge Keenan, it is stated. On 28th  July,  1986 the Union of India filed cross-appeal before the US Court of Appeal praying that none of the conditions imposed by  Judge Keenan  should be disturbed. In this connection it would  be pertinent  to  set out the conditions  incorporated  in  the order  of Judge Keenan, dated 12th May, 1986 whereby he  had dismissed  the  case before him on the ground of  forum  non convenience,  as mentioned before. The conditions were  fol- lowing:               1. That UCC shall consent to the  jurisdiction               of  the courts of India and shall continue  to               waive defenses based on the statute of limita-               tion,               2.  That UCC shall agree to satisfy any  judg-               ment  rendered by an Indian court  against  it               and if applicable, upheld on appeal,  provided               the  judgment  and-affirmance  "comport   with               minimal requirements of due process"; and               3. That UCC shah be subject to discovery under               the Federal Rules of Civil Procedure of the US               after appropriate demand by the plaintiffs.     9.  On  5th September, 1986 the Union of India  filed  a suit for damages in the Distt. Court of Bhopal, being  regu- lar  suit No. H 13/86. It is this suit, inter alia, and  the orders  passed therein which were settled by the  orders  of this  Court dated 14th & 15th February, 1989, which will  be referred to later. On 17th November, 1986 upon the  applica- tion of the Union of India, the Distt. Court, Bhopal, grant- ed  a temporary injunction restraining the UCC from  selling assets,  paying  dividends  or buying back  debts.  On  27th November,  1986 the UCC gave an undertaking to preserve  and maintain  unencumbered assets to the extent of 3 billion  US dollars. 623     10.  On  30th November, 1986 the  Distt.  Court,  Bhopal lifted the injunction against the Carbide selling assets  on the  strength of the written undertaking by UCC to  maintain unencumbered assets of 3 billion US dollars. On 16th  Decem- ber, 1986 UCC filed a written statement contending that they were  not liable on the ground that they had nothing  to  do with  the  Indian Company; and that they  were  a  different legal entity; and that they never exercised any control  and that  they were not liable in the suit. Thereafter, on  14th January,  1987  the Court of Appeal for the  Second  Circuit affirmed the decision of Judge Keenan but deleted the condi- tion  regarding the discovery under the  American  procedure granted  in favour of the Union of India. It also  suo  motu set  aside the condition that on the judgment of the  Indian court  complying  with  due process and  the  decree  issued should  be satisfied by UCC. 1t ruled that such a  condition cannot be imposed as the situation was covered by the provi- sions of the Recognition of Foreign Country Money  Judgments Act.     11. On 2nd April, 1987, the court made a written propos- al  to  all parties for considering  reconciliatory  interim relief  to the gas victims. In September, 1987, UCC and  the Govt.  of India sought time from the Court of Distt.  Judge, Bhopal,  to  explore  avenues for settlement.  It  has  been asserted by the learned Attorney General that the possibili- ty  of settlement was there long before the full  and  final settlement was effected. He sought to draw our attention  to the  assertion  that the persons concerned were  aware  that efforts  were being made from time to time  for  settlement. However, in November’87 both the Indian Govt. and the  Union

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Carbide announced that settlement talks had failed and Judge Deo extended the time.     12.  The Distt. Judge of Bhopal on 17th  December,  1987 ordered  interim  relief amounting to Rs.350  crores.  Being aggrieved  thereby the UCC filed a Civil Revision which  was registered as Civil Revision Petition No. 26/88 and the same was  heard. On or about 4th February, 1988, the Chief  Judi- cial  Magistrate  of Bhopal ordered notice  for  warrant  on Union Carbide, Hong Kong for the criminal case filed by  CBI against  Union  Carbide. The charge sheet  there  was  under sections  304, 324, 326, 429 of the Indian Penal  Code  read with section 35 IPC and the charge was against S/Shri Warren Anderson,  Keshub  Mahindra. Vijay Gokhale, J.  Mukund,  Dr. R.B. Roy Chowdhay. S.P. Chowdhary, K.V. Shetty, S.1. Qureshi and Union Carbide of U.S.A., Union Carbide of Hong Kong  and Union Carbide having Calcutta address. It charged the  Union Carbide by saying that MIC gas was stored and it was further stated that MIC had to be stored and handled 624 in  stainless  steel which was not done. The  charge  sheet, inter  alia,  stated that a Scientific Team  headed  by  Dr. Varadarajan had concluded that the factors which had led  to the toxic gas leakage causing its heavy toll existed in  the unique  properties of very high reactivity,  volatility  and inhalation  toxicity  of MIC. It was further stated  in  the charge  sheet that the needless storage of large  quantities of  the material in very large size containers  for  inordi- nately  long  periods  as well as  insufficient  caution  in design, in choice of materials of construction and in provi- sion  of measuring and alarm instruments, together with  the inadequate controls on systems of storage and on quality  of stored materials as well as lack of necessary facilities for quick effective disposal of material exhibiting instability, led to the accident. It also charged that MIC was stored  in a  negligent  manner and the local  administration  was  not informed,  inter alia, of the dangerous effect of the  expo- sure  of MIC or the gases produced by its reaction  and  the medical steps to be taken immediately. It was further stated that apart from the design defects the UCC did not take  any adequate  remedial action to prevent back flow  of  solution from  VGS into RVVH and PVH lines. There were various  other acts  of criminal negligence alleged. The High Court  passed an  order staying the operation of the order dated  17.12.87 directing  the defendant-applicant to deposit Rs.3,500  mil- lions within two months from the date of the said order.  On 4th  April, 1988 the judgment and order were passed  by  the High  Court  modifying the order of the  Distt.  Judge,  and granting  interim  relief of Rs.250 crores. The  High  Court held that under the substantive law of torts, the Court  has jurisdiction to grant interim relief under Section 9 of  the CPC. On 30th June, 1988 Judge Deo passed an order  restrain- ing the Union Carbide from settling with any individual  gas leak  plaintiffs. On 6th September, 1988 special  leave  was granted  by this Court in the petition filed by UCC  against the  grant  of interim relief and Union of  India  was  also granted special leave in the petition challenging the reduc- tion of quantum of compensation from Rs.350 crores to Rs.250 crores.  Thereafter, these matters were heard  in  November- December’88 by the bench presided over by the learned  Chief Justice Of India and hearing, continued also in January Feb- ruary’89 and ultimately on 14-15th February, 1989 the  order culminating in the settlement was passed.     13.  In judging the constitutional validity of the  Act, the subsequent events, namely, how the Act has worked itself out, have to be looked into. It is, therefore, necessary  to

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refer to the two orders of this Court. The proof of the cake is in its eating, it is said, and it is perhaps not possible to ignore the terms of the settlement reached on 14th and 625 15th  February, 1989 in considering the effect of  the  lan- guage used in the Act. Is that valid’ or proper--or has  the Act  been  worked in any improper way?  These  questions  do arise.     14.  On 14th February, 1989 an order was passed in  C.A. Nos.  3187-88/88 with S.L.P. (C) No. 13080/88.  The  parties thereto  were  UCC and the Union of India as  well  as  Jana Swasthya Kendra, Bhopal, Zehraeli Gas Kand Sangharsh Morcha, Bhopal.  MP. That order recited that having  considered  all the  facts and the circumstances of the case  placed  before the  Court, the material relating to the proceedings in  the Courts  in  the  United States of America,  the  offers  and counter-offers made between the parties at different  stages during  the  various  proceedings, as well  as  the  complex issues  of  law  and fact raised and  the  submissions  made thereon,  and in particular the enormity of human  suffering occasioned  by  the  Bhopal Gas disaster  and  the  pressing urgency  to  provide  immediate and  substantial  relief  to victims of the disaster, the ’Court found that the case  was preeminently  fit  for  an overall  settlement  between  the parties covering all litigations, claims, rights and liabil- ities relating to and arising out of the disaster and it was found  just, equitable and reasonable to pass,  inter  alia, the following orders: .lm "(1)  The Union Carbide Corporation shall pay a sum of  U.S. Dollars  470 million (Four hundred and seventy millions)  to the Union of India in full settlement of all claims,  fights and  liabilities  related to and arising out of  Bhopal  Gas disaster. (2)  The  aforesaid sum shall be paid by the  Union  Carbide Corporation  to the Union of India on or before 31st  March, 1989. (3) To enable the effectuation of the settlement, all  civil proceedings  related  to and arising out of the  Bhopal  Gas disaster  shall hereby stand transferred to this  Court  and shall  stand concluded in terms of the settlement,  and  all criminal  proceedings  related  to and arising  out  of  the disaster shall stand quashed wherever these may be pending     15.  A written memorandum was filed thereafter  and  the Court  on 15th February, 1989 passed an order  after  giving due  consideration thereto. The terms of settlement were  as follows: 626               "1. The  parties  acknowledge  that the  order               dated  February  14, 1989 disposes of  in  its               entirety  all proceedings in Suit No. 1113  of               1986. This settlement shall finally dispose of               all past, present and future claims, causes of               action and civil and criminal proceedings  (of               any nature whatsoever wherever pending) by all               Indian  citizens  and all public  and  private               entities with respect to all past, present  or               future   deaths,  personal  injuries,   health               effects,  compensation,  losses,  damages  and               civil  and criminal complaints of  any  nature               whatsoever  against UCC, Union  Carbide  India               Limited,  Union  Carbide Eastern, and  all  of               their  subsidiaries and affiliates as well  as               each  of their present and  former  directors,               officers, employees, agents,  representatives,

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             attorneys,  advocates and  solicitors  arising               out  of,  relating to or  connected  with  the               Bhopal  gas  leak  disaster,  including  past,               present  and future claims, causes  of  action               and  proceedings against each other. All  such               claims and causes of action whether within  or               outside  India of Indian citizens,  public  or               private  entities  are  hereby   extinguished,               including  without  limitation  each  of   the               claims  filed or to be filed under the  Bhopal               Gas Leak Disaster (Registration and Processing               of  Claims)  Scheme 1985, and all  such  civil               proceedings in India are hereby transferred to               this  Court and are dismissed  without  preju-               dice,  and all such criminal  proceedings  in-               cluding contempt proceedings stand quashed and               accused deemed to be acquitted.               2.  Upon full payment in accordance  with  the               Court’s  directions the undertaking  given  by               UCC  pursuant to the order dated November  30,               1986  in  the District  Court,  Bhopal  stands               discharged, and all orders passed in Suit  No.               1113 of 1986 and or in any Revision therefrom,               also stand discharged."     16.  It appears from the statement of objects &  reasons of the Act that the Parliament recognized that the gas  leak disaster  involving  the release, on 2nd and  3rd  December, 1984  of highly noxious and abnormally dangerous gas from  a plant of UCIL, a subsidiary of UCC, was of an  unprecedented nature, which resulted in loss of life and damage to proper- ty on an extensive scale, as mentioned before. It was stated that  the  victims  who had managed to  survive  were  still suffering from the adverse effects and the further complica- tions which might arise in their cases, of course, could not be fully visualised. It was asserted by 627 Ms.  Indira Jaising that in case of some of the victims  the injuries  were  carcinogenic and ontogenic and  these  might lead  to  further  genetic complications  and  damages.  The Central  Govt. and the Govt. of Madhya Pradesh  and  various agencies  had  to  incur expenditure on a  large  scale  for containing  the disaster and mitigating or otherwise  coping with  the effects thereto. Accordingly, the Bhopal Gas  Leak Disaster (Processing of Claims) Ordinance, 1985 was  promul- gated, which provided for the appointment of a  Commissioner for  the welfare of the victims of the disaster and for  the formulation  of  the Scheme to provide for  various  matters necessary for processing of the claims and for the  utilisa- tion by way of disbursal or otherwise of amounts received in satisfaction of the claims.     17.  Thereafter, the Act was passed which  received  the assent of the President on 29th March, 1985. Section 2(b) of the Act defines ’claim’. It says that "claims" means--(i)  a claim, arising out of, or connected with, the disaster,  for compensation  or  damages for any loss of life  or  personal injury  which has been, or is likely to be suffered; (ii)  a claim, arising out of, or connected with, the disaster,  for any  damage to property which has been, or is likely to  be, sustained;  (iii) a claim for expenses incurred or  required to be incurred for containing the disaster or mitigating  or otherwise coping with the effects of the disaster; (iv)  any other claim (including any claim by way of loss of  business or employment) arising out of, or connected with, the disas- ter. A "claimant" is defined as a person entitled to make  a claim. It has been provided in the Explanation to Section  2

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that for the purpose of clauses (b) and (c), where the death of a person has taken place as a result of the disaster, the claim  for  compensation or damages for the  death  of  such person  shall  be for the benefit of  the  spouse,  children (including  a  child  in the womb) and other  heirs  of  the deceased  and  they shall be deemed to be the  claimants  in respect thereof.     18.  Section  3  is headed "Power of  Central  Govt.  to represent claimants". It provides as follows:               "3(1) Subject to the other provisions of  this               Act,  the Central Government shall, and  shall               have  the exclusive right to,  represent,  and               act  in  place of (whether within  or  outside               India) every person who has made, or is  enti-               tled  to make, a claim for all  purposes  con-               nected with such claim in the same manner  and               to the same effect as such persons.               (2) In particular and without prejudice to the               generality of               628               the  provisions of sub-section (1),  the  pur-               poses referred to therein include--               (a) Institution of any suit or other  proceed-               ing in or before any court or other  authority               (whether within or outside India) or withdraw-               al  of any such suit or other proceeding,  and               (b) entering into a compromise.               (3)  The provisions of sub-section  (1)  shall               apply also in relation to claims in respect of               which  suits  or other proceedings  have  been               instituted  in  or before any court  or  other               authority  (whether within or  outside  India)               before the commencement of this Act:               Provided that in the case of any such suit  or               other  proceeding  with respect to  any  claim               pending immediately before the commencement of               this  Act  in  or before any  court  or  other               authority  outside  India, the  Central  Govt.               shall represent, and act in place of, or along               with,  such claimant, if such court  or  other               authority so permits."     19. Section 4 of the Act is headed as "Claimant’s  right to  be represented by a legal practitioner". It provides  as follows:               "Notwithstanding anything contained in section               3,  in representing, and acting in  place  of,               any  person  in  relation to  any  claim,  the               Central  Government shall have due  regard  to               any  matters which such person may require  to               be urged with respect to his claim and  shall,               if  such  person  so desires,  permit  at  the               expense  of such person, a legal  practitioner               of his choice to be associated in the  conduct               of  any suit or other proceeding  relating  to               his claim."     20. Section 5 deals with the powers of the Central Govt. and  enjoins that for the purpose of discharging  its  func- tions  under  this  Act, the Central Govt.  shall  have  the powers  of a civil court while trying a suit under the  Code of  Civil  Procedure, 1908. Section 6 provides for  the  ap- pointment  of a Commissioner and other officers and  employ- ees.  Section  7 deals with powers to  delegate.  Section  8 deals with limitation, while section 9 deals with the  power to  frame Scheme. The Central Govt. was enjoined to frame  a scheme  which  was  to take into account,  inter  alia,  the

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processing  of  the claims for securing  their  enforcement, creation of a fund for meeting expenses in connection 629 with the administration of the Scheme and of the  provisions of  this Act and the amounts which the Central Govt.  might, after  due  appropriation made by the Parliament by  law  in that behalf, credit to the fund referred to in clauses above and any other amounts which might be credited to such  fund. Such  Scheme  was  enjoined, as soon as after  it  had  been framed, to be laid before each House of Parliament.  Section 10  deals with removal of doubts. Section 11 deals with  the overriding  effect and provides that the provisions  of  the Act  and of any Scheme framed thereunder shall  have  effect notwithstanding anything inconsistent therewith contained in any  enactment other than the Act or any  instrument  having effect by virtue of any enactment other than the Act.     21.  A Scheme has been framed and was published on  24th September,  1985. Clause 3 of the said Scheme provides  that the  Deputy Commissioners appointed under Section 6  of  the Act  shall  be the authorities for  registration  of  Claims (including  the receipt, scrutiny and proper  categorisation of  such  claims under paragraph 5 of  the  Scheme)  arising within  the areas of their respective jurisdiction and  they shall be assisted by such other officers as may be appointed by the Central Govt. under Section 6 of the Act for scrutiny and  verification of the claims and other  related  matters. The Scheme also provides for the manner of filing claims. It enjoins that the Dy. Commissioner shall provide the required forms  for  filing the applications. It  also  provides  for categorisation and registration of claims. Sub-clause (2) of Clause  5 enjoins that the claims received for  registration shall be placed under different heads.     22.  Sub-clause  (3)  of clause 5 enjoins  that  on  the consideration  of  claims  made under  paragraph  4  of  the Scheme,  if the Dy. Commissioner is of the opinion that  the claims  fall  in any category different  from  the  category mentioned  by  the claimant, he may decide  the  appropriate category  after giving an opportunity to the claimant to  be heard  and  also after taking into consideration  any  facts made  available  to him in this behalf.  Sub-clause  (6)  of Clause 5 enjoins that if the claimant is not satisfied  with the  order of the Dy. Commissioner, he may prefer an  appeal against such order to the Commissioner, who shall decide the same.     23.  Clause 9 of the Scheme provides for  processing  of Claims Account Fund, which the Central Govt. may, after  due appropriation  made by Parliament, credit to the said  Fund. It  provides  that there shall also be a Claims  and  Relief Fund, which will include the amounts 630 received in satisfaction of the claims and any other amounts made available to the Commissioner as donation or for relief purposes.  Subclause  (3)  of clause 10  provides  that  the amount in the said Fund shall be applied by the Commissioner for,  disbursal  of amounts in settlement of claims,  or  as relief,  or apportionment of part of the Fund for  disbursal of amounts in settlement of claims arising in future or  for disbursal of amounts to the Govt. of Madhya Pradesh for  the social  and economic rehabilitation of the persons  affected by the Bhopal gas leak disaster.     24.  Clause 11 of the Scheme deals with  the  disbursal, apportionment of certain amounts, and sub-clause (2) thereof enjoins  that  the  Central Govt. may  determine  the  total amount  of compensation to be apportioned for each  category of claims and the quantum of compensation payable, in gener-

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al,  in relation to each type of injury or loss.  Sub-clause (5) thereto provides that in case of a dispute as to disbur- sal  of the amounts received in satisfaction of  claims,  an appeal  shall lie against the order of the Dy.  Commissioner to  the Additional Commissioner, who may decide  the  matter and make such disbursal as he may, for reasons to be record- ed in writing, think fit. The other clauses are not relevant for our present purposes.     25.  Counsel for different parties in all these  matters have  canvassed  their  submissions before us  for  the  gas victims. Mr. R.K. Garg, Ms. Indira Jaising, and Mr.  Kailash Vasudev have made various submissions challenging the valid- ity  of the Act on various grounds. They all have  submitted that the Act should be read in the way they suggested and as a  whole. Mr. Shanti Bhushan, appearing for  interveners  on behalf  of  Bhopal  Gas Peedit Mahila  Udyog  Sangathan  and following  him Mr. Prashant Bhushan have urged that the  Act should  be read in the manner canvassed by them and  if  the same is not so read then the same would be violative of  the fundamental  rights of the victims, and as such  unconstitu- tional.  The learned Attorney General assisted by Mr.  Gopal Subramanium  has  on the other hand urged that  the  Act  is valid and constitutional and that the settlement arrived  at on 14th/15th February is proper and valid.     26.  In  order to appreciate the background  Ms.  Indira Jaising  placed before us the proceedings of the  Lok  Sabha wherein Mr. Veerendra Patil, the Hon’ble Minister, stated on March 27, 1985 that the tragedy that had occurred in  Bhopal on  2nd and 3rd December, 1984 was unique and  unprecedented in character and magnitude not only for our country but  for the entire world. It was stated that one of 631 the  options  available  was to settle the  case  in  Indian courts.  The  second one was to file the cases  in  American courts.  Mr. Patil reiterated that the Govt. wanted to  pro- ceed  against the parent company and also to appoint a  Com- mission of Inquiry.     27. Mr. Garg in support of the proposition that the  Act was  unconstitutional, submitted that the Act must be  exam- ined  on  the touchstone of the fundamental  rights  on  the basis of the test laid down by this court in state of Madras v. V.G, Row, [1952] SCR 597, There at page 607 of the report this  Court has reiterated that in considering the  reasona- bleness of the law imposing restrictions on the  fundamental rights,  both the substantive and the procedural aspects  of the  impugned  restrictive law should be examined  from  the point of view of reasonableness. And the test of reasonable- ness,  wherever prescribed, should be applied to each  indi- vidual Statute impugned, and no abstract standard or general pattern of reasonableness can be laid down as applicable  to all  cases.  The nature of the right alleged  to  have  been infringed,  the underlying purpose of the  restrictions  im- posed,  the  extent  and urgency of the evil  sought  to  be remedied  thereby, the disproportion of the imposition,  the prevailing conditions at the time, should all enter into the judicial  verdict.  (The emphasis supplied).  Chief  Justice Patanjali Sastri reiterated that in evaluating such  elusive factors and forming their own conception of what is reasona- ble, in the circumstances of a given case, it is  inevitable that  the social philosophy and the scale of values  of  the judges participating in the decision would play an important role.     28. Hence, whether by sections, 3, 4 & 11 the rights  of the  victims and the citizens to fight for their own  causes and  to  assert their own grievances have  been  taken  away

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validly  and  properly, must be judged in the light  of  the prevailing  conditions at the time, the nature of the  right of  the  citizen, the purpose of the restrictions  on  their rights  to sue for enforcement in the courts of law  or  for punishment for offences against his person or property,  the urgency and extent of the evils sought to be remedied by the Act,  and the proportion of the impairment of the rights  of the  citizen  with  reference to the  intended  remedy  pre- scribed. According to Mr. Garg, the present position  called for a comprehensive appreciation of the national and  inter- national  background  in which precious rights to  life  and liberty were enshrined as fundamental rights and remedy  for them  was also guaranteed under Article 32 of the  Constitu- tion. He sought to urge that multinational corporations have assumed  powers or potencies to override the  political  and economic independence of the sovereign nations which have 632 been used to take away in the last four decades, much wealth out  of the Third World. Now these are plundered  much  more than what was done to the erstwhile colonies by  imperialist nations  in  the last three centuries of foreign  rule.  The role of courts in cases of conflict between rights of  citi- zens  and the vast economic powers claimed by  multinational corporations  to deny moral and legal liabilities for  their corporate  criminal activities should not be lost sight  of. He,  in  this background, urged  that  these  considerations assume  immense importance to shape human  fights  jurispru- dence  under  the Constitution, and for the Third  World  to regulate  and  control the power and economic  interests  of multinational corporations and the power of exploitation and domination  by developed nations without submitting  to  due observance  of  the  laws of the  developing  countries.  It therefore  appears  that the production of, or  carrying  on trade in dangerous chemicals by multinational industries  on the  soil  of Third World countries call for  strictest  en- forcement  of constitutional guarantees for  enjoying  human fights  in free India, urged Mr. Garg. In  this  connection, our attention was drawn to the Charter of Universal Declara- tion of Human Rights. Article 1 of the Universal Declaration of  Human Rights, 1948 reiterates that all human-beings  are born free and equal in dignity and rights. Article 3  states that  everyone  has right to life, liberty and  security  of person.  Article 6 of the Declaration states  that  everyone has  the right to recognition everywhere as a person  before the law. Article 7 states that all are equal before the  law and are entitled without any discrimination to equal protec- tion  of  the  law. All are  entitled  to  equal  protection against  any discrimination in violation of the  Declaration of Human Rights and against any incitement to such discrimi- nation.  Article 8 states that everyone has the right to  an effective  remedy  by competent National Tribunal  for  acts violating  fundamental rights guaranteed to him by the  Con- stitution or by the law. It is, therefore, necessary to bear in  mind  that Indian citizens have a fight  to  live  which cannot be taken away by the Union of India or the Govt. of a State, except by a procedure which is just, fair and reason- able. The right to life includes the fight to protection  of limb against mutilation and physical injuries, and does  not mean merely the fight to breathe but also includes the fight to livelihood. It was urged that this right is available  in all its dimension till the last breath against all  injuries to  head, heart and mind or the lungs affecting the  citizen or his next generation or of genetic disorders. The enforce- ment  of  the right to life or limb calls for  adequate  and appropriate  reliefs  enforceable in courts of  law  and  of

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equity with sufficient power to offer adequate deterrence in all  cases  of  corporate criminal  liability  under  strict liability, absolute liability, punitive liability and crimi- nal prosecution and 633 punishment to the delinquents. The damages awarded in  civil jurisdiction  must  be  commensurate  to  meet  well-defined demands  of  evolved human rights  jurisprudence  in  modern world.  It  was,  therefore, submitted  that  punishment  in criminal jurisdiction for serious offences is independent of the  claims enforced in civil jurisdiction and  no  immunity against it can be granted as part of settlement in any civil suit.  If any Act authorises or permits doing of  the  same, the  same  will be unwarranted by law and as such  bad.  The Constitution of India does not permit the same.     29. Our attention was drawn to Article 21 of the Consti- tution  and  the principles of international law.  Right  to equality is guaranteed to every person under Art. 14 in  all matters  like the laws of procedure for enforcement  of  any legal  or constitutional right in every  jurisdiction,  sub- stantive  law defining the rights expressly or by  necessary implications, denial of any of these rights to any class  of citizens in either field must have nexus with  constitution- ally  permissible object and can never be  arbitrary.  Arbi- trariness  is,  therefore,  anti-thetical to  the  right  of equality.  In  this connection, reliance was placed  on  the observations of this Court in E.P. Royappa v. State of Tamil Nadu & Anr., [1974] 2 SCR 348 and Maneka Gandhi v. Union  of India, [1978] 2 SCR 621 where it was held that the view that Articles 19 & 21 constitute watertight compartments has been rightly overruled. Articles dealing with different fundamen- tal rights contained in Part III of the Constitution do  not represent  entirely separate streams of rights which do  not mingle  at  any  point of time. They. are all  parts  of  an integrated scheme in the Constitution and must be  preserved and cannot be destroyed arbitrarily. Reliance was placed  on the  observations  in R.D. Shetty v. The I.A.A. of  India  & Ors.,  [1979] 3 SCR 1014. Hence, the rights of the  citizens to fight for remedies and enforce their rights flowing  from the  breach  of  obligation in respect of  crime  cannot  be obliterated. The Act and Sections 3, 4 & 11 of the Act in so far  as  these purport to do so and have  so  operated,  are violative  of Articles 14, 19(1)(g) and 21 of the  Constitu- tion. The procedure envisaged by the said Sections  deprives the just and legitimate rights of the victims to assert  and obtain  their just dues. The rights cannot be so  destroyed. It was contended that under the law the victims had right to ventilate their rights.     30.  It was further contended that Union of India was  a joint tort-feasor along with UCC and UCIL. It had negligent- ly  permitted  the establishment of such a  factory  without proper safeguards exposing the victims and citizens to great danger. Such a person or authority 634 cannot be entrusted to represent the victims by denying  the victims  their rights to plead their own cases. It was  sub- mitted  that  the  object of the Act was  to  fully  protect people  against  the disaster of highly  obnoxious  gas  and disaster  of unprecedented nature. Such an object cannot  be achieved  without enforcement of the criminal  liability  by criminal  prosecution.  Entering  into  settlement   without reference to the victims was, therefore, bad and unconstitu- tional,  it was urged. If an Act, it was submitted,  permits such  a settlement or deprivation of the rights of the  vic- tims, then the same is bad.

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   31.  Before we deal with the various  other  contentions raised in this case, it is necessary to deal with the appli- cation for intervention and submission made on behalf of the Coal  India  in Writ Petition No. 268/89  wherein  Mr.  L.N. Sinha in his written submission had urged for the intervener that  Article  21 of the Constitution  neither  confers  nor creates  nor determines the dimensions nor  the  permissible limits  of restrictions which appropriate legislation  might impose  on the right to life or liberty. He  submitted  that provisions  for procedure are relevant in judicial or  quasi judicial  proceedings for enforcement of rights  or  obliga- tions.  With  regard to alteration of rights,  procedure  is governed  by the Constitution directly. He sought to  inter- vene on behalf of Coal India and wanted these submissions to be  taken into consideration. However, when this  contention was  sought  to be urged before this Court  on  25th  April, 1989, after hearing all the parties, it appeared that  there was  no  dispute  between the parties in  the  instant  writ petitions  between the victims and the Government  of  India that  the  rights claimed in these cases are  referrable  to Article 21 of the Constitution. Therefore, no dispute really arises  with regard to the contention of Coal India  and  we need  not  consider the submissions urged by Shri  Sinha  on behalf  of the intervener in this case. It has been  so  re- corded.     32.  By the order dated 3rd March, 1989, Writ  Petitions Nos. 268/89 and 164/86 have been directed to be disposed  of by this Bench.’ We have heard these two writ petitions along with the other writ petitions and other matters as indicated hereinbefore.  The contentions are common. These writ  peti- tions  question the validity of the Act and  the  settlement entered  into pursuant to the Act. Writ Petition No.  164/86 is  by one Shri Rakesh Shrouti who is an Indian citizen  and claims  to be a practising advocate having his residence  at Bhopal.  He  says  that he and his family  members  were  at Bhopal on 2nd/3rd December, 1984 and suffered immensely as a result  of the gas leak. He challenges the validity  of  the Act on various grounds. He contends that the Union of  India should not have the exclusive right to represent the 635 victims  in  suits  against the Union  Carbide  and  thereby deprive the victims of their right to sue and deny access to justice.  He  further challenges the right of the  Union  of India to represent the victims against Union Carbide because of conflict of interests. The conduct of the Union of  India was  also  deprecated and it was further  stated  that  such conduct  did  not inspire confidence. In the  premises,  the said petitioner sought a declaration under Article 32 of the Constitution  that  the Act is void, inoperative  and  unen- forceable  as violative of Articles 14, 19 & 21 of the  Con- stitution- Similarly, the second writ petition, namely, writ petition  No. 268/89 which is filed by Sh. Charan Lal  Sahu, who  is also a practising Advocate on behalf of the  victims and  claims to have suffered damages as a result of the  gas leak. challenges the Act. He further challenges the  settle- ment  entered  into  under the Act. He says  that  the  said settlement  was violative of principles of  natural  justice and  the fundamental right of the said petitioner and  other victims.  It is his case that in so far as the  Act  permits such a course to be adopted, such a course was not permissi- ble  under  the Constitution. He further  asserts  that  the Union of India was negligent and a joint tort-feasor. In the premises,  according to him, the Act is bad, the  settlement is bad and these should be set aside.     33.  In order to determine the question whether the  Act

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in question is constitutionally valid or not in the light of Articles  14,  19(l)(g) and 21 of the  Constitution,  it  is necessary  to find out what does the Act actually  mean  and provide for. The Act in question, as the Preamble to the Act states, was passed in order to confer powers on the  Central Government  to  secure that the claims arising  out  of,  or connected with, the Bhopal gas leak disaster are dealt  with speedily,  effectively, equitably and to the best  advantage of the claimants and for matters incidental thereto.  There- fore,  securing the claims arising out of or connected  with the  Bhopal gas leak disaster is the object and  purpose  of the Act. We have noticed the proceedings of the Lok Sabha in connection with the enactment of the Act. Our attention  was also  drawn by the learned Attorney General to the  proceed- ings  of the Rajya Sabha wherein the Hon’ble Minister,  Shri Virendra  Patil explained that the bill enabled the  Govern- ment to assume exclusive right to represent and act, whether within  or  outside India in place of every person  who  had made or was entitled to make claim in relation to the disas- ter and to institute any suit or other proceedings or  enter into  any  compromise  as mentioned in the  Act.  The  whole object  of  the Bill was to make procedural changes  to  the existing  Indian law which would enable the Central  Govern- ment to take up the responsibility of fighting litigation on behalf of these victims. The first point was that it 636 sought to create a locus standi in the Central Government to file  suits  on  behalf of the victims. The  object  of  the Statute. it was highlighted, was that because of the  dimen- sion  of  the tragedy covering thousands  of  people,  large number  of whom being poor, would not be able to go  to  the courts,  it was necessary to create the locus standi in  the Central  Government to start the litigation for  payment  of compensation  in  the  courts on their  behalf.  The  second aspect of the Bill was that by creating this locus standi in the Central Government, the Central Government became compe- tent  to institute judicial proceedings for payment of  com- pensation  on behalf of the victims. The next aspect of  the Bill was to make a distinction between those on whose behalf suits  had  already  been filed and those  on  whose  behalf proceedings  had  not yet then been instituted. One  of  the Members  emphasised that under Article 21 of  the  Constitu- tion,  the personal liberty of every citizen was  guaranteed and it has been widely interpreted as to what was the  mean- ing of the expression ’personal liberty’. It was  cmphasised that  one  could not take away the right of  a  person,  the liberty  of a person, to institute proceedings for  his  own benefit  and  for his protection. It is from this  point  of view that it was necessary, the member debated, to  preserve the right of a claimant to have his own lawyers to represent him  along  with the Central Government in  the  proceedings under Section 4 of the Act, this made the Bill constitution- ally valid.     34. Before we deal with the question of constitutionali- ty,  it has to be emphasised that the Act in question  deals with  the  Bhopal gas leak disaster and it  deals  with  the claims  meaning thereby claims arising out of  or  connected with  the disaster for compensation of damages for  loss  of life  or any personal injury which has been or is likely  to be  caused and also claims arising out of or connected  with the  disaster  for  any damages to property  or  claims  for expenses incurred or required to be incurred for  containing the  disaster or making or otherwise coping with the  impact of  the  disaster and other incidental claims.  The  Act  in question does not purport to deal with the criminal liabili-

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ty, if any, of the parties or persons concerned nor it deals with any of the consequences flowing from those. This  posi- tion  is clear from the provisions and the Preamble  to  the Act.  Learned Attorney General also says that the  Act  does not cover criminal liability. The power that has been  given to  the  Central Government is to  represent  the  ’claims’, meaning thereby the monetary claims. The monetary claims, as was  argued  on behalf of the victims, are  damages  flowing from the gas disaster. Such damages, Mr. Garg and Ms.  Jais- ing  submitted,  are  based on  strict  liability,  absolute liability  and punitive liability. The Act does not,  either expressly or impliedly, deal with the extent of the  damages or 637 liability.  Neither  section 3 nor any other  section  deals with any consequences of criminal liability. The  expression "the Central Government shall, and shall have the  exclusive right to, represent, and act in place of (whether within  or outside India) every person who has made, or is entitled  to make, a claim for all purposes connected with such claim  in the same manner and to the same effect as such person", read as  it is, means that Central Government is substituted  and vested  with  the  exclusive right to act in  place  of  the victims,  i.e.,  eliminating the victims,  their  heirs  and their  legal representatives, in respect of all such  claims arising out of or connected with the Bhopal gas leak  disas- ter.  The  right,  therefore, embraces  right  to  institute proceedings  within  or outside India along  with  right  to institute  any  suit or other proceedings or to  enter  into compromise.  Sub-section 1 of section 3 of the  Act,  there- fore,  substitutes  the Central Government in place  of  the victims.  The victims, or their heirs and legal  representa- tives,  get their rights substituted in the Central  Govern- ment  along  with the concomitant right  to  institute  such proceedings,  withdraw such proceedings or suit and also  to enter into compromise.The victims or the heirs or the  legal representatives  of the victims, are substituted  and  their rights are vested in the Central Government. This happens by operation of section 3 which is the legislation in question. Sub-section (3) of section 3 makes it clear that the  provi- sions  of sub-section (1) of section 3 shall also  apply  in relation  to claims in respect of which suits or other  pro- ceedings  have  been instituted in or before  any  court  or other authority (whether within or outside India) before the commencement  of  this Act, but makes a distinction  in  the case  of any such suit or other proceeding with  respect  to any  claim  pending immediately before the  commencement  of this  Act in or before any court or other authority  outside India, and provides that the Central Government shall repre- sent, and act in place of, or along with, such claimant,  if such  court  or other authority so  permits.  Therefore,  in cases  where such suits or proceedings have been  instituted before  the commencement of the Act in any court  or  before any  authority outside India, the section by its  own  force will not come into force in substituting the Central Govern- ment  in  place of the victims or the heirs or  their  legal representatives,  but the Central Government has been  given the right to act in place of, or along with, such  claimant, provided such court or other authority so permits. It is  to have  adherence  and conformity with the  procedure  of  the countries  or places outside India, where suits or  proceed- ings  are to be instituted or have been  instituted.  There- fore, the Central Government is authorised to act along with the  claimants in respect of proceedings instituted  outside India  subject to the orders of such courts or the  authori-

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ties. Is such a right valid and proper? 638     35. There is the concept known both in this country  and abroad,  called "parens patriae. Dr. D.K. Mukherjea  in  his "Hindu  Law of Religious and Charitable Trusts", Tagore  Law Lectures,  Fifth  Edition,  at page 404,  referring  to  the concept  of parens patriae, has noted that in  English  Law, the Crown as parens patriae is the constitutional  protector of  all property subject to charitable trusts,  such  trusts being essentially matters of public concern. Thus the  posi- tion  is  that according to Indian  concept  parens  patriae doctrine  recognized King as the protector of  all  citizens and  as  parent. In Budhakaran Chankhani  v.  Thakur  Prasad Shah,  AIR 1942 Cal. 311 the position was explained  by  the Calcutta  High  Court at page 3 18 of the report.  The  same position  was reiterated by the said Court in  Banku  Behary Mondal  v. Banku Behary Hazra & Anr., AIR 1943 Cal.  203  at page 205 of the report. The position was further  elaborated and  explained by the Madras High Court in Medai Dalavoi  T. Kumaraswami  Mudaliar  v. Medai Dalavoi Rajammal,  AIR  1957 Mad.  563 at page 567 of the report. This Court also  recog- nized the concept of parens patriae relying on the  observa- tions of Dr. Mukherjea aforesaid in Ram Saroop v. S.P. Sahi, [1959] 2 Supp. SCR 583, at pages 598 and 599. In the  "Words and  Phrases"  Permanent edition, Vol. 35 at p.  99,  it  is stated that parens patriae is the inherent power and author- ity of a Legislature to provide protection to the person and property of persons non suijuris, such as minor, insane, and incompetent persons, but the words "parens patriae"  meaning thereby ’the father of the country’, were applied originally to the King and are used to designate the State referring to its  sovereign  power  of guardianship  over  persons  under disability,  (Emphasis supplied). Parens  patriae  jurisdic- tion,  it has been explained, is the right of the  sovereign and  imposes  a duty on sovereign, in  public  interest,  to protect  persons under disability who have no rightful  pro- tector. The connotation of the term "parens patriae" differs from country to country, for instance, in England it is  the King,  in America it is the people, etc. The  Government  is within  its  duty to protect and to  control  persons  under disability.  Conceptually, the parens patriae theory is  the obligation of the State to protect and take into custody the rights  and the privileges of its citizens  for  discharging its  obligations. Our Constitution makes it  imperative  for the  State to secure to all its citizens the rights  guaran- teed by the Constitution and where the citizens are not in a position  to assert and secure their rights, the State  must come  into picture and protect and fight for the  rights  of the  citizens. The Preamble to the Constitution,  read  with the  Directive Principles, Articles 38, 39 and  39A  enjoins the  State  to  take up these responsibilities.  It  is  the protective  measure  to which the social  welfare  state  is committed.  It  is  necessary for the State  to  ensure  the funda- 639     mental rights in conjunction with the Directive  Princi- ples of State   Policy to effectively discharge its  obliga- tion  and for this purpose, if   necessary, to deprive  some rights  and  privileges of the individual victims  or  their heirs  to  protect  their rights  better  and  secure  these further.  Reference  may be made to Alfred L. Snapp  &  Son, Inc. v. Puerto Rico, 458 US 592, 73 L. Ed. 2d 995, 1028. Ct, 3260  in this connection. There it was held by  the  Supreme Court  of the United States of America that Commonwealth  of Puerto  have  standing to sue as parens  patriae  to  enjoin

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apple  growers’ discrimination against  Puerto Rico  migrant farm workers. This case illustrates in some aspect the scope of  ’parens patriae’. The Commonwealth of Puerto  Rico  sued in the United States District Court for the Western District of Virginia, as parens patriae for Puerto Rican migrant farm workers,  and  against  Virginia apple  growers,  to  enjoin discrimination  against Puerto Ricans in favour of  Jamaican workers  in  violation  of the Wagner-Peyser  Act,  and  the Immigration  and  Nationality Act. The District  Court  dis- missed  the  action  on the  ground  that  the  Commonwealth lacked  standing  to sue, but the Court of  Appeal  for  the Fourth Circuit reversed it. On certiorari, the United States Supreme  Court affirmed. In the opinion by White, J.  joined by  Burger, Chief Justice and Brennan,  Marshall,  Blackman, Rennquist,  Stevens,  and O’Connor, JJ., it  was  held  that Puerto  Rico  had a claim to represent its  quasi  sovereign interests  in federal court at least which was as strong  as that  of any State, and that it had parens patriae  standing to sue to secure its   residents from the harmful effects of discrimination  and to obtain full  and equal  participation in the federal employment service scheme established  pursu- ant to the Wagner-Peyser Act and the Immigration and Nation- ality Act of 1952. Justice White referred to the meaning  of the  expression "parens patriae". According to  Black’s  Law Dictionary, 5th Edition 1979, page 1003, it means  literally ’parent of the country’ and refers traditionally to the role of  the State as a sovereign and guardian of  persons  under legal disability. Justice White at page 1003  of the  report emphasised  that the parens patriae action had its roots  in the common-law concept of the "royal prerogative". The royal prerogative  included  the right or responsibility  to  take care  of  persons  who were legally unable,  on  account  of mental incapacity, whether it  proceeds from nonage, idiocy, or  lunacy  to  take proper care  of  themselves  and  their property. This prerogative of parens patriae is inherent  in the  supreme  power of every state, whether  that  power  is lodged in a royal person or m the legislature and is a  most beneficent function. After discussing several cases  Justice White  observed at page 1007 of the report that in order  to maintain an action, in parens patriae, the state must artic- ulate an interest apart from the interests of 640 particular  parties,  i.e.  the State must be  more  than  a nominal  party.  The State must  express  a  quasi-sovereign interest. Again an instructive insight can be obtained  from the  observations of Justice Holmes of the American  Supreme Court in the case of Georgia v. Tennessee Copper Co., 206 US 230, 51 L.Ed. 1038, 27 S Ct 618, which was a case  involving air pollution in Georgia caused by the discharge of  noxious gases  from  the  defendant’s plant  in  Tennessee.  Justice Holmes  at  page 1044 of the report  described  the  State’s interest as follows:               "This is a suit by a State for an injury to it               in  its capacity of quasi-sovereign.  In  that               capacity the State has an interest independent               of  and behind the titles of its citizens,  in               all  the earth and air within its  domain.  It               has the last word as to whether its  mountains               shall  be  stripped of their forests  and  its               inhabitants  shall breathe pure air. It  might               have to pay individuals before it could  utter               that  word,  but  with it  remains  the  final               power  ......                         .....   When  the  States  by  their               union  made the forcible abatement of  outside

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             nuisances  impossible  to each, they  did  not               thereby  agree to submit to whatever might  be               done. They did not renounce the possibility of               making  reasonable  demands on the  ground  of               their  still remaining quasi-sovereign  inter-               ests"     36. Therefore, conceptually and from the jurisprudential point of view, especially in the background of the  Preamble to  the Constitution of India and the mandate of the  Direc- tive  Principles, it was possible to authorise  the  Central Government  to take over the claims of the victims to  tight against  the  multinational Corporation in  respect  of  the claims.  Because  of the situation the  victims  were  under disability in pursuing their claims in the circumstances  of the  situation  fully and properly. On its plain  terms  the State  has taken over the exclusive right to  represent  and act in place of every person who has made or is entitled  to make  a claim for all purposes connected with such claim  in the  same  manner  and to the same effect  as  such  person. Whether such provision is valid or not in the background  of the  requirement of the Constitution and the Code  of  Civil Procedure, is another debate. But there is no prohibition or inhibition, in our opinion, conceptually or jurisprudential- ly for Indian State taking over the claims of the victims or for  the State acting for the victims as the Act has  sought to provide. The actual meaning of what the Act has  provided and the validity thereof, however, will have to be  examined in  the light of the specific submissions advanced  in  this case. 641     37.  Ms.  Indira Jaising as  mentioned  hereinbefore  on behalf  of  some  other victims drew out  attention  to  the background  of the passing of the Act in question. She  drew our attention to the fact that the Act was to meet a specif- ic  situation that had arisen after the tragic disaster  and the  advent  of American lawyers seeking  to  represent  the victims in American courts. The Government’s view, according to  her, as was manifest from the Statement of  Objects  and Reasons, debates of the Parliament, etc. was that the inter- ests  of  the victims would be best served  if  the  Central Government  was given the right to represent the victims  in the  courts  of  United States as they  would  otherwise  be exploited  by  ’ambulance-chasers’  working  on  contingency fees. The Government also proceeded initially on the hypoth- esis  that US was the most convenient forum in which to  sue UCC.  The Government however feared that it might  not  have locus  standi to represent the victims in the courts of  the United  States of America unless a law was passed to  enable it  to sue on behalf of the victims. The dominant object  of the  Act,  therefore, according to her, was to give  to  the Government  of  India locus Standi to sue on behalf  of  the victims in foreign jurisdiction, a standing which it  other- wise would not have had. According to her, the Act was never intended to give exclusive rights to the Central  Government to sue on behalf of the victims in India or abroad. She drew our  attention  to the parliamentary  debates  as  mentioned hereinbefore.  She  drew  our attention  to  the  expression ’parens  patriae’  as appearing in the  Words  and  Phrases, Volume  31  p. 99. She contends that the Act was  passed  to provide locus standi only to represent in America. She  drew our  attention to the "American Constitutional Law  by  Lau- rence B. Trioe, 1978 Edition at paragraph 3.24, where it was stated  that  in  its capacity as proprietor,  a  state  may satisfy the requirement of injury to its own interests by an assertion  of  harm  to the state as such.  It  was  further

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stated  by the learned author there that the State  may  sue under the federal anti-trust laws to redress wrongs suffered by it as the owner of a railroad and as the owner and opera- tor  of various public institutions. It was emphasised  that in its quasi-sovereign capacity, the state has an  interest, independent of and behind the titles of its citizens, in all the  earth  and air within its domain. It was sought  to  be suggested  that in the instant Act no such right was  either asserted or mentioned. The State also in its quasi-sovereign capacity  is entitled to bring suit against a private  indi- vidual  to  enjoin a corporation not  to  discharge  noxious gases  from  its out of state plant into the  suing  state’s territory. Finally, it was emphasised that as ’parens  patr- iae’ on behalf of the citizens, where a state’s capacity  as parens patriae is not negated by the federal structure,  the protection  of the general health, comfort, and  welfare  of the  state’s  inhabitants has been held to  give  the  state itself a sufficient 642 interest.  Ms. Jaising sought to contend that to the  extent that  the Act was not confined to empowering the  Government to  sue  on  behalf of those who were not  sui  generis  but extended  also to representing those who are, this  exercise of the power cannot be referrable to the doctrine of ’parens patriae’. To the extent, it is not confined in enabling  the Government to represent its citizens in foreign jurisdiction but empowered it to sue in local courts to the exclusion  of the victims it cannot be said to be in exercise of  doctrine of  ’parens  patriae’, according to her. We  are  unable  to agree.  As we have indicated before conceptually and  juris- prudentially  there is no warrant in the background  of  the present  Act,  in the light of circumstances of the  Act  in question to confine the concept into such narrow field.  The concept can be varied to enable the Government to  represent the  victims effectively in domestic forum if.the  situation so  warrants. We also do not find any reason to confine  the ’parens  patriae’ doctrine to only quasisovereign  right  of the  State independent of and behind the title of the  citi- zens, as we shall indicate later.     38.  It  was further contended that deprivation  of  the rights  of the victims and denial of the rights of the  vic- tims or the fights of the heirs of the victims to access  to justice was unwarranted and unconstitutional. She  submitted that it has been asserted by the Government that the Act was passed  pursuant  to Entry 13 of the List I of  the  Seventh Schedule  to  the Constitution. It was  therefore  submitted that to the extent it was a law relating to civil procedure, it sets up a different procedure for the Bhopal gas  victims and denies to them equality before law, violating Article 14 of the Constitution. Even assuming that due to the magnitude of the disaster, the number of claimants and their disabili- ty they constituted a separate class and that it was permis- sible  to enact a special legislation setting up  a  special procedure for them, the reasonableness of the procedure  has still  to be tested. Its reasonableness, according  to  her, will  have  to be judged on the touchstone of  the  existing Civil Procedure Code of 1908 and when so tested, it is found wanting  in several respects. It was also contended  by  the Government that it was a legislation relating to "actionable wrongs" under Entry 8 of the Concurrent List of the  Seventh Schedule. But so read, she said, it could only deal with the procedural  aspects and not the substantive aspect  of  "ac- tionable  wrongs". If it does, then the reasonableness of  a law  must be judged with reference to the existing  substan- tive law of actionable wrongs and so judged it is in  viola-

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tion of many constitutional rights as it takes away from the victims the right to sue for actionable wrongs according  to counsel for the victims. According to her, it fails to  take into account the law of strict liability for ultra 643 hazardous  activity as clarified by this Court in M.C.  Meh- ta’s,  case (supra). She further submitted that it is a  bad Act as it fails to provide for the right to punitive damages and destruction of environment.     39. It was contended on behalf of the Central Government that  the  Act was passed to give effect  to  the  Directive Principle  as enshrined under Article 39-A of the  Constitu- tion of India. It was, on the other side, submitted that  it is not permissible for the State to grant legal aid on  pain of  destroying rights that inhere in citizens or on pain  of demanding  that the citizens surrender their rights  to  the State. The Act in fact demands a surrender of rights of  the citizens to the State. On the interpretation of the Act, Ms. Indira  Jaising  submitted that sections 3 and  4  as  noted above,  give exclusive power to the Government to  represent the  victims and there is deprivation of the victims’  right to sue for the wrongs done to them which is uncanalised  and unguided and the expression "due regard" in section 4 of the Act  does  not imply consent and as such  violative  of  the rights  of the victims. The right to be associated with  the conduct  of  the suit is hedged in with so  many  conditions that it is illusory. According to her, a combined reading of sections 3 and 4 of the act lead to the conclusion that  the victims  are displaced by the Central Government  which  has constituted itself as the "surrogate" of the claimants, that they have no control over the proceedings, that they have no right  to decide whether or not to compromise and if  so  on what  terms and they have no right to be heard by the  court before any such compromise is effected. Therefore, section 3 read  with  section 4, according to her, hands over  to  the Government all effective rights of the victims to sue and is a  naked  usurption of power. It was submitted that  in  any event  on  a plain reading of the Act, section 3  read  with section  4 did not grant the Government immunity from  being sued as a joint tort-feasor.     40.  It was further urged that section 9 makes the  Gov- ernment the total arbitor in the matter of the registration, processing  and recording of claims. Reference was  made  to section  9(2)(a), (b) and (c) and disbursal of claims  under sections  9(2)(f) and 10. It was urged that the Deputy  Com- missioner  and Commissioner appointed under the Act and  the Scheme  are subordinates and agents of the  Central  Govern- ment. They replace impartial and independent civil court  by officers and subordinates of the Central Government.  Clause 11 of the Scheme makes the Central Government, according  to counsel,  judge  in its own cause inasmuch  as  the  Central Government could be and was in fact a joint tort-feasor.  It was submitted that sections 5 to 9 of the Act read with  the Scheme do not set up a machinery which is 644 constitutionally valid. The Act, it was urged, deprives  the victims of their rights out of all proportion to the  object sought  to be achieved, namely, to sue in foreign  jurisdic- tion  or to represent those incapable of representing  them- selves.  The  said object could be  achieved,  according  to counsel,  by limiting the right to sue in foreign  jurisdic- tion alone and in any event representing only those  victims incapable  of representing themselves. The victims who  wish to  sue for and on their own behalf must have power to  sue, all  proper  and necessary parties including  Government  of

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India,  Government  of Madhya Pradesh, UCIL and  Shri  Arjun Singh to vindicate their right to life and liberty and their rights cannot and should not be curtailed, it was submitted. Hence,  the  Act goes well beyond its  objects  and  imposes excessive restriction amounting to destruction of the rights of  the victims, according to. counsel. In deciding  whether any  rights  are affected, it is not the object of  the  Act that is relevant but its direct and inevitable effect on the rights of the victims that is material. Hence no matter  how laudable  the  object  of the Act is alleged to  be  by  the Government  of  India,  namely, that it is an  Act  to  give effect to Directive Principles enshrined in Article 39-A  of the  Constitution, the direct and inevitable effect of  sec- tion  3 according to counsel for the victims is  to  deprive the victims of the right to sue for and on their own  behalf through  counsel  of their choice and  instead  empower  the Central Government to sue for them.     41.  The  Act  is, it  was  contended,  unconstitutional because  it deprives the victims of their right to life  and personal liberty guaranteed by Article 21. The right to life and liberty includes the right to sue for violations of  the right, it was urged. The right to life guaranteed by Article 21 must be interpreted to mean all that makes life  livable, life in all its fullness. According to counsel, it  includes the right to livelihood. Reference was made to the  decision of Olga Tellis v. B.M.C., [1985] Supp. 2 SCR 51 at p. 78-83. This right, it was contended, is inseparable from the  reme- dy. It was urged that personal liberty includes a wide range of freedoms to decide how to order one’s affairs.  Reference was  made to Maneka Gandhi v. Union of India,  (supra),  The right to life and liberty also includes the right to healthy environment  free  from hazardous pollutants. The  right  to life and liberty, it was submitted, is inseparable from  the remedy  to  judicial vindication of the  violation  of  that right--the  right of access to justice must be deemed to  be part  of that right. Therefore, the importance is  given  to the right to file a suit for an actionable wrong. See  Ganga Bai  v. Vijay Kumar, [1974] 3 SCR 882 at 886.  According  to counsel  appearing  for the victims, the Act  read  strictly infringes the right to life and personal liberty because the right to sue by the affected person 645 for  damages  flowing from infringement of their  rights  is taken away. Thus, it was submitted that not just some  inci- dents of the right to life, but the right itself in all  its fullness  is  taken  away. Such  depravation,  according  to counsel,  of the right is not in accordance  with  procedure established by law inasmuch as the law which takes away  the right,  i.e.,  impugned  Act is  neither  substantively  nor procedurally  just, fair or reasonable. A law which  divests the  victims of the right to sue to vindicate for  life  and personal  liberty  and vests the said right in  the  Central Government is not just, fair or reasonable. The victims  are sui generis and able to decide for themselves how to  vindi- cate  their claims in accordance with law. There is,  there- fore,  no reason shown to exist for divesting them  of  that right and vesting that on the Central Government.     42. All the counsel for the victims have emphasised that vesting of the right in Central Government is bad and unrea- sonable  because there is conflict of interests between  the Central  Government and the victims. It was emphasised  that the conflict of interest has already prejudiced the  victims in  the conduct of the case inasmuch as a  compromise  unac- ceptable to the victims has been entered into in  accordance with  the  order of this Court of 14th/15th  February,  1989

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without heating the victims. This conflict of interest  will continue, it was emphasised, to adversely affect the victims inasmuch as section 9 of the Act read with clauses 5, 10 and 11  of the Scheme empower the Central Government to  process claims, determine the category into which these fall, deter- mine  the  basis on which damages will be  payable  to  each category and determine the amount of compensation payable to each  claimant.  Learned counsel urged that the right  to  a just, fair and reasonable procedure was itself a  guaranteed fundamental right under Article 14 of the Constitution. This included  right  to natural justice. Reference was  made  to Olga  Tellis’s.  case (supra) and S.L. Kapoor  v.  Jagmohan, [1981]  1 SCR 746 at 753, 766. The right to natural  justice is  included  in  Article 14 Tulsi Ram v.  Union  of  India, [1985]  Supp. 2 SCR 131. Reference was also made  to  Maneka Gandhi’s, case (supra). It was contended by counsel that the right  to natural justice is the right to be heard by  Court at the pre-decisional stage, i.e., before any compromise  is effected and accepted. Reference was made to the decision of this  Court in Swadeshi Cotton v. Union of India,  [1981]  2 SCR  533. It was submitted that natural justice is a  highly effective tool devised by the Courts to ensure that a statu- tory authority arrives at a just decision. It is  calculated to  act  as a healthy check on the abuse of  power.  Natural justice  is  not dispensable nor is it an  empty  formality. Denial of that right can and has led to the miscar- 646 riage of justice in this case. According to counsel, if  the victims  had  been given an opportunity to  be  heard,  they would,  inter alia, have pointed out that the amount  agreed to  be paid by UCC was hopelessly inadequate and  that  UCC, its officer and agents ought not to be absolved of  criminal liability, that the Central Government itself was liable  to have  been  sued as a joint tort-feasor  and,  according  to counsel,  had agreed to submit to a decree if  found  liable under  the order dated 31st December, 1985, that  suits  had been  filed against the State of Madhya Pradesh, Shri  Arjun Singh  and  UCIL which said suits cannot be deemed  to  have been settled by the compromise/order of 14th/15th  February, 1989. It was also pointed out that Union of India was  under a duty to sue UCIL, which it had failed and neglected to do. It  was submitted that to the extent that the  statute  does not provide for a pre-decisional hearing on the fairness  of the  proposed settlement or compromise by Court, it is  void as offending natural justice hence violative of Articles  14 and 21 of the Constitution. Alternatively, it was  contended by the counsel that since the statute neither expressly  nor by necessary implication bars the right to be heard by Court before  any  compromise is effected such a right to  a  pre- decisional  hearing  by  Court must  be  read  into  section 3(2)(b)  of the Act. Admittedly, it does not  expressly  ex- clude  the right to a hearing by Court prior to any  settle- ment being entered into. Far from excluding such a right  by necessary  implication, having regard to the nature  of  the rights affected, i.e., the right to life and personal liber- ty,  such  a right to hearing must be read into the  Act  in order to ensure that justice is done to the victims, accord- ing to all the counsel. The Act sets up a procedure  differ- ent from the ordinary procedure established by law,  namely, Civil  Procedure  Code. But it was submitted  that  the  Act should  be  harmoniously read with the provisions  of  Civil Procedure  Code  and if it is not so read, then the  Act  in question  would be unreasonable and unfair. In this  connec- tion, reliance was placed on the provisions of Order I, Rule 4,  Order 23, Rule 1 proviso, Order 23, Rule 3-9  and  Order

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32,  Rule 7 of CPC and it was submitted that these  are  not inconsistent with the Act. On the contrary these are  neces- sary and complementary, intended to ensure that there is  no miscarriage of justice. Hence these must be held to apply to the facts and circumstances of the case and the impugned Act must be read along with these provisions. Assuming that  the said  provisions  do  not directly  apply  then,  provisions analogous  to the said provisions must be read with  section 3(2)(b) to make the Act reasonable, it was submitted. It was urged that if these are not so read then the absence of such provisions  would vest arbitrary and unguided powers in  the Central Government making section 3(2)(b)  unconstitutional. The said provisions are intended to ensure the machinery of 647 accountability  to  the victims and to provide to  them,  an opportunity  to be heard by court before any  compromise  is arrived  at. In this connection, reference was made to  Rule 23(3)  of  the Federal Rules of Civil Procedure  in  America which provides for a hearing to the victims before a compro- mise  is  effected. The victims as plaintiffs in  an  Indian court cannot be subjected to a procedure which is less  fair than  that  provided by a US forum initially chosen  by  the Government of India, it was urged.     43.  Counsel  submitted  that Section 6 of  the  Act  is unreasonable  because it replaces an independent and  impar- tial  Civil  Court of competent jurisdiction by  an  Officer known  as  the Commissioner to be appointed by  the  Central Government. No qualification, according to counsel, had been prescribed for the appointment of a Commissioner and  clause 5  of the Scheme framed under the Act vests in  the  Commis- sioner the judicial function of deciding appeals against the order of the Deputy Commissioner registering or refusing  to register a claim. It was further submitted that clause 11(2) of  the Scheme is unreasonable because it replaces an  inde- pendent and impartial civil court of competent  jurisdiction with  the Central Government, which is a  joint  tort-feasor for the purpose of determining the total amount of compensa- tion  to be apportioned for each category of claims and  the quantum  of compensation payable for each type of injury  or loss. It was submitted that the said function is a  judicial function  and if there is any conflict of  interest  between the victims and Central Government, vesting such a power  in the  Central Government amounts to making it a judge in  its own cause. It was urged that having regard to the fact  that amount received in satisfaction of the claims is  ostensibly pre-determined, namely, 470 million dollars unless the order of  14th/15th February is set aside which ought to be  done, according  to counsel, the Central Government would  have  a vested interest in ensuring that the amount of damages to be disbursed  does not exceed the said amount. Even  otherwise, according to counsel, the Government of India has been  sued as  a  joint tort-feasor, and as they would  have  a  vested interest  in depressing the quantum of damages,  payable  to the  victims. This would, according to counsel, result in  a deliberate  under-estimation of the extent of  injuries  and compensation payable.     44. Clause 11(4) of the Scheme, according to counsel, is unreasonable  inasmuch as it does not take into account  the claims of the victims to punitive and exemplary damages  and damages  for  loss and destruction of  environment.  Counsel submitted  that  in  any event the  expression  "claims"  in section 2(b) cannot be interpreted to mean 648 claims  against the Central Government, the State of  Madhya Pradesh,  UCIL, which was not sued in suit No.  1113/86  and

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Shri  Arjun Singh, all of whom have been sued as joint  tort feasors  in  relation to the liability arising  out  of  the disaster. Counsel submitted that if section 3 is to be  held to  be intra vires, the word "exclusive" should  be  severed from  section 3 and on the other hand, if section 3 is  held ultra  vires, then victims who have already filed  suits  or those  who had lodged claims should be entitled to  continue their  own suits as well as Suit No. 1113/86  as  plaintiffs with  leave  under Order 1 Rule 8.  Counsel  submitted  that interim  relief as decided by this Court can be paid to  the victims  even  otherwise also, according to  counsel,  under clause 10(2)(b) of the Scheme.     45. Counsel submitted that the balance of $ 470  million after  deducting interim relief as determined by this  Court should be attached. In any event, it was submitted that,  it be  declared  that the word "claim" in section  2  does  not include  claims  against Central Govt. or  State  of  Madhya Pradesh or UCIL. Hence, it was urged that the rights of  the victims to sue the Government of India, the State of  Madhya Pradesh or UCIL would remain unaffected by the Act or by the compromise effected under the Act. Machinery to decide  suit expeditiously  has  to be devised, it was  submitted.  Other suits  filed against UCC, UCIL, State of Madhya Pradesh  and Arjun  Singh should to be transferred to the  Supreme  Court for trial and disposal, according to counsel. It was submit- ted  that the Court should fix the basis of damages  payable to  different  categories,  namely,  death  and  disablement mentioned under clause 5(2) of the scheme. Counsel submitted that this Court should set up a procedure which would ensure that  an  impartial judge assisted by  medical  experts  and assessors would adjudicate the basis on which an  individual claimant would fall into a particular category. It was  also urged that this Court should quantify the amount of  compen- sation  payable to each category of claimant in clause  5(2) of  the Scheme. This decision cannot, it was  submitted,  be left to the Central Government as is purported to be done by clause 11(2) of the Scheme.     This  Court  must  set up, it was urged,  a  trust  with independent trustees to administer the trust and trustees to be  accountable to this Court. An independent census  should be carried out of number of claimants, nature and extent  of injury  caused to them, the category into which  they  fall. Apportionment of amounts should be set aside or invested for future claimants, that is the category in clause 5(2)(a)  of the Scheme, which is, according to counsel, of utmost impor- tance 649 since the injuries are said to be. carcinogenic and ontogen- ic and wide affecting persons yet unborn.     47.  Shri  Garg, further and on behalf of  some  of  the victims  counsel,  urged before us that deprivation  of  the rights  of  the victims and vesting of those fights  in  the State is violative of the rights of the victims and  cannot. be  justified  or  warranted by  the  Constitution.  Neither section  3 nor section 4 of the Act gives any right  to  the victims;  on  the  other hand, it is a  complete  denial  of access  to justice for the victims, according to him.  This, according  to counsel, is arbitrary. He also submitted  that section  4 of the Act, as it stands, gives no right  to  the victims and as such even assuming that in order to fight for the  rights of the victims, it was necessary  to  substitute the  victims  even then in so far as the victims  have  been denied the right of say, in the conduct of the  proceedings, this  is disproportionate to the benefit conferred upon  the victims.  Denial  of rights to the victims is so  great  and

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deprivation  of the right to natural justice and  access  to justice  is  so tremendous that judged by the  well  settled principles by which yardsticks provisions like these  should be  judged in the constitutional framework of this  country, the  Act is violative of the fundamental rights of the  vic- tims. It was further submitted by him that all the rights of the  victims  by the process of this Act, the right  of  the victims to enforce full liability against the multinationals as well as against the Indian Companies, absolute  liability and criminal liability have all been curtailed.     48.  All  the counsel submitted that in any  event,  the criminal  liability  cannot be subject matter of  this  Act. Therefore,  the Government was not entitled to agree to  any settlement on the ground that criminal prosecution would  be withdrawn  and  this being a part of  the  consideration  or inducement  for settling the civil liability,  he  submitted that  the settlement arrived at on the  14th/l5th  February, 1989 as recorded in the order of this Court is wholly unwar- ranted, unconstitutional and illegal.     49.  Mr.  Garg additionally further urged  that  by  the procedure of the Act, each individual claim had to be  first determined  and  the  Government could only  take  over  the aggregate  of all individual claims and that could  only  be done  by aggregating the individual claims of  the  victims. That  was not done, according to him. Read in that  fashion, according  to  Shri Garg, the conduct of the  Government  in implementing the Act is wholly improper and unwarranted.  It was  submitted by him that the enforcement of the  fight  of the victims 650 without  a  just,  fair and reasonable  procedure  which  is vitally  necessary for representing the citizens or  victims was  bad.  It was further urged by him that the  Bhopal  gas victims  have  been singled out for  hostile  discrimination resulting  in total denial of all procedures of approach  to competent  courts and tribunals. It was submitted  that  the Central Government was incompetent to represent the  victims in the litigations or for enforcement of the claims. It  was then submitted by him that the claims of the victims must be enforced fully against the Union Carbide Corporation  carry- ing on commercial activities for profit resulting in unprec- edented gas leak disaster responsible for a large number  of deaths and severe injuries to others. It was submitted  that the  liability  of  each party  responsible,  including  the Government of India, which is a joint tort-feasor along with the  Union  Carbide, has to be  ascertained  in  appropriate proceedings. It was submitted on behalf of the victims  that Union of India owned 22% of the shares in Union Carbide  and therefore,  it  was incompetent to  represent  the  victims. There  was conflict of interest between the Union  of  India and the Union Carbide and so Central Government was incompe- tent.  It  is submitted that  pecuniary  interest  howsoever small disqualifies a person to be a judge in his own  cause. The settlement accepted by the Union of India, according  to various counsel is vitiated by the pecuniary bias as holders of its shares to the extent of 22%.     50. It was submitted that the pleadings in the court  of the United States and in the Bhopal court considered in  the context  of the settlement order of this Court  accepted  by the Union of India establish that the victims’ individuality were sacrificed wontedly and callously and, therefore, there was violation, according to some of the victims, both in the Act  and in its implementation of Articles 14, 19(l)(g)  and 21 of the Constitution.     51. The principles of the decision of this Court in M.C.

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Mehta & Anr. v. Union of India, [1987] 1 SCR 819 must be  so interpreted  that complete justice is done and it in no  way excludes the grant of punitive damages for wrongs justifying deterrents  to ensure the safety of citizens in free  India. No  multinational corporation, according to Shri  Garg,  can claim the privilege of the protection of Indian law to  earn profits  without  meeting  fully the demands  of  civil  and criminal  justice  administered  in India  with  this  Court functioning  as  the  custodian. Shri Garg  urged  that  the liability  for damages, in India and the Third  World  Coun- tries,  of  the multinational companies cannot be  less  but must be more because the persons affected are often  without remedy for 651 reasons of inadequate facilities for protection of health or property.  Therefore,  the  damages  sustainable  by  Indian victims  against the multinationals dealing  with  dangerous gases  without  proper security and other measures  are  far greater  than  damages  suffered by the  citizens  of  other advanced  and developed countries. It is, therefore,  neces- sary to ensure by damages and deterrent remedies that  these multinationals  are not tempted to shift dangerous  manufac- turing operations intended to advance their strategic objec- tives  of profit and war to the Third World  Countries  with little  respect  for the right to life and  dignity  of  the people  of  sovereign third world countries.  The  strictest enforcement  of punitive liability also serves the  interest of  the  American people. The Act, therefore,  according  to Shri Garg is clearly unconstitutional and therefore, void.     52.  It was urged that the settlement is without  juris- diction.  This  Court  was  incompetent  to  grant  immunity against criminal liabilities in the manner it has  purported to  do by its order dated 14th/l5th February, 1989,  it  was strenuously  suggested by counsel. It was further  submitted that to hold the Act to be valid, the victims must be  heard before the settlement and the Act can only be valid if it is so interpreted. This is necessary further, according to Shri Garg, to lay down the scope of heating. Shri Garg also  drew our attention to the scheme of disbursement of relief to the victims.  He  submitted that the scheme of  disbursement  is unreasonable  and discriminatory because there is no  proce- dure  which is just, fair and reasonable in accordance  with the provisions of Civil Procedure Code. He further submitted that  the Act does not lay down any guidelines for the  con- duct  of the Union of India in advancing the claims  of  the victims. There were no essential legislative guidelines  for determining  the rights of the victims, the conduct  of  the proceedings  on  behalf of the victims and for  the  relief- claimed. Denial of access to justice to the victims  through an impartial judiciary is so great a denial that it can only be  consistent  with the situation which calls  for  such  a drastic provision. The present circumstances were not  such. He  drew  our  attention to the decision of  this  Court  in Basheshar v. Income Tax Commissioner, AIR 1959 SC 149; in Re Special Courts Bill, [1979] 2 SCR 476; A.R. Antulay v.  R.S. Nayak  & Anr., [1988] 2 SCC 602; Ram Krishna Dalmia v.  Ten- dulkar,  [1955] SCR 279; Ambika Prasad Mishra etc. v.  State of U.P. & Ors. etc., [1960] 3 SCR 1159 and Bodhan  Chowdhary v.  State  of Bihar, [1955] 1 SCR 1045.  Shri  Garg  further submitted  that Article 21 must be read with Article  51  of the Constitution and other directive principles. He drew our attention to Lakshmi Kant Pandey v. Union of India, [1984] 2 SCR  795;  M/s  Mackinnon Machkenzie & Co.  Ltd.  v.  Audrey D’Costa 652

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and  Anr.,  [1987]  2 SCC 469; Sheela  Barse  v.  Secretary, Children  Aid  Society & Ors., [1987] 1 SCR 870.  Shri  Garg submitted  that in india, the national dimensions  of  human rights  and the international dimensions are both  congruent and  their enforcement is guaranteed under Articles  32  and 226  to the extent these are enforceable against the  State, these  are also enforceable against  transnational  corpora- tions inducted by the State on conditions of due  observance of  the  Constitution and all laws of the  land.  Shri  Garg submitted that in the background of an unprecedented  disas- ter  resulting in extensive damage to life and property  and the destruction of the environment affecting large number of people  and for the full protection of the interest  of  the victims  and  for complete satisfaction of  all  claims  for compensation,  the Act was passed empowering the  Government of  India  to  take necessary steps for  processing  of  the claims  and for utilisation of disbursal of the  amount  re- ceived in satisfaction of the claims. The Central Government was  given the exclusive right to represent the victims  and to  act  in place of, in United States or  in  india,  every citizen entitled to make a claim. Shri Garg urged that on  a proper reading of section 3(1) of the Act read with  section 4 exclusion of all victims for all purpose is incomplete and the  Act is bad. He submitted that the decree for  adjudica- tion  of the Court must ascertain the magnitude of the  dam- ages  and  should be able to grant reliefs required  by  law under  heads  of strict liability,  absolute  liability  and punitive liability.     53. Shri Garg submitted that it is necessary to consider that the Union of India is liable for the torts. In  several decisions to which Shri Garg grew our attention, it has been clarified that Government is not liable only if the tortious act  complained has been committed by its servants in  exer- cise  of  its sovereign powers bY which it is  meant  powers that  can be lawfully exercised under sovereign rights  only vide  Nandram  Heeralal v. Union of India & Anr.,  AIR  1978 M.P.  209 at p. 212. There is a real and marked  distinction between the sovereign functions of the government and  those which are non-sovereign and some of the functions that  fall in  the  latter  category are those  connected  with  trade, commerce,  business and industrial  undertakings.  Sovereign functions are such acts which are of such a nature as cannot be  performed by a private individual or association  unless powers are delegated by sovereign authority of state.     54.  According  to Shri Garg, the Union  and  the  State Governments  under the Constitution and as per laws  of  the Factories,  Environment Control, etc. are bound to  exercise control  on  the  factories in public  interest  and  public purpose. These functions are not sovereign func- 653 tions,  according to Shri Garg, and the Government  in  this case was guilty of negligence. In support of this, Shri Garg submitted that the offence of negligence on the part of  the Govt. would be evident from the fact that--               (a)  the Government allowed the Union  Carbide               factory  to be installed in the heart  of  the               city;               (b)  the Government allowed habitation in  the               front  of  the factory knowing that  the  most               dangerous and lethal gases were being used  in               the manufacturing processes;               (c)  the gas leakage from this factory  was  a               common affair and it was agitated continuously               by the people journalists and it was  agitated               in  the Vidhan Sabha right from 1980 to  1984.

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             These  features  firmly proved,  according  to               Shri  Garg,  the grossest  negligence  of  the               governments. Shri Garg submitted that the  gas               victims  had legal and moral right to sue  the               governments  and so it had full right  to  im-               plead  all  the necessary and  proper  parties               like  Union Carbide, UCIL, and also  the  then               Chief Minister Shri Arjun Singh of the  State.               He  drew our attention to Order 2, rule 3,  of               the  Civil Procedure Code. In suits  on  joint               torts,  according  to Shri Garg, each  of  the               joint  tort  feasors is  responsible  for  the               injury sustained for the common acts and  they               can  all  be sued together. Shri  Garg’s  main               criticism  has  been  that  the  most  crucial               question  of corporate responsibility  of  the               people’s  right  to life and  their  right  to               guard  it  as enshrined in Article 21  of  the               Constitution  were sought to be gagged by  the               Act.  Shri Garg tried to submit that this  was               an  enabling  Act only but not  an  Act  which               deprived the victims of their right to sue. He               submitted that in this Act, there is denial of               natural justice both in the institution  under               section 3 and in the conduct of the suit under               section  4.  It must be seen that  justice  is               done  to all (R. Viswanathan  v.  Rukh-ul-Mulk               Syed  Abdul  Wajid, [1963] 3 SCR 22).  It  was               urged that it was necessary to give a reasona-               ble  notice to the parties. He referred to  M.               Narayanan  Nambiar v. State of Kerala,  [1963]               Supp. 2 SCR 724.     55. Shri Shanti Bhushan appearing for Bhopal Gas  Peedit Mahila  Udyog Sangathan submitted that if the Act is  to  be upheld,  it has to be read down and construed in the  manner urged  by  him. It was submitted that when  the  Bhopal  Gas disaster took place, which was the worst industrial disaster in the world which resulted in the deaths 654 of  several thousands of people and caused serious  injuries to  lakhs others, there arose a right to the victims to  get not merely damages under the law of the torts but also arose clearly, by virtue of right to life guaranteed as  fundamen- tal  right by Article 21 of the Constitution a right to  get full  protection  of life and limb. This  fundamental  right also,  according  to Shri Shanti  Bhushan,  embodied  within itself  a right to have the claim adjudicated by the  estab- lished  courts  of  law. It is well settled  that  right  of access to courts in respect of violation of their  fundamen- tal  rights  itself is a fundamental right which  cannot  be denied  to  the people. Shri Shanti Bhushan  submitted  that there may be some justification for the Act being passed. He said that the claim against the Union Carbide are covered by the  Act.  The  claims of the victims  against  the  Central Government or any other party who is also liable under  tort to  the victims is not covered by the Act. The second  point that Shri Shanti Bhushan made was that the Act so far as  it empowered  the  Central Government to represent and  act  in place  of the victims is in respect of the  civil  liability arising  out of disaster and not in respect of any right  in respect of criminal liability. The Central Govt.,  according to  Shri Shanti Bhushan, cannot have any right or  authority in relation to any offences which arose out of the  disaster and  which resulted in criminal liability. It was  submitted that  there cannot be any settlement or compromise in  rela-

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tion  to non-compoundable criminal cases and in  respect  of compoundable  criminal  cases the legal  right  to  compound these  could only be possessed by the victims alone and  the Central  Government  could not compound  those  offences  on their  behalf. It was submitted by Shri Shanti Bhushan  that even  this Court has no jurisdiction whatsoever to  transfer any  criminal proceedings to itself either under any  provi- sion  of  the  Constitution or under any  provision  of  the Criminal Procedure Code or under any other provision of  law and,  therefore,  if the settlement in question  was  to  be treated not as a compromise but as an order of the Court, it would  be without jurisdiction and liable to be declared  so on  the principles laid down, according to Shri Bhushan,  by this  Court in Antulay’s case (supra). Shri  Shanti  Bhushan submitted that even if under the Act, the Central Government is  considered  to be able to represent the victims  and  to pursue the litigation on their behalf and even to enter into compromise on their behalf, it would be a gross violation of the  constitutional  rights of the victims to enter  into  a settlement with the Union Carbide without giving the victims opportunities  to express their views about the fairness  or adequacy  of  the settlement before any court  could  permit such a settlement to be made. 56. Mr. Shanti Bhushan submitted that the suit which may be 655 brought  by  the Central Government  against  Union  Carbide under  section  3  of the Act would be a suit  of  the  kind contemplated  by the Explanation to Order 23, rule 3 of  the Code  of Civil Procedure since the victims are  not  parties and yet the decree obtained in the suit would bind them.  It was, therefore, urged by Shri Shanti Bhushan that the provi- sions of Section 3(1) of the Act merely empowers the Central Government  to enter into a compromise but did not lay  down the procedure which was to be followed for entering into any compromise. Therefore, there is nothing which is  inconsist- ent  with the provisions of Order 23 Rule 3-B of the CPC  to which  the provisions Section 11 of the Act be applied.  If, however,  by any stretch of argument the provisions  of  the Act  could be construed so as to override the provisions  of Order  23 Rule 3-B CPC, it was urged, the same would  render the  provisions of the Act violative of the victims’  funda- mental rights and the actions would be rendered  unconstitu- tional. If it empowered the Central Government to compromise the victims’ rights, without even having to apply the  prin- ciples of natural justice, then it would be unconstitutional and  as  such bad. Mr. Shanti Bhushan, Ms. Jaising  and  Mr. Garg  submitted that these procedures must be  construed  in accordance  with the provisions contained in Order  23  Rule 3-B  CPC  and an opportunity must be given  to  those  whose claims  are being compromised to show to the court that  the compromise is not fair and should not accordingly be permit- ted  by  the court. Such a hearing in  terms,  according  to counsel,  of  Order  23 Rule 3-B CPC has to  be  before  the compromise  is  entered  into. It was  then  submitted  that section 3 of the Act only empowers the Central Government to represent  and act in place of the victims and to  institute suits on behalf of the victims or even to enter into compro- mise on behalf of the victims.     57. The Act does not create new causes of action  create special  courts.  The  jurisdiction of the  civil  court  to entertain suit would still arise out of section 9 of the CPC and  the substantive cause of action and the nature  of  the reliefs  available would also continue to remain  unchanged. The  only difference produced by the provisions of  the  Act would be that instead of the suit being filed by the victims

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themselves the suit would be filed by the Central Government on their behalf.     58.  Shri Shanti Bhushan then argued that the  cause  of action of each victim is separate and entitled him to  bring a suit for separate amount according to the damages suffered by him. He submitted that even where the Central  Government was empowered to file suits on behalf of all the victims  it could  only ask for a decree of the same kind as could  have been asked for by the victims themselves, namely, a 656 decree  awarding  various  specified  amounts  to  different victims  whose names had to be disclosed. According to  Shri Shanti  Bhushan, even if all the details were not  available at  the  time when the suit was filed, the  details  of  the victims’  damages  had to be procured and specified  in  the plaint  before a proper decree could be passed in the  suit. even if the subject matter of the suit had to be compromised between  the  Central Government and the Union  Carbide  the compromise  had to indicate as to what amount would be  pay- able  to each victim, in addition to the total amount  which was payable by Union Carbide, submitted Shri Shanti Bhushan. It  was  submitted that there was nothing in the  Act  which permitted  the Central Government to enter into any  general compromise  with  Union Carbide providing  for  the  lumpsum amount  without disclosure as to how much amount is  payable to each victim.     59.  If  the Act in question had not been  enacted,  the victims  would  have  been entitled to not  only  sue  Union Carbide themselves but also to enter into any compromise  or settlement of their claims with the Union Carbide immediate- ly.  The  provisions  of the Act, according  to  Mr.  Shanti Bhushan,  deprive the victims of their legal right and  such deprivation of their rights and creation of a  corresponding right in the Central Government can be treated as reasonable only  if  the deprivation of their rights imposed  a  corre- sponding liability on the Central Government to continue  to pay  such  interim relief to the victims as  they  might  be entitled  to  till the time that the Central  Government  is able  to  obtain the whole amount of compensation  from  the Union  Carbide.  He submitted that the  deprivation  of  the right  of the victims to sue for their claims and denial  of access to justice and to assert their claims and the substi- tution of the Central Government to carry on the  litigation for or on their behalf can only be justified, if and only if the  Central  Government  is enjoined to  provide  for  such interim relief or continue to provide in the words of  Judge Keenan,  as  a  matter of fundamental  human  decency,  such interim relief, necessary to enable the victims to fight the battle. Counsel submitted that the Act must be so read. Shri Shanti Bhushan urged that if the Act is construed in such  a manner  that  it did not create such an  obligation  on  the Central Government, the Act cannot be upheld as a reasonable provision when it deprived the victims of their normal legal rights  of  immediately obtaining  compensation  from  Union Carbide. He referred to section 10(b) of the Act and  clause 10  and  11(1) of the Scheme to show  that  the  legislative policy  underlying the Bhopal Act clearly contemplated  pay- ment of interim relief to the victims from time to time till such time as the Central Government was able to recover from Union Carbide 657 full  amount of compensation from which the interim  reliefs paid by the Central Government were to be deducted from  the amount  payable  to them by way of final  disbursal  of  the amounts recovered.

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   60.  The  settlement is bad, according  to  Shri  Shanti Bhushan if part of the bargain was giving up of the criminal liability against UCIL and UCC. Shri Shanti Bhushan  submit- ted that this Court should not hesitate to declare that  the settlement  is  bad  because the fight will go  on  and  the victims should be provided reliefs and interim  compensation by  the Central Government to be reimbursed ultimately  from the  amount to be realised by the Central  Government.  This obligation  was over and above the liability of the  Central Government as a joint tort-feasor, according to Shri  Shanti Bhushan.     61.  Shri Kailash Vasdev, appearing for the  petitioners in  Writ Petition No. 155 1/86 submitted that the  Act  dis- placed  the claimants in the matter of their right  to  seek redressal and remedies of the actual injury and harm  caused individually  to the claimants. The Act in question  by  re- placing  the Central Government in place of the victims.  by conferment  of exclusive right to sue in place  of  victims, according  to him, contravened the procedure established  by law.  The right to sue for the wrong done to  an  individual was exclusive to the individual. It was submitted that under the  civil  law of the country, individuals have  rights  to enforce  their claims and any deprivation would  place  them into  a  different category from the  other  litigants.  The right  to enter into compromise, it was  further  submitted, without  consultation  of the victims, if that is  the  con- struction of section 3 read with section 4 of the Act,  then it is violative of procedure established by law. The  proce- dure  substituted, if that be the construction of  the  Act, would  be in violation of the principles of natural  justice and  as  such  bad. It was submitted  that  the  concept  of ’parens patriae’ would not be applicable in these cases.  It was  submitted that traditionally, sovereigns can sue  under the  doctrine  of ’parens patriae’ only  for  violations  of their  "quasi-sovereign"  interests. Such interests  do  not include the claims of individual citizens. It was  submitted that  the Act in question is different from the  concept  of parens  patriae  because  there was no special  need  to  be satisfied  and  a class action, according  to  Shri  Vasdev, would  have served the same purpose as a suit brought  under the  statute  and ought to have been  preferred  because  it safeguarded  claimants’ right to procedural due process.  In addition,  a suit brought under the statute  would  threaten the victims’ substantive due process rights. It was  further submitted that in order to sustain an action, it was  neces- sary for the Government of India to have standing 658     62. Counsel submitted that ’parens patriae’ has received no  judicial  recognition  in this country as  a  basis  for recovery of money damages for injuries suffered by individu- als.  He  may be right to that extent but  the  doctrine  of parens  patriae has been used in India in  varying  contexts and contingencies.     63.  We are of the opinion that the Act in question  was passed  in recognition of the right of the sovereign to  act as  parens  patriae  as contended by  the  learned  Attorney General.  The  Government of India in order  to  effectively safeguard  the  rights of the victims in the matter  of  the conduct  of the case was entitled to act as parens  patriae, which  position was reinforced by the statutory  provisions, namely,  the  Act. We have noted the several  decisions  re- ferred  to  hereinbefore, namely,  Bhudhkaran  Chankhani  v. Thakur  Prasad Shad, (supra); Banku Behary Mondal  v.  Banku Behari Hazra, (supra); Medai Dalavoi T. Kumaraswami Mudaliar v.  Medai Dalavai Rajammal, (supra) and to the  decision  of

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this Court in Mahant Ram Saroop Dasji v. S.P. Sahi,  (supra) and  the  decision of the American Supreme Court  in  Alfred Schnapp v. Puerto Rico, (supra). It has to be borne in  mind that  conceptually  and jurisprudentially, the  doctrine  of parens  patriae is not limited to representation of some  of the  victims outside the territories of the country.  It  is true  that the doctrine has been so utilised in  America  so far.  In our opinion, learned Attorney General was right  in contending that where citizens of a country are victims of a tragedy  because of the negligence of any  multinational,  a peculiar situation arises which calls for suitable effective machinery  to articulate and effectuate the  grievances  and demands of the victims, for which the conventional adversary system  would be totally inadequate. The State in  discharge of  its sovereign obligation must come forward.  The  Indian state because of its constitutional commitment is obliged to take  upon itself the claims of the victims and  to  protect them  in  their hour of need. Learned Attorney  General  was also right in submitting that the decisions of the Calcutta, Madras  and U.S. Supreme Court clearly indicate that  parens patriae  doctrine can be invoked by sovereign  state  within India,  even if it be contended that it has not so far  been invoked  inside  India in respect of claims for  damages  of victims  suffered at the hands of the multinational. In  our opinion, conceptually and jurisprudentially, there is no bar on the State to assume responsibilities analogous to  parens patriae  to  discharge  the State’s  obligations  under  the Constitution.  What the Central Government has done  in  the instant  case seems to us to be an expression of its  sover- eign  power.  This power is plenary and  inherent  in  every sovereign  state to do all things which promote the  health, peace, 659 morals,  education and good order of the people and tend  to increase the wealth and prosperity of the state. Sovereignty is  difficult to define. See in this connection,  Weaver  on Constitional Law, p. 490. By the nature of things, the state sovereignty in these matters cannot be limited. It has to be adjusted to the conditions touching the common welfare  when covered  by  legislative enactments. This power  is  to  the public what the law of necessity is to the individual. It is comprehended  in the maxim salus populi suprema  lex--regard for public welfare is the highest law. It is not a rule,  it is  an  evolution. This power has always been  as  broad  as public  welfare and as strong as the arm of the state,  this can only be measured by the legislative will of the  people, subject to the fundamental rights and constitutional limita- tions.  This  is an emanation of sovereignty subject  to  as aforesaid.  Indeed,  it is the obligation of  the  State  to assume such responsibility and protect its citizens. It  has to be borne in mind, as was stressed by the learned Attorney General,  that  conferment of power and the  manner  of  its exercise  are two different matters. It was  submitted  that the  power to conduct the suit and to compromise, if  neces- sary,  was vested in the Central Government for the  purpose of  the  Act.  The power to compromise and  to  conduct  the proceedings  are  not uncanalised or arbitrary.  These  were clearly  exercisable only in the ultimate interests  of  the victims.  The  possibility of abuse of a  statute  does  not impart to it any element of invalidity. In this  connection, the observations of Viscount Simonds in Belfast  Corporation v.  O.D.  Commission, [1950] AC 490 at 520-21  are  relevant where it was emphasised that validity of a measure is not be determined  by  its application to  particular  cases.  This Court  in Collector of Customs, Madras v. Nathella  Sampathu

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Chetty, [1962] 3 SCR 786 at 825 emphasised that the  consti- tutional validity of the statute would have to be determined on  the  basis  of its provisions and on the  ambit  of  its operation  as  reasonably construed. It has to be  borne  in mind  that if upon so judged it passes the test of  reasona- bleness, then the possibility of the powers conferred  being improperly used is no ground for pronouncing the law  itself invalid.  See  in this connection also the  observations  in P.J.  Irani v. State of Madras, [1962] 2 SCR 169 at  178  to 181  and D.K. Trivedi v. State of Gujarat, [1986] Supp.  SCC 20 at 60-61      64. Sections 3 and 4 of the Act should be read together as  contended  by the learned Attorney General,  along  with other provisions of the Act and in particular sections 9 and 11 of the Act. These should be appreciated in the context of the object sought to be achieved by the Act as indicated  in the Statement of Objects and Reasons and the Preamble to the Act. The Act was so designed that the victims of the 660 disaster are fully protected and the claims of  compensation or  damages  for loss of life or personal  injuries  or  in’ respect  of other matters arising out of or  connected  with the disaster are processed speedily, effectively,  equitably and to the best advantage of the claimants. Section 3 of the Act is subject to other provisions of the Act which includes sections  4  and 11. Section 4 of the Act  opens  with  non- obstante  clause, vis-a-vis, section 3 and therefore,  over- rides section 3. Learned Attorney General submitted that the right  of the Central Government under section 3 of the  Act was  to  represent the victims exclusively and  act  in  the place of the victims. The Central Government, it was  urged, in other words, is substituted in the place of ’the  victims and is the dominus litis. Learned Attorney General submitted that the dominus litis carries with it the right to  conduct the suit in the best manner as it deems fit, including,  the right  to withdraw and right to enter into  compromise.  The right  to withdraw and the right to compromise conferred  by section  3(2) of the Act cannot be exercised to  defeat  the rights of the victims. As to how the rights should be  exer- cised is guided by the objects and the reasons contained  in the  Preamble, namely, to speedily and  effectively  process the  claims of the victims and to protect their claims.  The Act  was passed replacing the Ordinance at a time when  many private  plaintiffs had instituted complaints/suits  in  the American  Courts.  In such a situation,  the  Government  of India acting in place of the victims necessarily should have right  under the statute to act in all situations  including the  position of withdrawing the suit or to enter into  com- promise. Learned Attorney General submitted that if the  UCC were to agree to pay a lump sum amount which would be  just, fair  and  equitable, but insists on a  condition  that  the proceedings should be completely withdrawn, then necessarily there should be power under the Act to so withdraw.  Accord- ing to him, therefore, the Act engrafted a provision  empow- ring  the  Government to compromise.  The  provisions  under section  3(2)(b)  of the Act to enter  into  compromise  was consistent with the powers of dominus litis. In this connec- tion, our attention was drawn to the definition of  ’Dominus Litis’  in  Black’s Law Dictionary, Fifth Edition,  P.  437, which states as follows:               "’Dominus litis’. The master of the suit; i.e.               the person who was really and directly  inter-               ested in the suit as a party, as distinguished               from his attorney or advocate. But the term is               also applied to one who, though not originally

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             a  party, has made himself such, by  interven-               tion  or  otherwise, and  has  assumed  entire               control and responsibility for one side and is               treated by the Court as liable for costs. Vir-               ginia Electric & Power Co, v. Bowers, ISI Va.,               542, 25 S.E. 2d 361,263". 661     65. Learned Attorney General sought to contend that  the victims had not been excluded entirely either in the conduct of  proceedings or in entering into compromise, and  he  re- ferred to the proceedings in detail emphasising the partici- pation  of  some of the victims at some stage. He  drew  our attention  to the fact that the victims had  filed  separate consolidated  complaints in addition to the complaint  filed by the Government of India. Judge Keenan of the Distt. Court of  America had passed orders permitting the victims  to  be represented  not only ’by the private Attorneys but also  by the  Govt. of India. Hence, it was submitted that  it  could not be contended that the victims had been excluded. Learned Attorney  General  further contended that  pursuant  to  the orders  passed by Judge Keenan imposing  certain  conditions against the Union Carbide and allowing the motion for  forum non convenience of the UCC that the suit came back to  India and  was  instituted before the Distt. Court of  Bhopal.  In those  circumstances, it was urged by the  learned  Attorney General that the private plaintiffs who went to America  and who  were represented by the contingency lawyers fully  knew that  they could also have joined in the said suit  as  they were  before  the  American Court along with  the  Govt.  of India. It was contended that in the proceedings at any point of  time or stage including when the compromise was  entered into,  these private plaintiffs could have  participated  in the court proceedings and could have made their  representa- tion,  if they so desired. Even in the Indian  suits,  these private  parties have been permitted to continue as  parties represented by separate counsel even though the Act empowers the Union to be the sole plaintiff. Learned Attorney General submitted  that  Section 4 of the Act  clearly  enabled  the victims  to  exercise their right of  participation  in  the proceedings.  The  Central Govt. was enjoined  to  have  due regard  to any matter which such person might require to  be urged.  Indeed,  the  learned Attorney  General  urged  very strenuously  that  in the instant case,  Zehreeli  Gas  Kand Sangharsh Morcha and Jana Swasthya Kendra (Bhopal) had filed before the Distt. Judge, Bhopal, an application under  Order I  Rule 8 read with Order I Rule 10 and Section 15 1 of  the CPC  for their-intervention on behalf of the  victims.  They had  participated in the hearing before the  learned  Distt. Judge,  who referred to their intervention in the order.  It was further emphasised that when the UCC went up in revision to the High Court of Madhya Pradesh at Jabalpur against  the interim compensation ordered to be paid by the Distt. Court, the  intervener  through its Advocate, Mr. Vibhuti  Jha  had participated  in the proceedings. The aforesaid  Association had also intervened in the civil appeals preferred  pursuant to  the special leave granted by this Court to the Union  of India and Union Carbide against the judgment of the 662 High Court for interim compensation. In those circumstances, it  was  submitted that there did not exist  any  other  gas victim  intervening in the proceedings, claiming  participa- tion under Section 4. Hence, the right to compromise provid- ed for by the Act, could not be held to be violative of  the principles  of  natural justice. According  to  the  learned Attorney  General,  this Court first proposed the  order  to

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counsel in court and after they agreed thereto, dictated the order  on 14th February, 1989. On 15th February, 1989  after the  Memorandum  of  Settlement was filed  pursuant  to  the orders  of the court, further orders were passed.  The  said Association, namely, Zehreeli Gas Kand Sangharsh Morcha  was present, according to the records, in the Court on both  the dates  and did not apparently object to the compromise.  Mr. Charanlal Sahu, one of the petitioners in the writ petition, had  watched the proceedings and after the Court had  passed the order on 15th February, 1989 mentioned that he had filed a suit for Rs. 100 crores. Learned Attorney General  submit- ted  that Mr. Sahu neither protested against the  settlement nor  did  he make any prayer to be heard.  Shri  Charan  Lal Sahu, in the petition of opposition in one of these  matters have  prayed  that a sum of Rs. 100 million should  be  paid over  to him for himself as well as on behalf of those  vic- tims  whom he claimed to represent. In the  aforesaid  back- ground  on the construction of the Section, it was urged  by the  learned  Attorney  General that Section 3  of  the  Act cannot  be held to be unconstitutional. The same provided  a just, fair and reasonable procedure and enabled the  victims to participate  in the proceedings at all stages--those  who were  capable and willing to do so. Our attention was  drawn to  the  fact that Section 11 of the Act provides  that  the provisions  of  the Act shall  have  effect  notwithstanding anything  inconsistent  therewith  contained  in  any  other enactment other than the Act. It was, therefore, urged  that the provisions of the Civil Procedure Code stood  overridden in  respect  of the areas covered by the  Act,  namely,  (a) representation,  (b) powers of representation; and (c)  com- promise.     66.  According to the learned Attorney General, the  Act did  not  violate  the principles of  natural  justice.  The provisions  of  the CPC could not be read into the  Act  for Section  11 of the Act provides that the application of  the provision  of  the Civil Procedure Code in so far  as  those were inconsistent with the Act should be construed as  over- ridden  in  respect  of areas covered  by  it.  Furthermore, inasmuch as Section 4 had given a qualified right of partic- ipation  to  the victims, there cannot be  any  question  of violation of the principles of natural justice. The scope of the application of the principles of natural justice  cannot be  judged by any strait jacket formula. According  to  him, the 663 extension  of the principles of natural justice beyond  what is  provided by the Act in Sections 3 & 4,  was  unwarranted and  would  deprive the provisions of the Statute  of  their efficacy in relation to the achievement of ’speedy  relief’, which  is the object intended to be achieved. He  emphasised that  the  process of notice, consultation and  exchange  of information,  informed decision-making process, the  modali- ties of assessing a consensus of opinion would involve  such time  that the Govt. would be totally unable to act  in  the matter  efficiently, effectively and purposefully on  behalf of  the  victims  for realisation of the just  dues  of  the victims.  He  further urged that the  Civil  Procedure  Code before its amendment in 1976 did not have the provisions  of Order  l  Rules 8(4), (5) & (6) and  Explanations  etc.  nor Order  XXIII Rules 3A and 3B. Before the amendment the  High Court  had taken a view against the requirement  of  hearing the  parties represented in the suit under Order 1,  Rule  8 before  it  before settling or disposing of  the  suit.  Our attention  was  drawn to the decision of the  Calcutta  High Court in Chintaharan Ghose & Ors. v. Gujaraddi Sheik & Ors.,

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AIR  1951  Cal. 456 at 457-459, wherein it was held  by  the learned Single Judge that the plaintiff in a  representative suit had right to compromise subject to the conditions  that the  suit was properly filed in terms of the  provisions  of that  Rule and the settlement was agreed bona fide.  Learned Attorney  General  in that context contended that  when  the suit  was validly instituted, the plaintiff had a  right  to compromise the suit and there need not be any provision  for notice  to the parties represented before entering into  any compromise.  Reliance  was  placed on the  decision  of  the Allahabad  High  Court in Ram Sarup v. Nanak Ram,  AIR  1952 Allahabad  275, where it was held that a compromise  entered into  in  a suit filed under Order 1 Rule 8 of the  CPC  was binding on all persons as the plaintiffs who had  instituted the  suit  in representative capacity had the  authority  to compromise.  He further submitted that most, if not all,  of the  victims had given their powers of attorney  which  were duly filed in favour of the Union of India. These powers  or attorney  have neither been impeached nor revoked  or  with- drawn.  By  virtue of the powers of attorney  the  Union  of India,  it was stated, had the authority to file  the  suits and  to  compromise the interests of the victims if  so  re- quired.  The Act in question itself contemplates  settlement as  we  have  noted, and a settlement would  need  a  common spokesman.     67.  It  was submitted that the Govt. of  India  as  the statutory  representative  discharged its duty and is  in  a centralised position of assessing the merits and demerits of any proposed course of action. So far as the act of  compro- mise, abridging or curtailing the ambit of the 664 rights  of the victims, it was submitted that in respect  of liabilities  of  UCC & UCIL, be it  corporate,  criminal  or tortious, it was open to an individual to take a decision of enforcing  the liability to its logical extent  or  stopping short  of it and acceding to a compromise. Just as an  indi- vidual can make an election in the matter of adjudication of liability  so can a statutory representative make  an  elec- tion.  Therefore,  it  is wholly wrong to  contend,  it  was urged, that Section 3(ii)(b) is inconsistent with  individu- al’s right of election and at the same time it provides  the centralised decision-making processes to effectively adjudge and  secure  the common good. It was only a  central  agency like the Govt. of India, who could have a perspective of the totality  of  the  claims and a vision of  the  problems  of individual  plaintiffs in enforcing these, it was urged.  It was  emphasised that it has to be borne in mind that a  com- promise is a legal act. In the present case, it is a part of the  conduct of the suit. It is, therefore, imperative  that the  choice of compromise is made carefully, cautiously  and with  a measure of discretion, it was submitted. But if  any claimant  wished  to be associated with the conduct  of  the suit, he would necessarily have been afforded an opportunity for that purpose, according to the learned Attorney General. In  this connection, reference was made to Section 4 of  the Act.  On the other hand, an individual who did not  partici- pate  in the conduct of the suit and who is unaware  of  the various intricacies of the case, could hardly be expected to meaningfully  partake in the legal act of settlement  either in  conducting the proceedings or entering into  compromise, it  was urged. In those circumstances, the learned  Attorney General submitted that the orders of 14-15th February,  1989 and  the Memorandum of Settlement were justified both  under the Act and the Constitution. According to him, the terms of Settlement  might  be  envisaged  as  pursuant  to   Section

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3(ii)(b) of the Act, which was filed according to him pursu- ant to judical direction. He sought more than once to empha- sise, that the order was passed by the highest Court of  the land in exercise of extraordinary jurisdiction vested in  it under the Constitution.     68. Our attention was drawn to several decisions for the power  of this Court under Articles 136 and 142 of the  Con- stitution.  Looked closely at the provisions of the Act,  it was  contended  that taking into   consideration   all   the factors,   namely,  possibilities  of  champerty,  exploita- tion,  unconscionable agreements and the need  to  represent the dead and the disabled, the course of events would reveal a  methodical and systematic protection and  vindication  of rights to the largest possible extent. It was observed  that the  rights are indispensably valuable possessions, but  the rights is something which a 665 man  can stand on, something which must be demanded  or  in- sisted upon without embarrassment or shame. When rights  are curtailed, permissibility of such a measure can be  examined only  upon  the  strength, urgency and  the  preeminence  of rights and the largest good of the largest number sought  to b,e  served  by curtailment. Under the  circumstances  which were faced by the victims of Bhopal gas tragedy, the  justi- fying  basis, according to the learned Attorney General,  or ground of human rights is that every person morally ought to have something to which he or she is entitled. It was empha- sised  that  the Statute aimed at it. The Act  provides  for assumption of rights to sue with the aim of securing speedy, effective and equitable results to the best advantage of the claimants. The Act and the scheme, according to the  learned Attorney General, sought to translate that profession into a system  of  faith and possible association  when  in  doubt. Unless such a profession is shown to be unconscionable under the  circumstances or strikes judicial conscience as a  sub- version  of the objects of the Act, a declaredly fair,  just and equitable exercise of a valid power would not be open to challenge.  He  disputed the submission that  the  right  to represent  victims  postulated as contended  mainly  by  the counsel on behalf of the petitioners, a pre-determination of each individual claim as a sine qua non for proceeding  with the  action. Such a construction would deplete the  case  of its vigour, urgency and sense of purpose, he urged. In  this case, with the first of the cases having been filed in  U.S. Federal  Court on December 7, 1984 a settlement  would  have been reached for a much smaller sum to the detriment of  the victims.  Learned  Attorney  General  emphasised  that  this background has to be kept in mind while adjudging the valid- ity of the Act and the appropriateness of the conduct of the suit in the settlement entered into.     69. He submitted that it has to be borne in mind that if the  contentions  of the petitioners  are  entertained,  the rights theoretically might be upheld but the ends of justice would stand sacrificed. It is in those circumstances that it was emphasised that the claimant is an individual and is the best  person  to speak about his injury.  The  knowledge  in relation  to his injury is relevant for the purpose of  com- pensation,  whose distribution and disbursement is the  sec- ondary  stage. It is fallacious to suggest that  the  plaint was  not  based upon necessary data. He  insisted  that  the figures mentioned in the plaint although tentative were  not mentioned without examination or analysis. 70. It was further submitted by the learned Attorney General 666 that while the Govt. of India had proceeded against the UCC,

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it  had to represent the victims as a class and it  was  not possible  to  define each individual’s right  after  careful scrutiny,  nor  was it necessary or possible to do so  in  a mass  disaster  case. The settlement was  a  substitute  for adjudication  since it involved a process of reparation  and relief.  The  relief  and reparation cannot be  said  to  be irrelevant  for the purpose of the Act. It was  stated  that the  alleged  liability of the Govt. of India or  any  claim asserted against the alleged joint tort-feasor should not be allowed to be a constraint on the Govt. of India to  protect the interests of its own citizens. Any counter-claim by  UCC or  any claim by a citizen against the Govt. cannot  vitiate the  action of the State in the collective interest  of  the victims,  who  are the citizens.  Learned  Attorney  General submitted that any industrial activity, normally, has to  be licensed. The mere regulation of any activity does not carry with it legally a presumption of liability for injury caused by  the activity in the event of a mishap occurring  in  the course of such an activity. In any event, the learned Attor- ney  General submitted the Govt. of India  enjoys  sovereign immunity  in accordance with settled law. If this  were  not the case, the Sovereign will have to abandon all  regulatory functions including the licensing of drivers of automobiles. Hence,  we have to examine the question whether even on  the assumption  that  there was negligence on the  part  of  the Govt.  of India in permitting/licensing of the industry  set up by the Union Carbide in Bhopal or permitting the  factory to grow up, such permission or conduct of the Union of India was responsible for the damage which has been suffered as  a result  of Bhopal gas leakage. It is further to be  examined whether  such  conduct  was in discharge  of  the  sovereign functions of the Govt., and as such damages, if any, result- ing  therefrom are liable to be proceeded against the  Govt. as  a joint tort-feasor or not. In those  circumstances,  it was  further asserted on behalf of the Union of  India  that though  calculation  of  damages in a precise  manner  is  a logical consequence of a suit in progress it cannot be  said to be a condition precedent for the purpose of settling  the matter. Learned Attorney General urged that the accountabil- ity  to  the victims should be through the court.  He  urged that  the allegation that a large number of victims did  not give consent to the settlement entered into, is really of no relevance  in  the  matter of a compromise in  a  mass  tort action.  It was highlighted that it is possible  that  those who  do  not  need urgent relief or are  uninformed  of  the issues in the case, may choose to deny consent and may place the  flow  of relief in jeopardy. Thus, consent  based  upon individual subjective opinion can never be correlated to the proposal  of  an  overall settlement in  an  urgent  matter. Learned  Attorney General urged further that if indeed  con- sent were to be insisted upon as a mandatory 667 requirement  of a Statute, it would not necessarily lead  to an  accurate reflection of the victims’ opinion as  opinions may  be  diverse. No individual would be in  a  position  to relate himself to a lump sum figure and would not be able to define  his expectations on a global criteria. In such  cir- cumstances the value of consent is very much diminished.  It was  urged  that  if at all consent was to  be  insisted  it should  not be an expression of the mind without  supporting information  and response. To make consent meaningful it  is necessary  that it must be assertion of a fight to be  exer- cised  in a meaningful manner based on information and  com- prehension  of collective welfare and individual good. In  a matter  of such dimensions the insistence upon consent  will

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lead  to  a process of enquiry which  might  make  effective consideration of any proposal impossible. For the purpose of affording  consent,  it would also be  necessary  that  each individual  not only assesses the damages to himself  objec- tively and places his opinion in the realm of fair  expecta- tion, but would also have to do so in respect of others. The learned Attorney General advanced various reasons why it  is difficult now or impossible to have the concurrence of all.     71.  In answer to the criticism by the  petitioners,  it was explained on behalf of the Union of India that UCIL  was not  impleaded as a party in the suit because it would  have militated  against  the  plea  of  multinational  enterprise liability  and the entire theory of the case in the  plaint. It was highlighted that the power to represent under the Act was  exclusive,  the power to compromise for  the  Govt.  of India is without reference to the victims, yet it is a power guided by the sole object of the welfare of the victims. The presence and ultimately the careful imprimatur of the  judi- cial  process is the best safeguard to the victims.  Learned Attorney General insisted that hearing the parties after the settlement  would also not serve any purpose. He urged  that it  can  never  be ascertained with  certainty  whether  the victims  or groups have authorised what was being  allegedly spoken on their behalf; and that the victims would be unable to  judge a proposal of this nature. A method  of  consensus need  not be evolved like in America where every  settlement made  by contingency fee lawyers who are anxious  to  obtain their share automatically become adversaries of the  victims and the court should therefore be satisfied. Here the  Court arrived  at  the figure and directed the parties to  file  a settlement  on the basis of its order of February  14,  1985 and  the interveners were heard, it was urged. It  was  also urged  that  notice to the victims individually  would  have been  a  difficult exercise and analysis of  their  response time consuming. 668     72. The learned Attorney General urged that neither  the Central  Govt.  nor  the State Govt. of  Madhya  Pradesh  is liable  for the claim of the victims. He asserted  that,  on the  facts of the present case, there is and can be  no  li- ability on their part as joint tort-feasors. For the welfare of the community several socio-economic activities will have to  be permitted by the Govt. Many of these  activities  may have  to be regulated by licensing provisions  contained  in Statutes made either by Parliament or by State Legislatures. Any injury caused to a person, to his life or liberty in the conduct  of  a  licensed authority so as to  make  the  said licensing authority or the Govt. liable to damages would not be in conformity with jurisprudential principle. If in  such circumstances  it  was  urged on behalf of  the  Govt.,  the public exchequer is made liable, it will cause great  public injury and may result in drainage of the treasury. It  would terrorise  the welfare state from acting for development  of the  people,  and  will affect  the  sovereign  governmental activities  which are beneficial to the community not  being adequately licensed and would thereby lead to public injury. In any event, it was urged on behalf of the Govt., that such licensing authorities even assuming without admitting  could be  held to be liable as joint tort feasors, it could be  so held  only on adequate allegations of negligence  with  full particulars  and details of the alleged act or  omission  of the licensing authority alleged and its direct nexus to  the injury caused to the victims. It had to be proved by  cogent and adequate evidence. On some conjecture or surmise without any  foundation  on  facts, Govt’s right  to  represent  the

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victims  cannot be challenged. It was asserted that even  if the Govt. is considered to be liable as a joint tort feasor, it  will be entitled to claim sovereign immunity on the  law as it now stands.     73. Reference was made to the decision of this Court  in Kasturilal Kalia Ram Jain v. The State of U.P., [1965] 1 SCR 375  where  the conduct of some police officers  in  seizing gold in exercise of their statutory powers was held to be in discharge  of the sovereign functions of the State and  such activities  enjoyed sovereign immunities. The  liability  of the Govt. of India under the Constitution has to be referred to  Article 300, which takes us to Sections 15 & 18  of  the Indian  Independence  Act, 1947, and Section 176(1)  of  the Govt.  of  India Act, 1935. Reference was also made  to  the observations of this Court in The State of Rajasthan v. Mst. Vidhyawati, & Anr., [1962] 2 Supp. SCR 989.     74.  We have noted the shareholding of UCC. The  circum- stances that financial institutions held shares in the  UCIL would not disqualify 669 the  Govt.  of India from acting as patens  patriae  and  in discharging of its statutory duties under the Act. The  suit was filed only against the UCC and not against UCIL. On  the basis of the claim made by the Govt. of India, UCIL was  not a necessary party. It was suing only the multinational based on  several  legal grounds of liability of  the  UCC,  inter alia. on the basis of enterprise liability. If the Govt.  of India had instituted a suit against UCIL to a certain extent it  would have weakened its case against UCC in view of  the judgment of this Court in M.C. Mehta’s case (supra). Accord- ing  to learned Attorney General, the Union of India in  the present  case  was  not proceeding on the  basis  of  lesser liability of UCC predicated in Mehta’s case but on a differ- ent  jurisprudential  principle  to make  UCC  strictly  and absolutely liable for the entire damages.     75.  The  learned Attorney General submitted  that  even assuming for the purpose of argument without conceding  that any  objection can be raised for the Govt. of  India  repre- senting  the victims, to the present situation the  doctrine of  necessity  applied. The UCC had to be  sued  before  the American  courts.  The  tragedy was treated  as  a  national calamity,  and the Govt. of India had the right, and  indeed the  duty, to take care of its citizens, in the exercise  of its  parens patriae jurisdiction or on  principle  analogous thereto.  After having statutorily armed itself in  recogni- tion of such parens patraie right or on principles analogous thereto, it went to the American courts. No other person was properly designed for representing the victims as a  foreign court had to recognise a right of representation. The  Govt. of  India was permitted to represent the victims before  the American courts. Private plaintiffs were also represented by their  attorneys. A Committee of three attorneys was  formed before the case proceeded before Judge Keenan. It was  high- lighted  that the order of Judge Keenan permitted the  Govt. of  India to represent the victims. If there was any  remote conflict  of  interests between the Union of India  and  the victims  from the theoretical point of view the doctrine  of necessity  would  override  the possible  violation  of  the principles  of natural justice--that no man should be  Judge in his own case. Reference may be made to Halsbury’s Laws of England,  Vol. 1, 4th Edn., page 89, para 73, where  it  was pointed  that that if all the members of the  only  tribunal competent to determine a matter are subject to disqualifica- tion, they may be authorised and obliged to hear that matter by  virtue  of the operation of the common law  doctrine  of

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necessity.  Reference was also made to De  Smith’s  Judicial Review of Administrative Action (4th Edn. pages 276-277. See also  G.A.  Flick--Natural Justice,  [1879]  pages  138-141. Reference was also made to the observations of this Court in J. Mohapatra & Co. 670 & Anr. v. State of Orissa & Anr., [1984] 4 SCC 103, where at page 112 of the report, the Court recognised ’the  principle of  necessity. It was submitted that these  were  situations where  on  the principle of doctrine of necessity  a  person interested  was held not disqualified to adjudicate  on  his rights. The present is a case where the Govt. of India  only represented  the victims as a party and did  not  adjudicate between the victims and the UCC. It is the Court which would adjudicate the rights of the victims. The representation  of the victims by the Govt. of India cannot be held to be  bad, and  there  is and there was no scope of  violation  of  any principle  of natural justice. We are of the opinion in  the facts and the circumstances of the case that this contention urged  by  Union of India is right. There was  no  scope  of violation of the principle of natural justice on this score.     76.  It  was also urged that the doctrine  of  de  facto representation will also apply to the facts and the  circum- stances  of  the present case. Reliance was  placed  on  the decision  of this Court in Gokaraju Rangaraju etc. v.  State of  A.P., [1981] 3 SCR 474, where it was held that the  doc- trine  of de facto representation envisages that  acts  per- formed within the scope of assumed official authority in the interest  of public or third persons and not for  one’s  own benefit,  are generally to be treated as binding as if  they were the acts of officers de jure. This doctrine is  rounded on good sense, sound policy and practical expediency. It  is aimed  at the prevention of public and private mischief  and protection  of public and private interest. It avoides  end- less confusion and needless chaos. Reference was made to the observations  of this Court in Pushpadevi M. Jatia  v.  M.L. Wadhawan, [1987] 3 SCC 367 at 389-390 and M/s. Beopar Shayak (P)  Ltd. & Ors. v. Vishwa Nath & Ors., [1987] 3 SCC 693  at 702  & 703. Apart from the aforesaid doctrine,  doctrine  of bona fide representation was sought to be resorted to in the circumstances.  In  this connection, reference was  made  to Dharampal  Sing, v. Director of Small Industries Services  & Ors.,  AIR  1980  SC 1888; N.K. Mohammad  Sulaiman  v.  N.C. Mohammad  Ismail & Ors., [1966] 1 SCR 937 and Malkarjun  Bin Shigramappa  Pasara v. Narhari Bin Shivappa & Anr., 27 IA  2 16.     77.  It  was further submitted that  the  initiation  of criminal  proceedings and then quashing thereof,  would  not make  the  Act ultra vires so far as it  concerned.  Learned Attorney General submitted that the Act only authorised  the Govt.  of India to represent the victims to  enforce   their claims  for  damages under the Act. The Govt.  as  such  had nothing to do with the quashing of the criminal  proceedings and  it was not representing the victims in respect  of  the criminal liability of 671 the  UCC or UCIL to the victims. He further  submitted  that quashing  of criminal proceedings was done by the  Court  in exercise of plenary powers under Articles 136 and 142 of the Constitution.  In  this connection, reference  was  made  to State  of  U.P.  v. Poosu & Anr., [1976] 3  SCR  1005;  K.M. Nanavati v. The State of Bombay, [1961] 1 SCR 497. According to the learned Attorney General, there is also power in  the Supreme Court to suggest a settlement and give relief as  in Ram  Gopal v. Smt. Sarubai & Ors., [1981] 4 SCC  505;  India

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Mica  & Micanite Industries Ltd. v. State of Bihar  &  Ors., [1982] 3 SCC 182.     78.  Learned  Attorney General urged  that  the  Supreme Court  is empowered to act even outside a Statute  and  give relief in addition to what is contemplated by the latter  in exercise of its plenary power. This Court acts not only as a Court of Appeal but is also a Court of Equity. See Roshanlal Kuthiala & Ors. v. R.B. Mohan Singh Oberoi, [1975] 2 SCR  49 1.  During  the course of heating of the petitions,  he  in- formed  this  Court that the Govt. of India  and  the  State Govt.  of Madhya Pradesh refuted and denied  any  liability, partial or total, of any sort in the Bhopal gas Leak  disas- ter, and this position is supported by the present state  of law.  It was, however, submitted that any claim against  the Govt.  of India for its alleged tortious liability was  out- side the purview of the Act and such claims, if any, are not extinguished  by  reason  of the orders dated  14th  &  15th February, 1989 of this Court.     79.  Learned  Attorney General further stated  that  the amount of $ 470 million which was secured as a result of the memorandum  of settlement and the said orders of this  Court would  be meant exclusively for the benefit of  the  victims who  have suffered on account of the Bhopal gas leak  disas- ter. The Govt. of India would not seek any reimbursement  on account of the expenditure incurred suo motu for relief  and rehabilitation  of the Bhopal victims nor will the Govt.  or its  instrumentality make any claim on its own arising  from this  disaster.  He further assured this Court that  in  the event of disbursement of compensation being initiated either under the Act or under the orders of this Court, a notifica- tion  would be instantaneously issued under Section 5(3)  of the  Act authorising the Commissioner or any other  officers to discharge functions and exercise all or any powers  which the Central Govt. may exercise under Section 5 to enable the victims to place before the Commissioner or the Dy.  Commis- sioner  any additional evidence that they would like  to  be considered.     80.  The Constitution Bench of this Court presided  over by the learned Chief Justice has pronounced an order on  4th May, 1989 giving 672 reasons for the orders passed on 14th-- 15th February, 1989. Inasmuch as good deal of criticism was advanced before  this Court  during the hearing of the arguments on behalf of  the petitioners about the propriety and validity of the  settle- ment dated 14th-15th February, 1989 even though the same was not  directly in issue before us, it is necessary  to  refer briefly  to  what the Constitution Bench has stated  in  the said order dated 4th May, 1989. After referring to the facts leading  to the settlement, the Court has set out the  brief reason on the following points:               (a) How did the Court arrive at the sum of 470               million US dollars for an overall  settlement?               (b) Why did the Court consider the sum-of  470               millions  US dollars as ’just,  equitable  and               reasonable’?  (c) Why did the Court  not  pro-               nounce on certain important legal questions of               far-reaching  importance said to arise in  the               appeals  as to the principles of liability  of               monolithic, economically  entrenched  multina-               tional  companies  operating  with  inherently               dangerous   technologies  in  the   developing               countries of the third world? These  questions               were  said to be of great  contemporary  rele-               vance  to the democracies of the third  world.

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             This  Court recognised that there was  another               aspect of the review pertaining to the part of               the  settlement which terminated the  criminal               proceedings. The questions raised on the point               in the review-petitions, the Court was of  the               view,  prima  facie  merit  consideration  and               therefore,  abstained  from  saying   anything               which  might tend to prejudge this  issue  one               way or the other.     81.  The basic consideration, the Court recorded,  moti- vating  the conclusion of the settlement was the  compelling need  for  urgent relief, and the Court set  out  the  law’s delays  duly  considering that there was a  compelling  duty both judicial and humane, to secure immediate relief to  the victims.  In  doing  so, the Court did not  enter  upon  any forbidden  ground,  the court stated. The Court  noted  that indeed  efforts had already been made in this  direction  by Judge Keenan and the learned District Judge of Bhopal.  Even at  the opening of the arguments in the appeals,  the  Court had  suggested to learned counsel to reach a just  and  fair settlement.  And when counsel met for re-scheduling  of  the hearings the  suggestion was reiterated.  The Court recorded that  the  response of learned counsel was positive  in  at- tempting a settlement but they expressed a certain degree of uneasiness  and  skepticism at the prospects of  success  in view of their past experience of such negotiations when,  as they stated, there had been uninformed and even  irresponsi- ble criticism of the attempts at settlement. 673     82.  Learned Attorney General had made available to  the Court  the particulars of offers and counter-offers made  on previous  occasions and the history of settlement. In  those circumstances,  the Court examined the prima facie  material as the basis of quantification of a sum which, having regard to  all the circumstances including the prospect  of  delays inherent in the judicial process in India and thereafter  in the  matter of domestication of the decree in the  U.S.  for the  purpose of execution and directed that 470  million  US dollars,  which upon immediate payment with interest over  a reasonable  period, pending actual distribution amongst  the claimants, would aggregate to nearly 500 million US  dollars or its rupee equivalent of approximately Rs.750 crores which the  learned  Attorney General had suggested,  be  made  the basis  of  settlement, and both the  parties  accepted  this direction.     83.  The Court reiterated that the settlement  proposals were considered on the premise that the Govt. had the exclu- sive  statutory authority to represent and act on behalf  of the victims and neither counsel had any reservation on this. The  order was also made on the premise that the Act  was  a valid  law. The Court declared that in the event the Act  is declared  void  in the pending proceedings  challenging  its validity, the order dated 14th February, 1989 would  require to be examined in the light of that decision. The Court also reiterated  that if any material was placed before  it  from which a reasonable inference was possible that the UCC  had, at  any time earlier, offered to pay any sum higher than  an outright down payment of US 470 million dollars, this  Court would  straightaway initiate suo motu action  requiring  the concerned  parties  to show cause why the order  dated  14th February’89 should not be set aside and the parties relegat- ed  to their original positions. The Court  reiterated  that the  reasonableness of the sum was based not only  on  inde- pendent  quantification but the idea of  reasonableness  for the  present  purpose was necessarily a  broad  and  general

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estimate  in the context of a settlement of the dispute  and not on the basis of an accurate assessment by  adjudication. The Court stated that the question was, how good or reasona- ble it was as a settlement, which would avoid delay,  uncer- tainties  and assure immediate payment. An estimate  in  the very  nature  of things, would not have the accuracy  of  an adjudication. The Court recorded the offers, counter-offers, reasons  and  the  numbers of the persons  treated  and  the claims already made. The Court found that from the order  of the High Court and the admitted position on the  plaintiff’s side,  a  reasonable prima facie estimate of the  number  of fatal cases and serious personal injury cases, was  possible to be made. The Court referred to the High Court’s 674 assessment  and procedure to examine the task  of  assessing the  quantum of interim compensation. The Court referred  to M.  C Mehta’s case reiterated by the High Court, bearing  in mind  the  factors that if the suit proceeded to  trial  the plaintiff-Union of India would obtain judgment in respect of the  claims relating to deaths and personal injuries in  the following manner:- (a) Rs.2 lakhs in each case of death; (b) Rs.2 lakh in  each case  of total permanent disability; (c) Rs. 1 lakh in  each case of permanent partial disablement; and (d) Rs.50,000  in each case of temporary partial disablement.     84.  Half of these amounts were awarded as interim  com- pensation by the High Court.     85.  The figures adopted by the High Court in regard  to the  number  of fatal cases and cases  of  serious  personal injuries  did  not appear to have been disputed  by  anybody before  the  High  Court, this Court  observed.  From  those figures, it came to the conclusion that the total number  of fatal  cases  was about 3,000 and of  grievous  and  serious personal  injuries,  as  verifiable  from  the  records  was 30,000. This Court also took into consideration that about 8 months after the occurrence a survey had been conducted  for the purpose of identification of cases. These figures  indi- cated  less than 10,000. In those circumstances, as a  rough and  ready estimate, this Court took into consideration  the prima  facie  findings of the High Court and  estimated  the number  of  fatal cases of 3,000  where  compensation  could range from Rs. 1 lakh to Rs.3 lakhs. This would account  for Rs.70  crores,  nearly 3 times higher than what  would  have otherwise been awarded in comparable cases in motor vehicles accident claims.     86. The Court recognised the effect of death and reiter- ated  that loss of precious human lives is irreparable.  The law can only hope to compensate the estate of a person whose life was lost by the wrongful act of another only in the way the law was equipped to compensate i.e. by monetary  compen- sation  calculated  on certain  well-recognised  principles. "Loss to the estate" which is the entitlement of the  estate and  the  ’loss  of dependency’ estimated on  the  basis  of capitalised present value awardable to the heirs and depend- ants, this Court considered, were the main components in the computation  of compensation in fatal accident actions,  but the  High Court adopted a higher basis. The Court also  took into  account  the personal injury cases,  and  stated  that these apportionments were merely broad considerations gener- ally guiding the idea of reasonableness of the overall basis of 675 settlement,  and  reiterated that this exercise  was  not  a pre-determination of the quantum of compensation amongst the claimants either individually or catagory-wise, and that the

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determination of the actual quantum of compensation  payable to the claimants has to be done by the authorities under the Act. These were the broad assessments and on that basis  the Court made the assessment. The Court believed that this  was a  just  and reasonable assessment based  on  the  materials available at that time. So far as the other question,  name- ly,  the  vital juristic principles  of  great  contemporary relevance  to  the Third World generally, and  to  India  in particular,  touching problems emerging from the pursuit  of such  dangerous  technologies for economic gains  by  multi- nationals in this case, the Court recognised that these were great problems and reiterated that there was need to  evolve a  national policy to protect national interests  from  such ultra-hazardous pursuits of economic gain; and that Jurists, technologists  and other experts in economics.   environmen- tology,  futurology,  sociology  and  public  health  should identify  the areas of common concern and help  in  evolving proper criteria which might receive judicial recognition and legal  sanction.  The Court reiterated that  some  of  these problems were referred to in M.C. Mehta’s case (supra).  But in the present case, the compulsions of the need for immedi- ate  relief to tens of thousands of suffering victims  could not  wait till these questions vital though these  be,  were resolved  in  due course of judicial  proceedings;  and  the tremendous suffering of thousands of persons compelled  this Court to move into the direction of immediate relief  which, this Court thought, should not be subordinated to the uncer- tain  promises of the law, and when the assessment of  fair- ness of the amount was based on certain factors and  assump- tions not disputed even by the plaintiffs.     87.  Before considering the question  of  constitutional validity  of the Act, in the light of the background of  the facts  and circumstances of this case and submissions  made, it is necessary to refer to the order dated 3rd March,  1989 passed  by the Constitution Bench in respect of  writ  peti- tions Nos. 164/86 and 268/89, consisting of 5 learned Judges presided over by the Hon’ble the Chief Justice of India. The order  stated  that  these matters would be  listed  on  8th March, 1989 before a Constitution Bench for decision "on the sole question whether the Bhopal Gas Leak Disaster (Process- ing of Claims) Act, 1985 is ultra vires". This is a judicial order passed by the said Constitution Bench. This is not  an administrative  order. Thus, these matters are  before  this Court.  The  question,  therefore, arises;  what  are  these matters? The aforesaid order specifically states that  these matters were placed before this Bench on the "sole question" whether the Act is ulta vires. 676 Hence, these matters are not before this Bench for  disposal of  these writ petitions. If as a result of  the  determina- tion,  one way or the other, it is held, good and  bad,  and that some relief becomes necessary, the same cannot be given or  an  order cannot be passed in  respect  thereof,  except declaring  the Act or any portion of the Act, valid  or  in- valid constitutionally as the decision might be.     88.  In writ petition No. 268/89 there is  consequential prayer to set aside the order dated 14/15th February,  1989. But  since the order dated 3rd March, 1989 above  only  sug- gests that these matters have been placed before this  Bench ’on the sole question’ whether the Bhopal Act is ultra vires or  not,  it is not possible by virtue of that order  to  go into the question whether the settlement is valid or  liable to be set aside as prayed for in the prayers in these appli- cations.     89.  The provisions of the Act have been noted  and  the

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rival  contentions of the parties have been set out  before. It is, however, necessary to reiterate that the Act does not in  any way circumscribe the liability of the UCC,  UCIL  or even  the Govt. of India or Govt. of Madhya Pradesh if  they are  jointly  or  severally liable. This  follows  from  the construction of the Act, from the language that is apparent. The context and background do not indicate to the  contrary. Counsel  for the victims plead that that is so. The  learned Attorney General accepts that position. The liability of the Government  is,  however, disputed. This Act also  does  not deal  with any question of criminal liability of any of  the parties concerned. On an appropriate reading of the relevant provisions  of  the Act, it is apparent  that  the  criminal liability arising out of Bhopal gas leak disaster is not the subject-matter  of this Act and cannot be said to have  been in any way affected, abridged or modified by virtue of  this Act. This was the contention of learned counsel on behalf of the victims. It is also the contention of the learned Attor- ney General. In our opinion, it is the correct analysis  and consequence  of the relevant provisions of the  Act.  Hence, the  submissions made on behalf of some of the victims  that the  Act  was bad as it abridged or took away  the  victims’ right  to proceed criminally against the delinquent,  be  it UCC  or  UCIL or jointly or severally the  Govt.  of  India, Govt.  of Madhya Pradesh or Mr. Arjun Singh,  the  erstwhile Chief Minister of Madhya Pradesh, is on a wrong basis. There is no curtailment of any right with respect to any  criminal liability.  Criminal liability is not the subject-matter  of the Act. By the terms of the Act and also on the concessions made  by the learned Attorney General, if that be  so,  then can non-prosecution in criminal liability be a consideration or  valid consideration for settlement of claims  under  the Act? 677 This is a question which has been suggested and  articulated by  learned counsel appearing for the victims. On the  other hand,  it has been asserted by the learned Attorney  General that  that  part of the order dated 14/15th  February,  1989 dealing with criminal prosecution or the order of this Court was  by  virtue of the inherent power of  this  Court  under Articles  136 & 142 of the Constitution. These, the  learned Attorney  General  said,  were in the  exercise  of  plenary powers  of  this Court. These are not  considerations  which induced  the parties to enter into settlement. For the  pur- pose of determination of constitutional validity of the Act, it  is however necessary to say that criminal  liability  of any  of  the  delinquents  or of  the  parties  is  not  the subject-matter  of this Act and the Act does not  deal  with either claims or rights arising out of such criminal liabil- ity. This aspect is necessary to be reiterated on the  ques- tion of validity of the Act.     90. We have set out the language and the purpose of  the Act,  and also noted the meaning of the  expression  ’claim’ and  find  that the Act was to secure the  claims  connected with  or  arising out of the disaster so that  these  claims might be dealt with speedily, affectively, equitably and  to the best advantage of the claimants. In our opinion,  Clause (b) of Section 2 includes all claims of the victims  arising out of and connected with the disaster for compensation  and damages  or loss of life or personal injury or loss  to  the business  and flora and fauna. What, however, is the  extent of liability, is another question. This Act does not purport to or even to deal with the extent of liability arising  out of  the said gas leak disaster. Hence, it would be  improper or  incorrect  to contend as did Ms. Jaising,  Mr  Garg  and

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other  learned counsel appearing for the victims,  that  the Act  circumscribed  the  liability--criminal,  punitive   or absolute  of the parties in respect of the leakage. The  Act provides for a method or procedure for the establishment and enforcement  of  that liability. Good deal of  argument  was advanced before this Court on the question that the  settle- ment has abridged the liability and this Court has lost  the chance of laying down the extent of liability arising out of disaster like the Bhopal Gas Leak disaster. Submissions were made that we should lay down clearly the extent of liability arising  out of these types of disasters and we should  fur- ther  hold that the Act abridged such liability and as  such curtailed  the  rights of the victims and was  bad  on  that score. As mentioned hereinbefore, this is an argument  under a  misconception. The Act does not in any way except to  the extent  indicated  in  the relevant provisions  of  the  Act circumscribe  or  abridge the extent of the  rights  of  the victims  so  far  as the liability of  the  delinquents  are concerned. Whatever are the rights of the victims and  what- ever claims arise out of the 678 gas leak disaster for compensation, personal injury, loss of life  and  property, suffered or likely to be  sustained  or expenses to be incurred or any other loss are covered by the Act  and the Central Govt. by operation of Section 3 of  the Act  has  been given the exclusive right  to  represent  the victims in their place and stead. By the Act, the extent  of liability  is not in any way abridged and, therefore, if  in case  of  any industrial disaster like the Bhopal  Gas  Leak disaster,  there is right in victims to recover  damages  or compensation  on the basis of absolute liability,  then  the same is not in any manner abridged or curtailed.     91. Over 120 years ago Rylands v. Fletcher, [1868]  Vol. 3 LR E & I Appeal Cases 330 was decided in England. There A, was the lessee of certain mines. B, was the owner of a  mill standing  on land adjoining that under which the mines  were worked.  B, desired to construct a reservoir,  and  employed competent  persons, such as engineers and a  contractor,  to construct  it.  A, had worked his mines up to a  spot  where there  were  certain old passages of  disused  mines;  these passages were connected with vertical shafts which  communi- cated  with the land above, and which had also been  out  of use for years, and were apparently filled with marl and  the earth of the surrounding land. No care had been taken by the engineer  or  the contractor to block up these  crafts,  and shortly  after water had been introduced into the  reservoir it broke through some of the shafts, flowed through the  old passage  and  flooded As mine. It was held by the  House  of Lords  in  England  that where the owner  of  land,  without wilfulness  or  negligence, uses his land  in  the  ordinary manner  of its use, though mischief should thereby be  occa- sioned  to his neighbour, he will not be liable in  damages. But  if  he brings upon his land any thing which  would  not naturally  come upon it, and which is in  itself  dangerous, and may become mischievous if not kept under proper control, though in so doing he may act without personal wilfulness or negligence,  he will be liable in’ damages for any  mischief thereby  occasioned. In the background of the facts  it  was held  that  A  was entitled to recover damages  from  B,  in respect  of the injury. The question of liability was  high- lighted  by this Court in M.C. Mehta’s case (supra) where  a Constitution  Bench of this Court had to deal with the  rule of  strict liability. This Court held that the rule  in  Ry- lands  v. Fletcher, (supra) laid down a principle that if  a person  who brings on his land and collects and  keep  there

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anything  likely to do harm and such thing escapes and  does damage to another, he is liable to compensate for the damage caused.  This  rule applies only to nonnatural user  of  the land  and does not apply to things naturally on the land  or where  the  escape is due to an act of God and an act  of  a stranger  or the default of the person injured or where  the things which escape 679 are  present  by  the consent of the person  injured  or  in certain  cases where there is a statutory authority.  There, this  Court observed that the rule in Rylands  v.  Fletcher, (supra)  evolved in the 19th century at a time when all  the developments of science and technology had not taken  place, and  the  same cannot afford any guidance  in  evolving  any standard  of  liability consistent with  the  constitutional norms  and the needs of the present day economy  and  social structure.  In a modern industrial society with  highly  de- veloped scientific knowledge and technology where  hazardous or  inherently  dangerous  industries are  necessary  to  be carried  on  as part of the  developmental  process,  Courts should  not feel inhibited by this rule merely  because  the new  law does not recognise the rule of strict and  absolute liability in case of an enterprise engaged in hazardous  and dangerous activity. This Court noted that law has to grow in order to satisfy the needs of the fast changing society  and keep abreast with the economic developments taking place  in the country. Law cannot afford to remain static. This  Court reiterated there that if it is found necessary to  construct a new principle of liability to deal with an unusual  situa- tion which has arisen and which is likely to arise in future on  account of hazardous or inherently dangerous  industries which  are concomitant to an industrial economy,  the  Court should  not hesitate to evolve such principle  of  liability merely because it has not been so done in England. According to this Court, an enterprise which is engaged in a hazardous or  inherently  dangerous  industry  which  poses  potential threat  to the health and safety of the persons  working  in the  factory and residing in the surrounding areas  owes  an absolute  and non-delegable duty to the community to  ensure that no harm results to anyone. The enterprise must be  held to  be under an obligation to provide that the hazardous  or inherently dangerous activity in which it is engaged must be conducted  with the highest standards of safety and  if  any harm  results  to anyone on account of an  accident  in  the operation  of  such  activity resulting,  for  instance,  in escape of toxic gas the enterprise is strictly and absolute- ly  liable to compensate all those who were affected by  the accident  as  part of the social cost for carrying  on  such activity,  regardless of whether it is carried on  carefully or  not. Such liability is not subject to any of the  excep- tions  which  operate vis-a-vis the  tortious  principle  of strict  liability under the rule in Rylands v. Fletcher.  If the  enterprise  is  permitted to carry on  a  hazardous  or dangerous activity for its profit, the law must presume that such  permission is conditional on the enterprise  absorbing the cost of any accident arising on account of such activity as  an  appropriate item  of its overheads.  The  enterprise alone  has the resources to discover and guard against  haz- ards  or dangers and ’to provide warning  against  potential hazards. 680 This  Court reiterated that the measure of  compensation  in these kinds of cases must be correlated to the magnitude and capacity  of the enterprise because such  compensation  must have a deterrent effect. The larger and more prosperous  the

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enterprise,  the greater must be the amount of  compensation payable by it for the harm caused on account of an  accident in the carrying on of the hazardous or inherently  dangerous activity  by  the enterprise. The  determination  of  actual damages payable would depend upon various facts and  circum- stances of the particular case.     92.  It was urged before us that there was  an  absolute and strict liability for an enterprise which was carrying on dangerous  operations  with gases in this  country.  It  was further  submitted  that there was evidence on  record  that sufficient  care and attention had not been given  to  safe- guard against the dangers of leakage and protection in  case of  leakage.  Indeed,  the  criminal  prosecution  that  was launched  against the Chairman of Union Carbide Shri  Warren Anderson and others, as indicated before, charged them along with  the defendants in the suit with delinquency  in  these matters and criminal negligence in conducting the toxic  gas operations  in Bhopal. As in the instant adjudication,  this Court is not concerned with the determination of the  actual extent  of liability, we will proceed on the basis that  the law enunciated by this Court in M.C. Mehta’s case (supra) is the decision upon the basis of which damages will be payable to the victims in this case. But then the practical question arises:  what is the extent of actual damages  payable,  and how  would  the quantum of damages be computed?  Indeed,  in this connection, it may be appropriate to refer to the order passed by this Court on 3rd May, 1989 giving reasons why the settlement  was  arrived at at the  figure  indicated.  This Court had reiterated that it had proceeded on certain  prima facie undisputed figures of death and substantially  compen- sating personal injury. This Court has referred to the  fact that  the High Court had proceeded on the broader  principle in M.C. Mehta’s case (supra) and on the basis of the capaci- ty  of  the enterprise because the  compensation  must  have deterrent effect. On that basis the High Court had proceeded to estimate the damages on the basis of Rs.2 lakhs for  each case of death and of total permanent disability, Rs. 1  lakh for each case of partial permanent disability and  Rs.50,000 for  each  case or’ temporary partial  disability.  In  this connection,  the controversy as to what would have been  the damages  if  the action had proceeded,  is  another  matter. Normally, in measuring civil liability, the law has attached more  importance to the principle of compensation than  that of punishment. Penal redress, however, involve both  compen- sation to the person injured and punish- 681 ment  as deference. These problems were highlighted  by  the House  of  Lords in England in Rookes v.  Barnard,  [1964]AC 1129,  which indicate the difference between aggravated  and exemplary damages. Salmond on the Law of Torts, 15th Edition at p. 30 emphasises that the function of damages is  compen- sation rather than punishment, but punishment cannot  always be  ignored.  There are views which  are  against  exemplary damages  on the ground that these infringe in principle  the object of law of torts, namely, compensation and not punish- ment  and these tend to impose something equivalent to  fine in  criminal  law  without the safeguards  provided  by  the criminal  law.  In Rookes v. Barnard (supra), the  House  of Lords in England recognised three classes of cases in  which the  award of exemplary damages was considered to be  justi- fiable.  Awards  must not only, it is said,  compensate  the parties  but  also  deter the wrong doers  and  others  from similar  conduct in future. The question of  awarding  exem- plary  or deterrent damages is said to have  often  confused civil and criminal functions of law. Though it is considered

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by many that it is a legitimate. encroachment of  punishment in  the  realm of civil liability, as it operates as  a  re- straint  on the transgression of law which is for the  ulti- mate benefit of the society. Perhaps, in this case, had  the action proceeded, one would have realised that the fall  out of  this gas disaster might have been formulation of a  con- cept  of damages, blending both civil and criminal  liabili- ties.  There are, however, serious difficulties in  evolving such  an actual concept of punitive damages in respect of  a civil  action  which can be integrated and enforced  by  the judicial  process. It would have raised serious problems  of pleading, proof and discovery, and interesting and challeng- ing as the task might have been, it is still very  uncertain how  far decision based on such a concept would have been  a decision  according  to ’due process’ of law  acceptable  by international  standards.  There were difficulties  in  that attempt. But as the provisions stand these considerations do not make the Act constitutionally invalid. These are matters on  the  validity of settlement. The Act, as such  does  not abridges or curtail damages or liability whatever that might be. So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which  is unreasonable in the situation is  unwarranted  and cannot be sustained.     93. Mr. Garg tried to canvass before us the expanding of horizons  of human rights. He contended that the conduct  of the multinational corporations dealing with dangerous  gases for  the purpose of development specially in the  conditions prevailing  under the Third world countries requires  closer scrutiny  and vigilance on the part of emerging nations.  He submitted that unless courts are alert and active 682 in preserving the rights of the individuals and in enforcing criminal  and strict liability and in setting up norms  com- pelling  the  Govt. to be more vigilant  and  enforcing  the sovereign  will of the people of India to oversee that  such criminal  activities  which endanger even for  the  sake  of developmental work, economy and progress of the country, the health  and  happiness of the people and damage  the  future prospects  of  health,  growth and affect  and  pollute  the environment,  should be curbed and, according to him,  these could only be curbed by insisting through the legal  adjudi- cation,  punitive  and deterrent punishment in the  form  of damages.  He also pleaded that norms should be set up  indi- cating  how  these kinds of dangerous operations are  to  be permitted  under  conditions of vigilance  and  survillence. While  we appreciate the force of these arguments,  and  en- dorse  his plea that norms and deterrence should be  aspired for,  it  is  difficult to correlate that  aspect  with  the present problem in this decision.     94.  We  do  reiterate, as mentioned  in  the  Universal Declaration  of Human Rights that people are born  free  and the dignity of the persons must be recognised and an  effec- tive  remedy  by  competent tribunal is one  of  the  surest method  of effective remedy. If, therefore, as a  result  of this tragedy new consciousness and awareness on the part  of the  people of this country to be more vigilant about  meas- ures and the necessity of ensuring more strict vigilance for permitting  the operations of such dangerous  and  poisonous gases  dawn,  then perhaps the tragic experience  of  Bhopal would not go in vain.     95. The main question, however, canvassed by all learned counsel  for  the victims was that so far as the  Act  takes away  the right of the victims to fight or  establish  their own rights, it is a denial of access to justice, and it  was

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contended that such denial is so great a deprivation of both human dignity and right to equality that it cannot be justi- fied  because  it would be affecting right  to  life,  which again cannot be deprived without a procedure established  by law which is just, fair and reasonable.     96.  On this aspect, Shri Shanti Bhushan tried  to  urge before us that sections 3 & 4 of the Act. in so far as these enjoin and empower the Central Govt. to institute or  prose- cute  proceedings  was only an enabling  provision  for  the Central Govt. and not depriving or disabling provisions  for the victim. Ms. Jaising sought to urge in addition, that  in order  to  make the provisions  constitutionally  valid,  we should eliminate the concept of exclusiveness to the Central Govt.  and  give  the victims right to sue  along  with  the Central Govt. We are unable to accept these submissions. 683     97.  In our opinion, Sections 3 & 4 are categorical  and clear.  When the expression is explicit, the  expression  is conclusive,  alike in what it says and in what it  does  not say. These give to the Central Government an exclusive right to  act  in place of the persons who are  entitled  to  make claim or have already made claim. The expression ’exclusive’ is  explicit  and  significant. The  exclusivily  cannot  be whittled  down or watered down as suggested by counsel.  The said  expression must be given its full meaning and  extent. This  is corroborated by the use of the  expression  ’claim’ for all purposes. If such duality of rights are given to the Central  Govt.  along  with the victims  in  instituting  or proceeding  for  the realisation or the enforcement  of  the claims  arising out of Bhopal gas leak disaster,  then  that would  be so cumbersome that it would not be speedy,  effec- tive or equitable and would not be the best or more advanta- geous  procedure for securing the claims arising out of  the leakage.  In  that  view of the matter and in  view  of  the language  used and the purpose intended to be  achieved,  we are  unable to accept this aspect of the arguments  advanced on behalf of the victims. It was then contended that by  the procedure  envisaged by the Act, the victims have  been  de- prived  and  denied.their rights and property to  fight  for compensation.  The victims, it has been asserted, have  been denied access to justice. It is a great deprivation, it  was urged. It was contended that the procedure evolved under the Act  for  the victims is peculiar and having  good  deal  of disadvantages for the victims. Such special  disadvantageous procedure  and treatment is unequal treatment, it  was  sug- gested.  It was, therefore, violative of Article 14  of  the Constitution, that is the argument advanced.     98. The Act does provide a special procedure in  respect of the rights of the victims and to that extent the  Central Government  takes upon itself the rights of the victims.  It is a special Act providing a special procedure for a kind of special  class  of victims. In view of the enormity  of  the disaster  the  victims of the Bhopal gas leak  disaster,  as they were placed against the multinational and a big  Indian corporation  and in view of the presence of foreign  contin- gency  lawyers to whom the victims were exposed, the  claim- ants and victims can legitimately be described as a class by themselves different and distinct, sufficiently separate and indentifiable to be entitled to special treatment for effec- tive, speedy, equitable and best advantageous settlement  of their claims. There indubitably is differentiation. But this differentiation  is based on a principle which has  rational nexus with the aim intended to be achieved by this differen- tiation.  The disaster being unique in its character and  in the recorded history of industrial disasters situated as the

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victims were against a mighty multinational with 684 the presence of foreign contingency lawyers. looming on  the scene,  in  our opinion, there were sufficient  grounds  for such  differentiation and different treatment.  In  treating the victims of the gas leak disaster differently and provid- ing  them a procedure, which was just, fair, reasonable  and which  was not unwarranted or unauthorised by the  Constitu- tion, Article 14 is not breached. We are, therefore,  unable to accept this criticism of the. Act.     99. The second aspect canvassed on behalf of the victims is that the procedure envisaged is unreasonable and as  such not  warranted by the situation and cannot be treated  as  a procedure  which is just, fair and reasonable. The  argument has  to be judged by the yardstick, as  mentioned  hereinbe- fore,  enunciated by this Court in State of Madras  v.  V.G. Rao, (supra). Hence, both the restrictions or limitations on the substantive and procedural rights in the impugned legis- lation will have to be judged from the point of view of  the particular Statute in question. No abstract rule or standard of  reasonableness can be applied. That question has  to  be judged having regard to the nature of the rights alleged  to have been infringed in this case, the extent and urgency  of the evil sought to be remedied, disproportionate imposition, prevailing conditions at the time, all these facts will have to be taken into consideration. Having considered the  back- ground,  the plight of the impoverished, the urgency of  the victims’  need,  the  presence of  the  foreign  contingency lawyers, the procedure of settlement in USA in mass  action, the  strength for the foreign multinationals, the nature  of injuries and damages, and the limited but significant  right of  participation of the victims as contemplated by  s.4  of the Act, the Act cannot be condemned as unreasonable.     100. In this connection, the concept of ’parens patriae’ in  jurisprudence may be examined. It was contended  by  the learned  Attorney  General  that the State  had  taken  upon itself  this onus to effectively come in as parens  patriae, we  have  noted  the long line of  Indian  decisions  where, though  in different contexts, the concept of State  as  the parent  of people who are not quite able to or competent  to fight  for  their rights or assert their rights,  have  been utilised.  It  was  contended that the  doctrine  of  parens patriae cannot be applicable to the victims. How the concept has  been understood in this country as well as  in  America has been noted. Legal dictionaries have been referred to  as noted  before. It was asserted on behalf of the  victims  by learned  counsel  that the concept of ’parens  patriae’  can never be invoked for the purpose of suits in domestic juris- diction of any country. This can only be applied in  respect of the claims out of the 685 country  in foreign jurisdiction. It was  further  contended that this concept of ’parens patraie’ can only be applied in case  of persons who are under disability and would  not  be applicable in respect of those who are able to assert  their own rights. It is true that victims or their representatives are sui generis and cannot as such due to age, mental capac- ity  or  other  reason not legally incapable  for  suing  or pursuing  the  remedies  for the rights yet they  are  at  a tremendous  disadvantage  in the broader  and  comprehensive sense of the term. These victims cannot be considered to  be any  match to the multinational companies or the Govt.  with whom in the conditions that the victims or their representa- tives  were after the disaster physically, mentally,  finan- cially,  economically  and also because of the  position  of

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litigation  would  have to contend. In such a  situation  of predicament the victims can legitimately be considered to be disabled.  They  were in no position by themselves  to  look after  their own interests effectively or  purposefully.  In that  background,  they are people who  needed  the  State’s protection  and should come within the umbrella  of  State’s sovereignty  to assert, establish and maintain their  rights against  the  wrong  doers in this mass  disaster.  In  that perspective,  it is jurisprudentially possible to apply  the principle  of  parens patriae doctrine to the  victims.  But quite  apart from that, it has to be borne in mind  that  in this  case the State is acting on the basis of  the  Statute itself.  For the authority of the Central Govt. to  sue  for and  on  behalf of or instead in place of  the  victims,  no other  theory, concept or any jurisprudential  principle  is required  than the Act itself. The Act empowers and  substi- tutes  the Central Govt. It displaces the victims by  opera- tion  of  Section 3 of the Act and substitutes  the  Central Govt. in its place. The victims have been divested of  their rights  to  sue and such claims and such  rights  have  been vested  in the Central Govt. The victims have been  divested because  the victims were disabled. The disablement  of  the victims  vis-a-vis  their adversaries in this  matter  is  a self-evident  factor. If that is the position then,  in  our opinion,  even  if  the strict application  of  the  ’parens patriae’  doctrine  is not in order, as a concept  it  is  a guide.  The  jurisdiction  of the State’s  power  cannot  be circumscribed by the limitations of the traditional  concept of  parens patriae. Jurisprudentially, it could be  utilised to  suit  or alter or adapt itself in  the  changed  circum- stances.  In  the situation in which the victims  were,  the State  had  to assume the role of a  parent  protecting  the rights  of the victims who must come within  the  protective umbrella  of  the State and the common  sovereignty  of  the Indian  people. As we have noted the Act is an  exercise  of the  sovereign  power  of the State. It  is  an  appropriate evolution of the expression of sovereignty in the  situation that had arisen. We must recognize and accept it as such. 686     101.  But  this right and obligation of  the  State  has another  aspect.  Shri Shanti Bhushan has  argued  and  this argument  has  also been adopted by  other  learned  counsel appearing  for the victims that with the assumption  by  the State of the jurisdiction and power as a parent to fight for the  victims in the situation there is an imcumbent  obliga- tion  on  the  State, in the words of Judge  Keenan,  ’as  a matter of fundamental human decency’ to maintain the victims until  the  claims  are established and  realised  from  the foreign  multinationals.  The  major  inarticulate   premise apparent  from the Act and the scheme and the spirit of  the Act is that so long as the rights of the victims are  prose- cuted  the  State  must protect and  preserve  the  victims. Otherwise  the  object  of the Act would  be  defeated,  its purpose  frustrated. Therefore, continuance of the  payments of  the interim maintenance for the continued sustenance  of the victims is an obligation arising out of State’s  assump- tion of the power and temporary deprivation of the rights of the victims and divestiture of the rights of the victims  to fight  for  their own rights. This is  the  only  reasonable interpretation  which is just, fair and proper.  Indeed,  in the language of the Act there is support for this  interpre- tation.  Section  9 of the Act gives power  to  the  Central Govt.  to frame by notification, a scheme for carrying  into effect the purposes of the Act. Sub-section (2) of Section 9 provides  for the matters for which the scheme may  provide.

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Amongst  others,  clause (d) of Section  9(2)  provides  for creation  of a fund for meeting expenses in connection  with the  administration of the Scheme and of the  provisions  of the  Act; and clause (e) of Section 9(2) covers the  amounts which the Central Govt. "may after due appropriation made by Parliament  by  law in that behalf, credit to the  fund  re- ferred  to in clause (d) and any other amounts which may  be credited to such fund". Clause (f) of Section 9(2) speaks of the  utilisation, by way of disbursal (including  apportion- ment) or otherwise, of any amounts received in  satisfaction of  the  claims.  These provisions are  suggestive  but  not explicit.  Clause (b) of Section 10 which provides  that  in disbursing  under the scheme the amount received by  way  of compensation  or  damages in satisfaction of a  claim  as  a result  of the adjudication or settlement of the claim by  a court or other authority, deduction shall be made from  such amount  of  the sums, if any, paid to the  claimant  by  the Govt. before the disbursal of such amount. The Scheme framed is  also significant. Clause 10 of the Scheme  provides  for the  claims  and  relief funds  and  includes  disbursal  of amounts  as relief including interim relief to  persons  af- fected  by  the Bhopal gas leak disaster  and  Clause  11(1) stipulates  that disbursal of any amounts under  the  scheme shall  be made by the Deputy Commissioner to  each  claimant through credit in a bank or postal saving account, stressing that the legislative policy underlined 687 the  Bhopal Act contemplated payment of interim relief  till such time as the’ Central Govt. was able to recover from the Union  Carbide  full amount of compensation from  which  the interim  reliefs already paid were to be deducted  from  the amount  payable  to them for the final  disbursal.  The  Act should be construed as creating an obligation oh the Central Govt. to pay interim relief as the Act deprives the  victims of normal and immediate right of obtaining compensation from the Union Carbide. Had the Act not been enacted, the victims could have and perhaps would have been entitled not only  to sue  the  Union Carbide themselves, but also to  enter  into settlement or compromise of some sort with them. The  provi- sions  of the Act deprived the victims of that  legal  right and opportunity, and that deprivation is substantial  depri- vation  because  upon  immediate relief  depends  often  the survival  of these victims. In that background, it  is  just and proper that this deprivation is only to be justified  if the  Act  is read with the obligation  of  granting  interim relief  or maintenance by the Central Government  until  the full amount of the dues of the victims is realised from  the Union  Carbide  after adjudication or  settlement  and  then deducting therefrom the interim relief paid to the  victims. As  submitted by learned Attorney General, it is  true  that there  is no actual expression used in the Act itself  which expressly postulates or indicates such a duty or  obligation under the Act. Such an obligation is, however, inherent  and must  be the basis of properly construing the spirit of  the Act.  In our opinion, this is the true basis and will be  in consonance  with the spirit of the Act. It must be,  to  use the well-known phrase ’the major inarticulate premise’  upon which  though not expressly stated, the Act proceeds. It  is on this promise or premise that the State would be justified in  taking upon itself the right and obligation  to  proceed and prosecute the claim and deny access to the courts of law to  the victims on their own. If it is only so read, it  can only  be  held to be constitutionally valid. It  has  to  be borne in mind that the language of the Act does not militate against  this construction but on the contrary, Sections  9,

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10  and the scheme of the Act suggest that the Act  contains such an obligation. If it is so read, then only meat can  be put  into the skeleton of the Act making it  meaningful  and purposeful.  The Act must, therefore, be so read.  This  ap- proach to the interpretation of the Act can legitimately  be called  the ’constructive intuition’ which, in our  opinion, is a permissible mode of viewing the Acts of Parliament. The freedom to search for ’the spirit of the Act’ or the quanti- ty of the mischief at which it is aimed (both synonymous for the intention of the parliament) opens up the possibility of liberal  interpretation "that delicate and important  branch of judicial power, the concession of which is dangerous, the denial ruinous". Given this freedom it is a rare 688 opportunity though never to be misused and challenge for the Judges to adopt and give meaning to the Act, articulate  and inarticulate,  and thus translate the intention of the  Par- liament and fulfil the object of the Act. After all, the Act was  passed  to  give  relief to the  victims  who,  it  was thought, were unable to establish their own rights and fight for themselves. it is common knowledge that the victims were poor  and  impoverished.  How could they  survive  the  long ordeal of litigation and ultimate execution of the decree or the  orders unless provisions be made for  their  sustenance and maintenance, especially when they have been deprived  of the  fight to fight for these claims themselves? We,  there- fore, read the Act accordingly.     102. It was, then, contended that the Central Govt.  was not  competent to represent the victims. This  argument  has been  canvassed on various grounds. It has been  urged  that the  Central Govt. owns 22% share in UCIL and as such  there is a conflict of interest between the Central Govt. and  the victims,  and  on that ground the former is  disentitled  to represent the latter in their battle against UCC and UCIL. A large  number  of  authorities on this  aspect  were  cited. However,  it is not necessary in the view we have  taken  to deal with these because factually the Central Govt. does not own  any share in UCIL. These are the statutory  independent organisations,  namely, Unit Trust of India and Life  Insur- ance Corporation, who own 20 to 22% share in UCIL. The Govt. has certain amount of say and control in LIC and UTI. Hence, it  cannot be said, in our opinion, that there is  any  con- flict of interest in the real sense of the matter in respect of  the claims of Bhopal gas leak disaster between the  Cen- tral Govt. and the victims. Secondly, in a situation of this nature,  the Central Govt. is the only authority  which  can pursue  and effectively represent the victims. There  is  no other  organisation or Unit which can effectively  represent the  victims.  Perhaps, theoretically, it  might  have  been possible to constitute another independent statutory body by the  Govt.  under its control and supervision  in  whom  the claim of the victims might have been vested and  substituted and  that  Body could have been entrusted with the  task  of agitating or establishing the same claims in the same manner as  the Central Govt. has done under the Act. But  the  fact that that has not been done, in our opinion, does not in any way  affect  the position. Apart from that, lastly,  in  our opinion,  this  concept that where there is  a  conflict  of interest,  the  person  having the conflict  should  not  be entrusted  with the task of this nature, does not  apply  in the  instant situation. In the instant case, no question  of violation  of the principle of natural justice  arises,  and there is no scope for the application of the principle  that no man should be a Judge in his own cause. The Central 689

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Govt.  was not judging any claim, but was fighting  and  ad- vancing  the claims-of the victims. In those  circumstances, it cannot be said that there was any violation of the  prin- ciples  of natural justice and such entrustment to the  Cen- tral  Govt.  of the right to ventilate for the  victims  was improper  or  bad.  The adjudication would be  done  by  the courts, and therefore there is no scope of the violation  of any principle of natural justice.     103.  Along with this submission, the argument was  that the power and the right given to the Central Govt. to  fight for the claims of the victims, is unguided and  uncanalised. This submission cannot be accepted. Learned Attorney General is  right that the power conferred on the Central  Govt.  is not  uncanalised. The power is circumscribed by the  purpose of the Act. If there is any improper exercise or  transgres- sion  of  the power then the exercise of that power  can  be called in question and set aside, but the Act cannot be said to be violative of the rights of the victims on that  score. We have noted the relevant authorities on the question  that how power should be exercised is different and separate from the  question  whether the power is valid or not.  The  next argument  on behalf of the victims was that there  was  con- flict  of interest between the victims and the Govt.  viewed from  another aspect of the matter. It has been  urged  that the  Central  Govt. as well as the Govt. of  Madhya  Pradesh along  with  the erstwhile Chief Minister of  the  State  of Madhya  Pradesh Shri Arjun Singh were guilty of  negligence, malfeasance  and non-feasance, and as such were  liable  for damages  along with Union Carbide and UCIL. In other  words, it  has been said that the Govt. of India and the  Govt.  of Madhya  Pradesh along with Mr. Arjun Singh are  joint  tort- feasors and joint wrong doers. Therefore. it was urged  that there  is  conflict  of interest in respect  of  the  claims arising  out of the the gas leak disaster between the  Govt. of  India  and  the victims and in such a  conflict,  it  is improper, rather illegal and unjust to vest in the Govt.  of India the rights and claims of the victims. As noted before, the  Act was passed in a particular background and,  in  our opinion,  if  read in that background,  only  covers  claims against Union Carbide or UCIL. "Bhopal gas leak disaster" or "disaster" has been defined in clause (a) of Section (2)  as the  occurrence  on the 2nd and 3rd days of  December,  1984 which involved the release of highly noxious and  abnormally dangerous  gas from a plant in Bhopal (being a plant of  the UCIL, a subsidiary of the UCC of U.S.A.) and which  resulted in  loss  of  life and damage to property  on  an  extensive scale. 690     104. In this context, the Act has to be understood  that it is in respect of the person responsible, being the person in-charge-of  the  UCIL  and the parent  company  UCC.  This interpretation  of  the Act is further strengthened  by  the fact  that  a "claimant" has been defined in clause  (c)  of Section  2 as a person who is entitled to make a  claim  and the  expression "person" in Section 2(e) includes the  Govt. Therefore,  the  Act proceeded on the  assumption  that  the Govt.  could be a claimant being a person as such.  Further- more,  this construction and the perspective of the  Act  is strengthened  if a reference is made to the debate  both  in the Lok Sabha and Rajya Sabha to which references have  been made.     105.  The question whether there is scope for the  Union of India being responsible or liable as a joint tort  feasor is  a  difficult and different question. But  even  assuming that  it was possible that the Central Government  might  be

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liable in a case of this nature, the learned Attorney Gener- al was right in contending that it was only proper that  the Central  Government should be able and authorised to  repre- sent  the  victims. In such a situation, there  will  be  no scope of the violation of the principles of natural justice. The doctrine of necessity would be applicable in a situation of  this nature. The doctrine has been elaborated, in  Hals- bury’s  Laws of England, 4th Edition, p, 89,  paragraph  73, where it was reiterated that even if all the members of  the Tribunal  competent  to determine a matter were  subject  to disqualification,  they might be authorised and  obliged  to hear  that matter, by virtue of the operation of the  common law doctrine of necessity,, An adjudicator who is subject to disqualification  on the ground of bias or interest  in  the matter  which he has to decide may in certain  circumstances be required to adjudicate if there is no other person who is competent  or  authorised to be adjudicator or if  a  quorum cannot be formed without him or if no other competent tribu- nal can be constituted. In the circumstances of the case, as mentioned  hereinbefore,  the Government of  India  is  only capable  to represent the victims as a party. The  adjudica- tion, however, of the claims would be done by the Court.  In those  circumstances, we are unable to accept the  challenge on  the  ground of the violation of  principles  of  natural justice on this score. The learned Attorney General,  howev- er,  sought  to advance, as we have  indicated  before,  his contention  on the ground of de facto validity. He  referred to certain decisions. We are of the opinion that this  prin- ciple  will not be applicable. We are also not impressed  by the plea of the doctrine of bona fide representation of  the interests of victims in all these proceedings. We are of the opinion  that the doctrine of bonafide representation  would not be quite relevant and as 691 such  the  decisions cited by the learned  Attorney  General need not be considered.     106.  There is, however, one other aspect of the  matter which requires consideration. The victims can be divested of their rights i.e. these can be taken away from them provided those  rights of the victims are ensured to  be  established and  agitated by the Central Govt. following  the  procedure which  would be just, fair and reasonable.  Civil  Procedure Code  is  the guide which guides civil proceedings  in  this country  and  in  other countries procedure  akin  to  Civil Procedure  Code. Hence, these have been recognised  and  ac- cepted  as  being  in consonance with the  fairness  of  the proceedings and in conformity with the principles of natural justice.  Therefore, the procedure envisaged under  the  Act has  to be judged whether it is so consistent. The  Act,  as indicated before. has provided the procedure under  sections 3 and 4. Section 11 provides that the provisions of the  Act and  of any Scheme flamed thereunder shall have effect  not- withstanding  anything inconsistent therewith  contained  in any  enactment other than the Act or any  instrument  having effect by virtue of any enactment other than the Act. Hence, if anything is inconsistent with the Act for the time being, it  will  not  have force and the Act  will  override  those provisions  to the extent it does. The Act has not  specifi- cally  contemplated  any  procedure to be  followed  in  the action  to be taken pursuant to the powers  conferred  under section 3 except to the extent indicated in section 4 of the Act.  Section 5, however, authorises the Central  Government to  have  the  powers of a civil court for  the  purpose  of discharging  the functions pursuant to the authority  vested under  sections 3 and 4 of the Act. There is no question  of

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Central  Government  acting  as a court in  respect  of  the claims  which it should enforce for or on behalf or  instead of  the  victims of the Bhopal gas leak  disaster.  In  this connection,  it is necessary to note that it  was  submitted that  the  Act, so far as it deals with the  claims  of  the victims,  should be read in conformity with Civil  Procedure Code  and/or  with the principles of  natural  justice;  and unless  the  provisions of/the Act are so read it  would  be violative  of Articles 14 and 21 of the Constitution in  the sense  that there will be deprivation of rights to/fife  and liberty  without following a procedure which is  just,  fair and  reasonable. That is the main submission and  contention of the different counsel for the victims who have  appeared. The  different  view points from which this  contention  has been canvassed have been noted before. On the other hand, on behalf  of the Government, the learned Attorney General  has canvassed  before us that there were  sufficient  safeguards consistent  with  the principles of natural  justice  within this Act and beyond what has been provided for 692 in  a situation for which the Act was enacted, nothing  more could be provided and further reading down the provisions of the Act in the manner suggested would defeat the purpose  of the Act. The aforesaid section 3 provides for the  substitu- tion of the Central Government with the’ right to  represent and act in place of (whether within or outside India)  every person  who  has made, or is entitled to make,  a  claim  in respect of the disaster. The State has taken over the rights and claims of the victims in the exercise of sovereignty  in order  to  discharge the constitutional obligations  as  the parent  and guardian of the victims who in the situation  as placed  needed the umbrella of protection. Thus,  the  State has  the power and jurisdiction and for this purpose  unless the  Act is otherwise unreasonable or violative of the  con- stitutional  provisions, no question of giving a hearing  to the  parties  for  taking over these  fights  by  the  State arises.  For legislation by the Parliament, no principle  of natural  justice is attracted provided such  legislation  is within  the competence of the legislature, which indeed  the present  Act is within the competence of the Parliament.  We are in agreement with the submission of the learned Attorney General  that  section 3 makes the  Central  Government  the dominus  litis and it has the carriage of  the  proceedings, but that does not solve the problem of by what procedure the proceedings should be carried.     107.  The  next  aspect is that section 4  of  the  Act, which,  according  to  the learned  Attorney  General  gives limited  rights to the victims in the sense that it  obliges the  Central  Government to have due regard to  any  matters which  such person may require to be urged with  respect  to his  claim and shall, if such person so desires,  permit  at the  expense  of such person, a legal  practitioner  of  his choice to be associated in the conduct of any suit or  other proceeding relating to his claim". Therefore, it obliges the Central Government to have ’due regard’ to any matters,  and it  was urged on behalf of the victims that this  should  be read in order to make the provisions constitutionally  valid as providing that the victims will have a say in the conduct of  the proceedings and as such must have an opportunity  of knowing  what is happening either by instructing  or  giving Opinions to the Central Government and/or providing for such directions  as  to settlement and other  matters.  In  other words,  it was contended on behalf of the victims  that  the victims should be given notice of the proceedings and there- by an opportunity, if they so wanted, to advance their view:

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and  that  to  make the provisions of s.  4  meaningful  and effective unless notice was given to the victim, disabled as he  is, the assumption upon which the Act has been  enacted, could  not come and make suggestion in the  proceedings.  If the  victims are not informed and given no opportunity,  the purpose of s. 4 cannot be attained. 693     108.  On  the other hand, the learned  Attorney  General suggested  that s. 4 has been complied with,  and  contended that  the  victims had notice of the proceedings.  They  had knowledge of the suit in America, and of the order passed by Judge Keenan. The private plaintiffs who had gone to America were  represented  by foreign contingency lawyers  who  knew fully well what they were doing and they had also joined the said suit along with the Government of India. Learned Attor- ney  General submitted that s. 4 of the Act  clearly.enabled the victims to exercise their right of participation in  the proceedings.  According to him, there was exclusion of  vic- tims from the process of adjudication but a limited partici- pation was provided and beyond that participation no further participation was warranted and no further notice was  just- fied  either by the provisions of the Act as read  with  the constitutional requirements or under the general  principles of  natural  justice. He submitted that  the  principles  of natural  justice cannot be put into strait jacket and  their application  would depend upon the particular facts and  the circumstances  of  a  situation. According  to  the  learned Attorney  General, in the instant case, the legislature  had formulated the area where natural justice could be  applied, and  upto what area or stage there would be  association  of the  victims with the suit, beyond that no further  applica- tion of any principle of natural justice was contemplated.     109.  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 19(1)(g) and negate Article 21 of the Constitution by  deny- ing  a procedure which is just, fair and reasonable. See  in this  connection, the observations of this Court  in  Maneka Gandhi’s  case (supra) and Olga Tellis’s case (supra).  Some of these aspects were noticed in the decision of this  Court in Swadeshi Cotton Mills v. Union of India (supra). That was a  decision which dealt with the question of taking over  of the industries under the Industries (Development and Regula- tion) Act, 1951. The question that arose was whether it  was necessary  to  observe the rules of natural  justice  before issuing  a notification under section 18A(1) of the Act.  It was held by the majority of Judges that in the facts of that case there had been non-compliance with the implied require- ment  of the audi alteram partem rule of natural justice  at the  pre-decisional stage. The order in that case  could  be struck  down  as invalid on that score but the  court  found that  in view of the concession a heating would be  afforded to the company, the case was remitted 694 to the Central Government to give a full, fair and effective hearing.  It was held that the phrase ’natural  justice’  is not  capable of static and precise definition. It could  not be imprisoned in the straight-jacket or a cast-iron formula. Rules  of natural justice are not embodied rules. Hence,  it was  not  possible to make an exhaustive catalogue  of  such rules.  This Court reiterated that audi ateram partem  is  a highly effective rule devised by the Courts to ensure that a

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statutory  authority  arrives at a just decision and  it  is calculated to act as a healthy check on the abuse or  misuse of  power. The rules of natural justice can operate only  in areas  not  covered  by any law validly  made.  The  general principle as distinguished from an absolute rule of  uniform application  seems  to be that where a statute does  not  in terms exclude this rule of prior hearing but contemplates  a post-decisional  hearing amounting to a full review  of  the original  order on merits then such a statute would be  con- strued  as  excluding the audi alteram partem  rule  at  the pre-decisional stage. If the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to  the  person affected the administrative  decision  after post-decisional hearing was good.     110.  The principles of natural justice have been  exam- ined  by  this Court in Union of India & Anr. v.  Tulsi  Ram Patel  & Ors., (supra). It was reiterated, that the  princi- ples  of natural justice are not the creation of Article  14 of  the  Constitution. Art. 14 is not the  begetter  of  the principles  of  natural  justice  but  their  constitutional guardian.  The principles of natural justice consist,  inter alia,  of  the requirement that no man should  be  condemned unheard.  If, however, a legislation or a Statute  expressly or by necessary implication excludes the application of  any particular  principle  of natural justice then  it  requires close Scrutiny of the Court.     111. It has been canvassed on behalf of the victims that the Code of Civil Procedure is an instant example of what is a just, fair and reasonable procedure, at least the  princi- ples  embodied therein and the Act would be unreasonable  if there  is  exclusion of the victims  to  vindicate  properly their views and rights. This exclusion may amount to  denial of  justice. In any case, it has been suggested and  in  our opinion,  there  is good deal of force in  this  contention, that  if  a part of the claim, for good reasons or  bad,  is sought  to be compromised or adjusted without at least  con- sidering the views of the victims that would be unreasonable deprivation of the rights of the victims. After all, it  has to be borne in mind that injustice consists in the sense  in the  minds of the people affected by any act or  inaction  a feeling  that  their grievances. views or claims  have  gone ’unheeded or not considered. Such a 695 feeling  is  in  itself an injustice or  a  wrong.  The  law must,be  so  construed and implemented that such  a  feeling does not generate among the people for whose benefit the law is made. Right to a hearing or representation before  enter- ing into a compromise seems to be embodied in the due  proc- ess of law understood in the sense the term has been used in the constitutional jargon of this country though perhaps not originally  intended. In this connection, reference  may  be made  to  the  decision of this Court in  Sangram  Singh  v. Election Tribunal, Kotah, [1955] 2 SCR 1. The Representation of  the People Act, 1951 contains section 90 and the  proce- dure of Election Tribunals under the Act was governed by the said provision. Sub-section (2) of section 90 provides  that "Subject to the provisions of this Act and of any rules made thereunder,  every election petition shall be tried  by  the Tribunal, as nearly as may be, in accordance with the proce- dure  applicable under the Code of Civil Procedure, 1908  to the  trial  of suits". Justice Bose speaking for  the  court said that it is procedure, something designed to  facilitate justice and further its ends, and cannot be considered as  a penal  enactment  for punishment or penalties; not  a  thing designed  to  trip people up rather then help them.  It  was

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reiterated  that our laws of procedure are grounded  on  the principle of natural justice which requires that men  should not  be  condemned  unheard, that decisions  should  not  be reached  behind  their backs, that proceedings  that  affect their  lives and property should not continue in  their  ab- sence and that they should not be precluded from participat- ing  in them. Of course, there may be exceptions  and  where they are clearly defined these must be given effect to.  But taking  by and large, and subject to that proviso, our  laws of procedure should be construed, wherever that is  reasona- bly  possible, in the light of that principle. At page 9  of the report, Justice Bose observed as under:               "But  that a law of natural justice exists  in               the  sense  that a party must be  heard  in  a               Court  of laW, or at any rate be  afforded  an               opportunity  to  appear  and  defend  himself,               unless  there  is  express  provision  to  the               contrary,  is, we think, beyond  dispute.  See               the  observations  of  the  Privy  Council  in               Balakrishna Udayar v. Vasudeva Ayyar, (ILR  40               Mad.  793, 800) and especially in T.M.  Barter               v.  African Products Ltd., (AIR 1928  PC  261)               where Lord Buckmaster said "no forms or proce-               dure  should ever be permitted to exclude  the               presentation  of a litigant’s  defence".  Also               Hari Vishnu’s case which we have just quoted.               In our opinion, Wallace J. was right in Venka-               tasubbiah v.               696               Lakshminarasimham,  (AIR  1925 Mad.  1274)  in               holding  that  "One cardinal principle  to  be               observed  in  trials by a Court  obviously  is               that  a party has a right to appear and  plead               his  cause  on all occasions when  that  cause               comes  on for hearing", and that  "It  follows               that  a party should not be deprived  of  that               right  and in fact the Court has no option  to               refuse  that right, unless the Code  of  Civil               Procedure deprives him of it".     112.  All  civilised countries accept the  right  to  be heard  as  part of the due process of  law  where  questions affecting their rights, privileges or claims are  considered or adjudicated.     113. In S.L. Kapoor v. Jagmohan & Ors., [1981] 1 SCR 746 at 765, Chinnappa Reddy, J. speaking for this Court observed that the concept that justice must not only be done but must manifestly  be seen to be done, is basic to our  system.  It has  been reiterated that the principles of natural  justice know  of no exclusionary rule dependent on whether it  would have  made  any difference if natural justice had  been  ob- served.  The  non-observance of natural  justice  is  itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary and it has been  said  that it will come from a person who  has  denied justice that the person who has been denied justice, is  not prejudiced.  Principles of natural justice must,  therefore, be followed. That is the normal requirement:     114. In view of the principles settled by this Court and accepted  all over the world, we are of the opinion that  in case  of  this magnitude and nature, when the  victims  have been  given  some say by Section 4 of the Act, in  order  to make that opportunity contemplated by section 4 of the  Act, meaningful  and  effective, it should be so  read  that  the victims  have  to be given an opportunity  of  making  their representation  before the court comes to any conclusion  in

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respect  of any settlement. How that opportunity  should  be given,  would  depend upon the  particular  situation.  Fair procedure  should be followed in a representative mass  tort action.  There  are instances and some of  these  were  also placed  before us during the hearing of these matters  indi- cating  how  the  courts regulate giving of  the  notice  in respect  of  a mass action where large  number  of  people’s views  have  to  be ascertained. Such  procedure  should  be evolved by the court when faced with such a situation. 115.  The Act does not expressly exclude the application  of the 697 Code of Civil Procedure. Section 11 of the Act provides  the overriding effect indicating that anything inconsistent with the  provisions of the Act in other law including the  Civil Procedure Code should be ignored and the Act should prevail. Our  attention was drawn to the provisions of Order  1  Rule 8(4) of the Code. Strictly speaking, Order 1 Rule 8 will not apply  to a suit or a proceeding under the Act. It is not  a case  of  one having common interest with others.  Here  the plaintiff,  the Central Govt. has replaced and divested  the victims.     116.  Learned  Attorney General submitted  that  as  the provisions of the Code stood before 1976 Amendment, the High Courts had taken the view that hearing of the parties repre- sented  in the suit, was not necessary,  before  compromise. Further reference was made to proviso to Order XXIII Rule 1. As  in  this case there is no question, in our  opinion,  of abandonment  as  such of the suit or part of the  suit,  the provisions  of  this  Rule would also  not  strictly  apply. However, Order XXIII Rule 3B of the Code is an important and significant  pointer  and  the principles  behind  the  said provision  would apply to this case. The said rule  3B  pro- vides  that no agreement or compromise in  a  representative suit  shall be entered into without the leave of  the  court expressly  recorded in the proceedings; and sub-rule (2)  of rule  3B enjoins that before granting such leave  the  court shall  give notice in such manner as it may think fit  in  a representative action. Representative suit, again, has  been defined  under Explanation to the said rule vide clause  (d) as any other suit in which the decree passed may, by  virtue of  the provisions of this Code or of any other law for  the time  being  in force, bind any person who is not  named  as party  to  the suit. In this case, indubitably  the  victims would  be  bound by the settlement though not named  in  the suit. This is a position conceded by all. If that is so,  it would  be  a  representative suit in terms of  and  for  the purpose of Rule 3B of Order XXIII of the Code. If the  prin- ciples  of this rule are the principles of  natural  justice then  we  are of the opinion that the principles  behind  it would  be applicable; and also that section 4 should  be  so construed  in  spite of the difficulties of the  process  of notice  and other difficulties of making "informed  decision making  process  cumbersome", as canvassed  by  the  learned Attorney General.     117.  In our opinion, the  constitutional  requirements, the language of the Section, the purpose of the Act and  the principles of natural justice lead us to this interpretation of  Section 4 of the Act that in case of a proposed or  con- templated settlement, notice should be given to the  victims who  are  affected  or whose rights are to  be  affected  to ascertain their views. Section 4 is significant. It  enjoins the Central 698 Govt.  only  to have "due regard to any matters  which  such

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person  may require to be urged". So, the obligation  is  on the Central Govt. in the situation contemplated by Section 4 to  have  due regard to the views of the  victims  and  that obligation cannot be discharged by the Central Govt.  unless the victims are told that a settlement is proposed, intended or  contemplated. It is not necessary that such views  would require consent of all the victims. The Central Govt. as the representative  of  the victims must have the views  of  the victims and place such views before the court in such manner it considers necessary before a settlement is entered  into. If  the  victims  want to advert to certain  aspect  of  the matter  during the proceedings under the Act and  settlement indeed is an important stage in the proceedings,  opportuni- ties  must be given to the victims. Individual  notices  may not be necessary. The Court can, and in our opinion,  should in such situation formulate modalities of giving notice  and public  notice can also be given inviting views of the  vic- tims by the help of mass media. 118. Our attention was drawn to similar situations in  other lands ,  where in mass disaster actions of the present  type or  mass calamity actions affecting large number of  people, notices  have  been given in different forms and it  may  be possible to invite the views of the victims by  announcement in  the  media,  Press, Radro, and TV  etc.  intimating  the victims that a certain settlement is proposed or contemplat- ed  and  inviting views of the victims within  a  stipulated period.  And having regard to the views, the  Central  Govt. may  proceed with the settlement of the action.  Consent  of all is not a pre-condition as we read the Act under  Section 4. Hence, the difficulties suggested by the learned Attorney General  in having the consent of all and unanimity, do  not really  arise  and should not deter us from  construing  the section as we have.      119.  The next aspect of the matter is, whether in  the aforesaid  light Section 4 has been complied with. The  fact that there was no Learned Attorney General, however, sought to canvas the view that the victims had notice and some of them had participat- ed in the proceedings. We are, however, unable to accept the position  that the victims had notice of the nature  contem- plated  under the Act upon the underling principle of  Order XXIII Rule 3B of the Code. It is not enough to say that  the victims  must keep vigil and watch the proceeding.  One  as- sumption  under which the Act is justified is that the  vic- tims were disabled to defend themselves in an action of this type.  If that is   so, then the Court cannot  presume  that the victims were a lot, capable 699 and informed to be able to have comprehended or contemplated the settlement. In the aforesaid view of the matter, in  our opinion, notice was necessary. The victims at large did  not have the notice.     120.  The question, however, is that the settlement  had been arrived at after great deal of efforts to give  immedi- ate  relief to the victims. We have noticed the order  dated 4th  May, 1989 passed by this Court indicating  the  reasons which  impelled  the  Court to pass the  orders  on  14/15th February,  1989 in terms and manner as it did. It  has  been urged  before us on behalf of some of the victims that  jus- tice has not been done to their views and claims in  respect of the damages suffered by them. It appears to us by reading the  reasons given by this Court on 4th May, 1989 that  jus- tice perhaps has been done but the question is, has  justice appeared to have been done and more precisely, the  question before  this Court is: does the Act envisage a procedure  or

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contemplate a procedure which ensures not only that  justice is done but justice appears to have been done. If the proce- dure does not ensure that justice appears to have been done, is it valid? Therefore, in our opinion, in the background of this question we must hold that Section 4 means and  entails that  before  entering  into any  settlement  affecting  the rights  and  claims of the victims some kind  of  notice  or information should be given to the victims; we need not  now spell out the actual notice and the manner of its giving  to be  consistent with the mandate and purpose of section 4  of the Act.     121.  This  Court in its order dated 4th May,  1989  had stated  that in passing orders on 14th/15th February,  1989, this Court was impelled by the necessity of urgent relief to the victims rather than to depend upon the uncertain promise of law. The Act, as we have construed, requires notice to be given  in  what  form and in what manner,  it  need  not  be spelled out, before entering into any settlement of the type with  which we are concerned. It further appears  that  that type  of notice which is required to be given had  not  been given.  The question, therefore, is what is to be  done  and what  is the consequence? The Act would be bad if it is  not construed  in  the light that notice before  any  settlement under S. 4 of the Act was required to be given. Then  arises the  question of consequences of not giving the  notice.  In this  adjudication, we are not strictly concerned  with  the validity or otherwise of the settlement, as we have indicat- ed  hereinbefore. But constitutional adjudication cannot  be divorced  from the reality of a situation, or the impact  of an adjudication. Constitutional deductions are never made in the  vacuum. These deal with life’s problems in the  reality of a given situation. And no constitutional adjudication  is also possible unless 700 one  is aware of the consequences of such  an  adjudication. One  hesitates  in matters of this type where  large  conse- quences  follow  one way or the other to put as  under  what others  have  put together. It is well to remember,  as  did Justice Holmes, that time has upset many fighting faiths and one  must  always wagar one’s salvation upon  some  prophecy based  upon imperfect knowledge. Our knowledge changes;  our perception of truth also changes. It is true that notice was required  to  be given and notice has not  been  given.  The notice  which  we have contemplated is a notice  before  the settlement  or what is known in legal terminology  as  ’pre- decisional notice’. But having regard to the urgency of  the situation and having regard to the need for the victims  for relief  and help and having regard to the fact that so  much effort  has gone in finding a basis for the settlement,  we, at one point of time, thought that a post-decisional hearing in the facts and circumstances of this case might be consid- ered  to be sufficient compliance with the  requirements  of principles of natural justice as embodied under s. 4 of  the Act. The reasons that impelled this Court to pass the orders of 14th/15th February, 1989 are significant and  compelling. If  notice was given, then what would have happened? It  has been  suggested on behalf of the victims by counsel that  if the victims had been given an opportunity to be heard,  then they  would have perhaps pointed out, inter alia,  that  the amount  agreed to be paid through the settlement  was  hope- lessly  inadequate. We have noted the evidence available  to this Court which this Court has recorded in its order  dated 4th  May, 1989 to be the basis for the figure at  which  the settlement  was arrived at. It is further suggested that  if an  opportunity had been given before the  settlement,  then

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the victims would have perhaps again pointed out that crimi- nal  liability could not be absolved in the manner in  which this Court has done on the 14th/l5th February, 1989. It  was then  contended that the Central Government was itself  sued as  a joint tort feasor. The Central Government would  still be liable to be proceeded in respect of any liability to the victims  if such a liability is established; that  liability is in no way abridged or affected by the Act or the  settle- ment entered into. It was submitted on behalf of the victims that  if  an  opportunity had been given,  they  would  have perhaps  pointed out that the suit against the Central  Gov- ernment,  Government  of Madhya Pradesh and UCIL  could  not have been settled by the compromise. It is further-suggested that if given an opportunity, it would have been pointed out that the UCIL should have also been sued. One of the  impor- tant  requirements of justice is that people affected by  an action  or  inaction should have opportunity to  have  their say. That opportunity the victims have got when these appli- cations were heard and they were heard after utmost publici- ty and they would have further 701 opportunity  when review application against the  settlement would be heard.     122. On behalf of the victims, it was suggested that the basis  of damages in view of the observations made  by  this Court  in M.C. Mehta’s case (supra) against the  victims  of UCC or UCIL would be much more than normal damages  suffered in similar case against any other company or party which  is financially not so solvent or capable. It was urged that  it is time in order to make damages deterrent the damages  must be  computed  on the basis of the capacity of  a  delinquent made liable to pay such damages and on the monitory capacity of  the delinquent the quantum of the damages awarded  would vary and not on the basis of actual consequences suffered by the  victims.  This is an uncertain promise of law.  On  the basis of evidence available and on the basis of the  princi- ples  so  far established, it is difficult  to  foresee  any reasonable possibility of acceptance of this yardstick.  And even  if it is accepted, there are numerous difficulties  of getting  that view accepted internationally as a just  basis in accordance with law. These, however, are within the realm of possibility.     123. It was contended further by Shri Garg, Shri  Shanti Bhushan  and  Ms. Jaising that all the  further  particulars upon which the settlement had been entered into should  have been  given  in the’ notice which was required to  be  given before  a  settlement  was sanctified or  accepted.  We  are unable to accept this position. It is not necessary that all other  particulars for the basis of the proposed  settlement should  be  disclosed in a suit of this  nature  before  the final  decision. Whatever data was already there  have  been disclosed, that, in our opinion, would have been  sufficient for the victims to be able to give their views, if they want to.  Disclosure of further particulars are not warranted  by the  requirement of principles of natural  justice.  Indeed, such  disclosure in this case before finality might  jeopar- dise  luther  action, if any, necessary so  consistent  with justice of the case.     124.  So on the materials available, the  victims  would have to express their views. The victims have not been  able to show at all any other point or material which would go to impeach  the validity of the settlement. Therefore,  in  our opinion,  though  settlement  without notice  is  not  quite proper,  on  the materials so far available, we are  of  the opinion  that justice has been done to the victims but  jus-

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tice  has  not appeared to have been done. In  view  of  the magnitude  of the misery involved and the problems  in  this case,  we are also of the opinion that the setting aside  of the settlement on this ground in view of the facts 702 and the circumstances of this case keeping the settlement in abeyance  and giving notice to the victims for a  post-deci- sional  hearing  would not be in the  ultimate  interest  of justice.  It is true that not giving notice, was not  proper because principles of natural justice are fundamental in the constitutional  set up of this country. No man or  no  man’s right should be affected without an opportunity to ventilate his  views. We are also conscious that justice is a  psycho- logical yearning, in which men seek acceptance of their view point by having an opportunity of vindication of their  view point before the forum or the authority enjoined or  obliged to  take a decision affecting their right. Yet, in the  par- ticular  situations, one has to bear in mind how an  infrac- tion  of that should be sought to be removed  is  accordance with  justice.  In the facts and the circumstances  of  this case  where sufficient opportunity is available when  review application  is  heard on notice, as directed by  Court,  no further opportunity is necessary and it cannot be said  that injustice has been done. "To do a great right" after all, it is  permissible  sometimes "to do a little  wrong".  In  the facts  and circumstances of the case, this is one  of  those rare  occasions. Though entering into a  settlement  without the  required notice is wrong, in the facts and the  circum- stances  of this case, therefore, we are of the opinion,  to direct that notice should be given now, would not result  in dain  justice in the situation. In the premises, no  further consequential order is necessary by this Court. Had it  been necessary for this Bench to have passed such a consequential order, we would not have passed any such consequential order in respect of the same.     125. The sections and the scheme dealing with the deter- mination of damages and distribution of the amount have also been  assailed as indicated before. Our attention was  drawn to  the  provisions of the Act dealing with the  payment  of compensation and the scheme framed therefore. It was submit- ted  that  section 6 of the Act enjoins appointment  by  the Central  Government of an officer known as the  Commissioner for  the welfare of the victims. It was submitted that  this does  not give sufficient judicial authority to the  officer and  would  be  really leaving the  adjudication  under  the scheme by an officer of the executive nature. Learned Attor- ney General has, however, submitted that for disbursement of the  compensation  contemplated under the Act or  under  the orders  of this Court, a notification would be issued  under section  6(3)  of the Act authorising  the  Commissioner  or other  officers to exercise all or any of the  powers  which the  Central  Government  may exercise under  section  6  to enable  the  victims  to place before  the  Commissioner  or Deputy Commissioner any additional evidence that they  would like to adduce. We direct so, and such appropriate notifica- 703 tion  be  issued. We further direct that in  the  scheme  of categorisation to be done by the Deputy Commissioner  should be  appealable to an appropriate judicial authority and  the Scheme should be modified accordingly. We reiterate that the basis of categorisation and the actual categorisation should be  justifiable and judicially reviewable-the provisions  in the  Act and the Scheme should be so read. There were  large number  of submissions made on behalf of the  victims  about amending the scheme. Apart from and to the extent  indicated

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above, in our opinion, it would be unsafe to tinker with the scheme  piecemeal. The scheme is an integrated whole and  it would not be proper to amend it piecemeal. We, however, make it  clear that in respect of categorisation and  claim,  the authorites must act on principles of natural justice and act quasi-judicially.     126.  As mentioned hereinbefore, good deal of  arguments were  advanced  before us as to whether the  clause  in  the settlement that criminal proceedings would not be  proceeded with  and the same will remain quashed is valid or  invalid. We  have  held that these are not part  of  the  proceedings under the Act. So the orders on this aspect in the order  of 14th/15th  February,  1989  are not orders  under  the  Act. Therefore, on the question of the validity of the Act,  this aspect  does  not arise whether the settlement  of  criminal proceedings or quashing the criminal proceedings could be  a valid consideration for settlement or whether if it was such a consideration or not is a matter which the court reviewing the settlement has to decide.     127.  In the premise, we hold that the Act is  constitu- tionally valid in the manner we read it. It proceeds on  the hypothesis that until the claims of the victims are realised or  obtained. from the delinquents, namely, UCC and UCIL  by settlement  or by adjudication and until the proceedings  in respect  thereof  continue the Central Government  must  pay interim  compensation  or maintenance for  the  victims.  In entering  upon  the settlement in view of s. 4 of  the  Act, regard  must be had to the views of the victims and for  the purpose  of  giving  regard to  these,  appropriate  notices before  arriving at any settlement, was necessary.  In  some cases,  however, post-decisional notice might be  sufficient but  in  the facts and the circumstances of  this  case,  no useful  purpose would be served by giving a  post-decisional hearing having regard to the circumstances mentioned in  the order of this Court dated 4th May, 1989 and having regard to the fact that there are no further additional data and facts available  with  the  victims which can  be  profitably  and meaningfully  presented to controvert the basis of the  set- tlement  and  further  having regard to the  fact  that  the victims had their say or on 704 their behalf their views had been agitated in these proceed- ings and will have further opportunity in the pending review proceedings.  No further order on this aspect is  necessary. The  sections dealing with the payment of  compensation  and categorisation should be implemented in the manner indicated before.     128.  The  Act  was conceived on the  noble  promise  of giving  relief  and  succour to the  dumb,  pale,  meek  and impoverished victims of a tragic industrial gas leak  disas- ter, a concomitant evil in this industrial age of technolog- ical  advancement and development. The Act had kindled  high hopes in the hearts of the. weak and worn, wary and forlorn. The  Act generated hope of humanity. The  implementation  of the Act must be with justice. Justice perhaps has been  done to  the victims situated as they were, but it is  also  true that  justice has not appeared to have been done. That is  a great infirmity. That is due partly to the fact that  proce- dure was not strictly followed as we have understood it  and also  partly because of the atmosphere that was  created  in the  country, attempts were made to shake the confidence  of the people in the judicial process and also to undermine the credibility  of this Court. This was unfortunate.  This  was perhaps  due to misinformed public opinion and also  due  to the  fact that victims were not initially taken into  confi-

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dence  in  reaching the settlement. This is a  factor  which emphasises  the  need  for adherence to  the  principles  of natural  justice. The credibility of judiciary is as  impor- tant  as  the alleviation of the suffering of  the  victims, great  as these were. We hope these adjudications  will  re- store  that credibility. Principles of natural  justice  are integrally  embedded  in our  constitutional  framework  and their  pristine glory and primacy cannot and should  not  be allowed  to  be submerged by the  exigencies  of  particular situations  or cases. This Court must always assert  primacy of  adherence  to the principles of natural justice  in  all adjudications.  But at the same time, these must be  applied in a particular manner in particular cases having regard  to the particular circumstances. It is, therefore, necessary to reiterate  that the promises made to the victims  and  hopes raised  in  their hearts and minds can only be  redeemed  in some  measure if attempts are made vigorously to  distribute the  amount realised to the victims in accordance  with  the scheme  as indicated above. That would be a redemption to  a certain extent. It will also be necessary to reiterate  that attempts  should be made to formulate the principles of  law guiding the Government and the authorities to permit  carry- ing on of trade dealing with materials and things which have dengerous consequences within sufficient specific safeguards especially in case of multinational corporations trading  in India. An awareness on these lines has dawned. Let 705 action follow that awareness. It is also necessary to  reit- erate that the law relating to damages and payment of inter- im  damages  or compensation to the victims of  this  nature should  be  seriously  and scientifically  examined  by  the appropriate agencies.     129.  The Bhopal Gas Leak disaster and its aftermath  of that  emphasise the need for laying down certain  norms  and standards  the Government to follow before granting  permis- sions or licences for the running of industries dealing with materials which are of dangerous potentialities. The Govern- ment should, therefore, examine or have the problem examined by  an expert committee as to what should be the  conditions on  which  future  licences and/or  permission  for  running industries on Indian soil would be granted and for  ensuring enforcement of those conditions, sufficient safety  measures should  be formulated and scheme of  enforcement  indicated. The Government should insist as a condition precedent to the grant of such licences or permissions, creation of a fund in anticipation  by the industries to be available for  payment of  damages  out of the said found in case  of  leakages  or damages in case of accident or disaster flowing from  negli- gent  working  of such industrial operations or  failure  to ensure  measures preventing such occurrence. The  Government should  also ensure that the parties must agree to abide  to pay such damages out of the said damages by procedure  sepa- rately evolved for computation and payment of damages  with- out  exposing the victims or sufferers of the negligent  act to the long and delayed procedure. Special procedure must be provided  for and the industries must agree as  a  condition for  the grant of licence to abide by such procedure  or  to abide  by  statutory arbitration. The basis for  damages  in case  of  leakages and accident should also  be  statutorily fixed  taking into consideration the nature of  damages  in- flicted, the consequences thereof and the ability and capac- ity  of  the parties to pay. Such should  also  provide  for deterrent or punitive damages, the basis for which should be formulated  by a proper expert committee or by  the  Govern- ment.  For  this  purpose, the Government  should  have  the

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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.     130. This case has taken some time. It was argued exten- sively. We are grateful to counsel who have assisted in  all these matters. We have reflected. We have taken some time in pronouncing  our decision. We wanted time to lapse  so  that the  heat of the moment may calm down and proper  atmosphere restored.  Justice,  it has been said, is the  constant  and perpetual disposition to render every man his due. But what 706 is a man’s due in a particular situation and in a particular circumstances  is a matter for appraisement and  adjustment. It  has  been said that justice is balancing.  The  balances have  always been the symbol of even-handed justice. But  as said  Lord  Denning in Jones v. National  Coal  Board  Ltd., [1957] 2 QB 55, at 64-let the advocates one after the  other put the weights into the scales--the ’nicely calculated less or  more’--but  the judge at the end decides which  way  the balance  tilts, be it ever so slightly. This is so in  every case and every situation.     13 1. The applications are disposed of in the manner and with the direction, we have indicated above.     SINGH,  J. 1 have gone through the proposed judgment  of my  learned brother, Sabyasachi Mukharji, CJI. I agree  with the  same but I consider it necessary to express my  opinion on certain aspects.    Five  years ago between the night of December  2-3,  1984 one of the most tragic industrial disasters in the  recorded history  of mankind occurred in the city of Bhopal,  in  the State  of Madhya Pradesh, as a result of which several  per- sons  died and thousands were disabled and physically  inca- pacitated  for  life. The ecology in and around  Bhopal  was adversely affected and air, water and the atmosphere waspol- luted,  its full extent has yet to be determined.  UnionCar- bide  India  Limited (UCIL) a subsidiary  of  Union  Carbide Corporation  (a Transnational Corporation of United  States) has  been manufacturing pesticides at its plant  located  in the city of Bhopal. In the process of manufacture of  pesti- cide the UCIL had stored stock of Methyl Isocyanate commonly known as MlC a highly toxic gas. On the night of the  trage- dy,  the MIC leaked from the plant in  substantial  quantity causing death and misery to the people working in the  plant and those residing around it. The unprecedented  catastrophe demonstrated the dangers inherent in the production of  haz- ardous  chemicals even though for the purpose of  industrial development. A number of civil suits for damages against the UCC  were filed in the United States of America and also  in this  Country. The cases filed in USA were referred back  to the  Indian  courts  by Judge Keenan details  of  which  are contained  in the judgment of my learned  brother  Mukharji, CJI. Since those who suffered in the catastrophe were mostly poor, ignorant, illiterate and ill-equipped to pursue  their claims  for  damages either before the courts in USA  or  in Indian  courts, the Parliament enacted the Bhopal  Gas  Leak Disaster  (Processing of Claims) Act 1985  (hereinafter  re- ferred  to  as ’the Act’) conferring power on the  Union  of India to take over the conduct of litigation in this  regard in place of the 707 individual claimants. The facts and circumstances which  led to  the  settlement  of the claims before  this  Court  have already  been stated in detail in the judgment of  Mukharji, CJI,  and  therefore, I need not refer to  those  facts  and circumstances.  The constitutional validity of the  Act  has

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been assailed before us in the present petitions. If the Act is  declared  unconstitutional,  the  settlement  which  was recorded  in  this Court, under which the  UCC  has  already deposited  a sum of Rs.750 crores for meeting the claims  of Bhopal Gas victims, would fall and the amount of money which is already in deposit with the Registry of this Court  would not  be  available for relief to the victims. Long  and  de- tailed  arguments  were advanced before us for a  number  of days  and on an anxious consideration and having  regard  to the legal and constitutional aspects and especially the need for  immediate  help and relief to the victims  of  the  gas disaster,  which  is  already delayed, we  have  upheld  the constitutional  validity of the Act. Mukharji, CJI has  ren- dered  a  detailed and elaborate judgment with which  I  re- spectfully  agree. However, I consider it necessary  to  say few words with regard to the steps which should be taken  by the Executive and the Legislature to prevent such tragedy in future  and to avoid the prolonged misery of victims  of  in industrial disaster.     We are a developing country, our national resources  are to be developed in the field of science, technology,  indus- try and agriculture. The need for industrial development has led to the establishment of a number of plants and factories by  the domestic companies and under industries are  engaged in  hazardous or inherently dangerous activities which  pose potential  threat  to  life, health and  safety  of  persons working  in  the  factory, or residing  in  the  surrounding areas. Though working of such factories and plants is  regu- lated by a number of laws of our country, i.e. the Factories Act, Industrial Development and Regulation Act and Workmen’s Compensation  Act etc. there is no special legislation  pro- viding  for  compensation and damages to outsiders  who  may suffer  on  account of any industrial accident. As  the  law stands  to-day,  affected  persons have  to  approach  civil courts  for  obtaining compensation and  damages.  In  civil courts,  the  determination  of amount  of  compensation  or damages as well as the liability of the enterprise has  been bound  by the shackles of conservative principles laid  down by the House of Lords in Ryland v. Herchief, [1868] LR 3  HL page  330. The principles laid therein made it difficult  to obtain  adequate  damages from the enterprise and  that  too only after the negligence of the enterprise was proved. This continued  to  be the position of law, till  a  Constitution Bench of this Court in M.C. Mehta 708 v.  Union  of  India, [1987] 1 SCC 420,  commonly  known  as Sriram Oleum Gas Leak case evolved principles and laid  down new  norms to deal adequately with the new problems  arising in a highly industrialised economy. This Court made judicial innovation in laying down principles with regard to liabili- ty of enterprises carrying hazardous or inherently dangerous activities  departing from the rule laid down in  Ryland  v. Fletcher. The Court held as under:               "We  are of the view that an enterprise  which               is  engaged in a hazardous or inherently  dan-               gerous industry which poses a potential threat               to  the"  health  and safety  of  the  persons               working  in  the factory and residing  in  the               surrounding  areas owes an absolute  and  non-               delegiable  duty  to the community  to  ensure               that no harm results to any one on account  of               hazardous  or inherently dangerous  nature  of               the  activity  which it  has  undertaken.  The               enterprise must be held to be under an obliga-               tion  to provide that the hazardous or  inher-

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             ently  dangerous activity in which it  is  en-               gaged  must  be  conducted  with  the  highest               standards of safety and if any harm results on               account of such activity, the enterprise  must               be  absolutely liable to compensate  for  such               harm and it should be no answer to the  enter-               prise to say that it had taken all  reasonable               care  and that the harm occurred  without  any               negligence  on  its part.  Since  the  persons               harmed  on account of the hazardous or  inher-               ently  dangerous  activity carried on  by  the               enterprise  would  not  be in  a  position  to               isolate  the  process of  operation  from  the               hazardous  preparation  of  substance  or  any               other related element that caused the harm the               enterprise  must be held strictly  liable  for               causing such harm as a part of the social cost               of  carrying  on the hazardous  or  inherently               dangerous  activity.  If  the  enterprise   is               permitted  to carry on an hazardous or  inher-               ently  dangerous activity for its profit,  the               law  must  presume  that  such  permission  is               conditional  on the enterprise  absorbing  the               cost  of  any accident arising on  account  of               such hazardous or inherently dangerous activi-               ty  as an appropriate item of  its  overheads.               Such hazardous or inherently dangerous activi-               ty for private profit can be tolerated only on               condition that the enterprise engaged in  such               hazardous  or  inherently  dangerous  activity               indemnifies all those who suffer on account of               the carrying on of such hazardous or inherent-               ly dangerous activity regardless of whether it               is carried on carefully or not. This               709               principle  is also sustainable on  the  ground               that the enterprise alone has the resource  to               discover and guard against hazards or  dangers               and  to  provide  warning  against   potential               hazards. We would therefore hold that where an               enterprise is engaged in a hazardous or inher-               ently  dangerous activity and harm results  to               anyone on account of an accident in the opera-               tion of such hazardous or inherently dangerous               activity resulting, for example, in escape  of               toxic  gas  the  enterprise  is  strictly  and               absolutely liable to compensate all those  who               are affected by the accident and such liabili-               ty  is  not subject to any of  the  exceptions               which operate vis-a-vis the tortious principle               of strict liability under the rule in  Rylands               v. Fletcher." The  law  so laid down made a land-mark departure  from  the conservative  principles with regard to the liability of  an enterprise  carrying  on hazardous or  inherently  dangerous activities.     In  the  instant cases there is no dispute that  UCIL  a subsidiary of UCC was carrying on activity of  manufacturing pesticide  and  in that process it had stored MIC  a  highly toxic and dangerous gas which leaked causing vast damage not only  to  human  life but also to the flora  and  fauna  and ecology in and around Bhopal. In view of this Court’s  deci- sion  in M.C. Mehta’s case there is no scope for  any  doubt regarding the liability of the UCC for the damage caused  to the  human  beings and nature in and  around  Bhopal.  While

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entering  into the settlement the UCC has accepted  its  li- ability and for that reason it has deposited a sum of Rs.750 crores  in this Court. The inadequacy of the amount of  com- pensation  under the settlement was assailed by the  counsel for  the petitioners but it is not necessary for us  to  ex- press  any opinion on that question as review petitions  are pending before another Constitution Bench and more so as  in the  present cases we are concerned only with the  constitu- tional validity of the Act.     The  Bhopal  Gas tragedy has  raised  several  important questions  regarding the functioning of  multi-nationals  in third  world countries.After the Second world  war  colonial rule came to end in several parts of the globe, as a  number of  natives  secured  independence from  foreign  rule.  The political  domination  was over but the newly  born  nations were  beset  with  various problems on account  of  lack  of finances  and development. A number of  multi-nationals  and transnational  corporations  offered their services  to  the under-developed and developing countries to provide finances and technical know-how by 710 setting up their own industries in those countries on  their own  terms that brought problems with regard to the  control over  the  functioning of  the  transnational  corporations. Multi-national companies in many cases exploited the  under- developed nations and in some cases they influenced  politi- cal and economic policies of host countries which  subverted the  sovereignty  of those countries. There  has  been  com- plaints against the multi-nationals for adopting unfair  and corrupt  means to advance their interests in the host  coun- tries.  Since  this  was a worldwide  phenomena  the  United Nations  took up the matter for consideration. The  Economic and  Social  Council  of the United  Nations  established  a Commission on Transnational Corporations to conduct research on  various political, economic and social aspects  relating to  transnational  corporations. On a careful  and  detailed study the Commission submitted its Report in 1985 for evolv- ing  a Code of Conduct for Transnational  Corporations.  The Code was adopted in 1986 to which large number of  countries of the world are signatories. Although it has not been fully finalised as yet, the Code presents a comprehensive  instru- ment  formulating  the  principles of Code  of  Conduct  for transnational corporations carrying on their enterprises in under developed and developing countries. The Code  contains provisions  regarding  ownership  and  control  designed  to strike balance between the competing interests of the Trans- national Corporation and the host countries. It  extensively deals  with the political, economic, financial,  social  and legal questions. The Code provides for disclosure of  infor- mation to the host countries and it also provides guidelines for nationalisation and compensation, obligations to  inter- national law and jurisdiction of courts. The Code lays  down provisions  for  settlement  of disputes  between  the  host States  and an affiliate of a Transnational Corporation.  It suggests  that  such  disputes should be  submitted  to  the national  courts  or authorities of  host  countries  unless amicably  settled between the parties. It provides  for  the choice  of law and means for dispute settlement arising  out of contracts. The Code has also laid down guidelines for the determination  of  settlement  of disputes  arising  out  of accident and disaster and also for liability of Transnation- al Corporations and the jurisdiction of the courts. The Code is binding on the countries which formally accept it. It was stated  before us that India has accepted the Code. If  that be  so,  it  is necessary that the  Government  should  take

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effective  measures to translate the provisions of the  Code into  specific  actions and policies backed  by  appropriate legislation and enforcing machinery to prevent any  accident or disaster and to secure the welfare of the victims of  any industrial disaster. In  the context of our national dimensions of human  rights, right 711 to life, liberty, pollution free air and water is guaranteed by the Constitution under Articles 21, 48A and 5l(g), it  is the duty of the State to take effective steps to protect the guaranteed  constitutional  rights.  These  rights  must  be integrated  and  illumined  by  the  evolving  international dimensions and standards, having regard to our  sovereignty, as  highlighted by Clauses 9 and 13 of U.N. Code of  conduct on  Transnational  Corporations. The evolving  standards  of international obligations need to be respected,  maintaining dignity  and sovereignty of our people, the State must  take effective  steps to safeguard the constitutional  rights  of citizens by enacting laws. The laws so made may provide  for conditions  for granting licence to  Transnational  Corpora- tions,  prescribing norms and standards for  running  indus- tries  on Indian soil ensuring the constitutional rights  of our  people relating to life, liberty, as well as safety  to environment  and  ecology  to enable the people  to  lead  a healthy  and clean life. A Transnational Corporation  should be  made liable and subservient to laws of our  country  and the liability should not be restricted to affiliate  company only  but the parent corporation should also be made  liable for any damage caused to the human being or ecology. The law must require transnational corporations to agree to pay such damages as may be determined. by the statutory agencies  and forum  constituted under it without exposing the victims  to long drawn litigation. Under the existing civil law  damages are  determined  by  the Civil Courts, after  a  long  drawn litigation,  which  destroys the very  purpose  of  awarding damages. In order to meet the situation, to avoid delay  and to  ensure immediate relief to the victims we would  suggest that  the law made by the Parliament should provide      for constitution of tribunals regulated by special procedure for determining  compensation to victims of industrial  disaster or  accident, appeal against which may lie to this Court  on limited ground of questions of law only after depositing the amount  determined  by  the Tribunal. The  law  should  also provide for interim relief to victims during the pendency of proceedings. These steps would minimise the misery and agony of victims of hazardous enterprises.      There  is yet another aspect which needs  consideration by the Government and the Parliament. Industrial development in  our  country and the hazards involved  therein,  pose  a mandatory need to constitute a statutory "Industrial  Disas- ter  Fund", contributions to which may be made by, the  Gov- ernment,  the  industries  whether  they  are  transnational corporations or domestic undertakings public or private. The extent  of contribution may be worked out having  regard  to the  extent of hazardous nature of the enterprise and  other allied  matters. The Fund should be permanent in nature,  so that money is 712 readily  available for providing immediate effective  relief to the victims. This may avoid delay, as has happened in the instant  case in providing effective relief to the  victims. The  Government  and the Parliament  should  therefore  take immediate  steps for enacting laws, having regard  to  these suggestions,  consistent  with the international  norms  and

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guidelines  as contained in the United Nations Code of  Con- duct on Transnational Corporations.     With these observations, I agree with the order proposed by my learned brother, Sabyasachi Mukharji, CJI.     RANGANATHAN, J. Five years ago, this country was  shaken to  its core by a national catastrophe, second in  magnitude and  disastrous  effects only to  the havoc wrought  by  the atomic  explosions in Hiroshima and Nagasaki. Multitudes  of illiterate and poverty-stricken people in and around  Bhopal suffered  damage to life and limb due to the escape of  poi- sonous  Methyl Isocyanate (MIC) gas from one of the  storage tanks  at the factory of the Union Carbide  (India)  Limited (UCIL) in Bhopal, a wholly owned subsidiary of the  multina- tional giant, the Union Carbide Corporation (UCC). A  number of  civil suits claiming damages from the UCC were filed  in the  United  States of America and similar  litigation  also followed in Indian courts. Fearing the possibilities of  the exploitation  of  the  situation by  vested  interests,  the Government  of India enacted, the Bhopal Gas  Leak  Disaster (Processing of Claims) Act, 1985 (’the Act’) to regulate the course  of such litigation. Briefly speaking,  it  empowered the  Union of India to take over the conduct of all  litiga- tion in this regard and conduct it in place of, or in  asso- ciation with, the individual claimants. It also enabled  the Union  to enter into a compromise with the UCC and UCIL  and arrive  at a settlement. The writ petitions before  us  have been  filed challenging the constitutional validity of  this statute on the ground that the divestiture of the claimants’ individual rights to legal remedy against the  multinational for the consequences of carrying on dangerous and  hazardous activities  on  our  soil violates  the  fundamental  rights guaranteed under article 14, 19 and 21 of the Constitution.     In  consequence  of  certain  proceedings  before  Judge Keenan of the U.S. District Courts, the venue of the litiga- tion shifted to India. In the principal suit filed in  India by the Union (Civil Suit No. 1113/86) orders were passed  by the  trial  court  in Bhopal directing the  UCC  to  deposit Rs.370  crores (reduced to Rs.250 crores by the Madhya  Pra- desh  High  Court)  as interim payment to  the  gas  victims pending  disposal  of the suit. There were appeals  to  this Court in which the 713 UCC contested the Court’s jurisdiction to pass an order  for an  interim  payment in a suit for money,  while  the  Union pleaded that a much higher interim payment should have  been granted.  When the matter was being argued in this Court,  a settlement  was  arrived at between the Union  and  the  UCC under which a sum of Rs.750 crores has been received by  the Union in full settlement of all the claims of all victims of the  gas  leak  against the UCC. The Union  also  agreed  to withdraw  certain  prosecutions  that  had  been   initiated against  the officials of the UCC and UCIL in  this  connec- tion. This settlement received the imprimatur of this  Court in its orders dated 14th & 15th February, 1989.     It is unfortunate that, though the writ petitions before us  were pending in this Court at that time,  neither  their contents nor the need for considering first the issue of the validity  of  the  Act before thinking of  a  settlement  in pursuance  of its provisions seem to have  been  effectively brought  to the notice of the Bench which put an end to  all the litigation on this topic in terms of the settlement. The settlement  thus stood approved while the issue of  validity of the Act under which it was effected stood undecided. When this  was brought to the notice of the above Bench,  it  di- rected these writ petitions to be listed before a  different

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Bench ’to avoid any possible feeling that the same Bench may be  coloured  in  its views on the issue by  reason  of  the approval it had given to the fait accompli viz. the  settle- ment. That is now these matters came before us.     The petitioners, claiming to represent a section of  the victims  are, firstly, against any settlement at  all  being arrived  at  with  the UCC. According to them,  it  is  more important  to  ensure  by penal  action  that  multinational corporations  do  not play with the lives of people  in  de- veloping and under developed countries than to be  satisfied with  mere  compensation for injury and  that  the  criminal prosecutions  initiated in this case should have  been  pur- sued.  Secondly,  they are of the view that the  amount  for which the claims have been settled is a pittance, far  below the  amount of damages they would have been entitled to,  on the  principles of strict, absolute and  punitive  liability enunciated  by  this Court in Mehta’s case [1987]  1  S.C.R. 819.  Thirdly, their grievance is that no publicity  at  all was  given,  before this court passed its order,  to  enable individual claimants or groups of them to put forward  their suggestions or objections to the settlement proposed.  Their interests  were  sealed, they say,  without  complying  with elementary principles of natural justice. They contend  that the  provisions of an Act which has made such  a  settlement possible cannot be constitutionally valid. 714     The arguments before us ranged over a very wide  ground, covered  several issues and extended to several  days.  This Bench has been placed in somewhat of a predicament as it has to pronounce on the validity of the provisions of the Act in the  context  of an implementation of its  provisions  in  a particular manner and, though we cannot (and do not) express any  views  regarding the merits of the settlement,  we  are asked to consider whether such settlement can be  consistent with  a correct and proper interpretation of the Act  tested on the touchstone of the fundamental rights guaranteed under the  Constitution. Mukharji, C.J., has outlined the  issues, dealt  elaborately  with the contentions  urged,  and  given expression  to his conclusions in a learned,  elaborate  and detailed judgment which we have had the advantage of  perus- ing  in draft. Our learned brother K.N. Singh, J., has  also highlighted  certain  aspects in his separate  judgment.  We are,  in large measure, in agreement with them,  but  should like to say a few words on some of the issues in this  case, particularly those in regard to which our approach has  been somewhat different:     1.  The  issue regarding the validity of the  Act  turns principally  on the construction of sections 3 and 4 of  the Act. We are inclined to hold that the fact that a settlement has  been  effected, or the circumstances in  which  or  the amount  for which the claims of the victims have  been  set- tled, do not have a bearing on this question of  interpreta- tion and have to be left out of account altogether except as providing  a  contextual background in  which  the  question arises.  Turning therefore to the statute and  its  implica- tions, the position is this. Every person who suffered as  a consequence  of the gas leak had a right to claim  compensa- tion from the persons who, according to him, were liable  in law for the injury caused to him and also a fight to  insti- tute a suit or proceeding before any court or authority with a view to enforce his right to claim damages. In the  normal course  of events, such a claimant who institute a  suit  or proceeding  would have been at complete liberty to  withdraw the said suit or proceeding or enter into any compromise  he may choose in that regard. Section 3 undoubtedly takes  away

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this  fight  of the claimant altogether: (a) except  to  the limited  extent specified in the proviso to S. 3(3) and  (b) subject to the provisions of S. 4, for this section  clearly states  that  it is the Central Government and  the  Central Government alone which has the right to represent and act in place of the claimants, whether within or outside India, for all purposes in 715 connection with the enforcement of his claims. We may  first consider how far the main provision in S. 3 (leaving out  of account the proviso as well as section 4) is compatible with the Constitution     The  first question that arises is whether the  legisla- ture  is justified in depriving the claimants of  the  right and privilege of enforcing their claims and prosecuting them in  such manner as they deem fit and in compulsorily  inter- posing  or  substituting the Government in their  place.  We think that, to this question, there can be only one  answer. As  pointed  out by our learned brother, the  situation  was such that the victims of the tragedy needed to be  protected against  themselves as their adversery was a  mighty  multi- national  corporation  and  proceedings  to  a  considerable extent  had been initiated in a foreign country,  where  the conduct of the cases was entrusted to foreign lawyers  under a  system of litigation which is unfamiliar to us  here.  In the stark reality of the situation, it cannot even be  plau- sibly contended that the large number of victims of the  gas leak  disaster should have been left to fend for itself  and merely provided with some legal aid of one type or  another. It  is  necessary  to remember that, having  regard  to  the identity  of the principal ground of claim of all  the  vic- tims, even if a single victim was not diligent in conducting his  suit  or entered into a compromise or  submitted  to  a decree  judging the issues purely from his individual  point of  view, such a decision or decree could  adversely  affect the  interests of the innumerable other victims as well.  In fact, it appears that a settlement between one set of claim- ants  and the adversary corporation was almost imminent  and would perhaps have been through out for the timely interven- tion of the Government of India. The battle for the enforce- ment of one’s rights was bound to be not only prolonged  but also  very  arduous and expensive and the  decision  of  the legislature  that the fight against the adversary should  be consolidated  and its conduct handed over to the  Government of  India--it  may perhaps have been better if it  had  been handed over to an autonomous body independent of the Govern- ment but, as pointed out by our learned brother, the  course adopted  was  also not objectionable--was perhaps  the  only decision  that could have been taken in  the  circumstances. This  is indeed a unique situation in which the victims,  in order to realise to the best advantage their rights  against UCC,  had to be helped out by transposing that right  to  be enforced by the Government.     We did not indeed understand any learned counsel  before us  to  say  that the legislature erred  in  entrusting  the Government of India 716 with  the  responsibility of fighting for the  victims.  The only  grievance is that in the process their right  to  take legal proceedings should not have been completely taken away and  that they should also have had the liberty of  partici- pating in the proceedings right through. In fact, though the Act contemplates the Central Government to completely act in place  of  the victims, the Government of India has  not  in fact  displaced  them  altogether. In  all  the  proceedings

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pending  in  this  country, as well as  those  before  Judge Keenan,  the Government of India has conducted the  proceed- ings  but  the  other victims or such of them  as  chose  to associate  themselves in these proceedings by becoming  par- ties were not shut out from taking part in the  proceedings. In fact, as the learned Attorney General pointed out, one of the  groups  of litigants did give great assistance  to  the trial  judge at Bhopal. But even if the provisions of  S.  3 had been scrupulously observed and the names of all parties, other than the Central Government, had been got deleted from the array of parties in the suits and proceedings pending in this  country,  we do not think that the result  would  have been  fatal to the interests of the litigants. On  the  con- trary, it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising  their rights against the Union Carbide  Corpora- tion. Such representation can well be justified by resort to a principle analogous to, if not precisely the same as  that of,  "parens patriae". A victim of the tragedy is  compelled to part with a valuable right of his in order that it  might be  more  efficiently and satisfactory  ’exploited  for  his benefit  than  he  himself is capable of. It  is  of  course possible  that there may be an affluent claimant  or  lawyer engaged  by him, who may be capable of fighting the  litiga- tion better. It is possible that the Government of India  as a  litigant may or may not be able to pursue the  litigation with as much determination or capability as such a litigant. But  in  a case of the present type one should not  be  con- founded  by  such  a possibility. There  are  more  indigent litigants  than  affluent ones. There are  more  illiterates than enlightened ones. There are very few of the  claimants, capable  of finding the financial wherewithal  required  for fighting  the  litigation. Very few of them are  capable  of prosecuting  such a litigation in this country not to  speak of the necessity to run to a foreign country. The  financial position of UCIL was negligible compared to the magnitude of the claim that could arise and, though eventually the battle had  to  be pitched on our own soil, an initial as  well  as final recourse to legal proceedings in the United States was very  much on the cards, indeed inevitable. In  this  situa- tion,  the legislature was perfectly justified in coming  to the aid of the victims with this piece of legislation and in asking the Central Government to shoulder the responsibility by substituting itself in place of the victims 717 for all purposes connected with the claims. Even if the  Act had  provided for a total substitution of the Government  of India  in place of the victims and had completely  precluded them  from exercising their rights in any manner,  it  could perhaps have still been contended that such deprivation  was necessary in larger public interest.     But the Act is not so draconian in its content.  Actual- ly,  as we have said a little earlier, the grievance of  the petitioners is not so much that the Government was entrusted with  the functions. of a dominus litis in this  litigation. Their contention is that the whole object and purpose of the litigation is to promote the interests of the claimants,  to enable  them  to  fight the UCC with  greater  strength  and determination,  to help them overcome limitations  of  time, money and legal assistance and to realise the best compensa- tion  possible consistent not only with the damage  suffered by  them but also consistent with national honour and  pres- tige.  It is suggested that the power conferred on the  Gov- ernment  should be construed as one hedged in by this  domi- nant  object. A divestiture of the claimant’s right in  this

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situation  would  be  reasonable, it is said,  only  if  the claimant’s rights are supplemented by the Government and not supplanted by it.     Assuming the correctness of the argument, the provisions of the proviso to S. 3(3) and of section 4 furnish an answer to  this  contention. While the provision contained  in  the main  part  of  section 3 may be sufficient  to  enable  the Government of India to claim to represent the claimants  and initiate  and conduct suits or proceeding on  their  behalf, the  locus standi of the Government of India in suits  filed by  other claimants before the commencement of the Act  out- side India would naturally depend upon the discretion of the court enquiring into the matter. That is why the proviso  to section  3  makes the right of the Government  of  India  to represent  and act in place of the victims in such  proceed- ings  subject  to the permission of the court  or  authority where  the proceedings are pending. It is of course open  to such court to permit the Central Government even to displace the  claimants if it is satisfied that the authority of  the Act is sufficient to enable it to do so. In the present case it is common ground that the proceedings before Judge Keenan were  being prosecuted by the Central Government along  with various  individual  claimants. Not only  did  Judge  Keenan permit  the association of the Government of India in  these proceedings but the Government of India did have a  substan- tial voice in the course of those proceedings as well. Again section 4 mandates that, notwithstanding anything 718 contained  in section 3, the Central Government,  in  repre- senting and acting in place of any person in relation to any claim,  shall  have  due regard to any  matters  which  such person may require to be urged with respect to his claim. It also stipulates that if such person so desires, the  Central Government  shall permit, at the expense of such  person,  a legal  practitioner  of his choice to be associated  in  the conduct  of  any suit or other proceeding  relating  to  his claim.  In other words, though, perhaps, strictly  speaking, under  section 3 the Central Government can totally  exclude the  victim  himself or his legal practitioner  from  taking part  in  the proceedings (except in pending  suits  outside India),  section 4 keeps the substance of the rights of  the victims in tact. It enables, and indeed obliges, the Govern- ment to receive assistance from individual claimants to  the extent  they are able to offer the same. If any of the  vic- tims or their legal advisers have any specific aspect  which they  would like to urge, the Central Government shall  take it into account. Again if any individual claimant at his own expense retains a legal practitioner of his own choice, such legal  practitioner  will  have to be  associated  with  the Government in the conduct of any suit or proceeding relating to  his  claim. Sections 3 and 4 thus combine  together  the interests of the weak, illiterate, helpless and poor victims as well as the interests of those who could have managed for themselves,  even  without the help of this  enactment.  The combination  thus envisaged enables the Government to  fight the battle with the foreign adversary with the full aid  and assistance of such of the victims or their legal advisers as are  in  a  position to offer any  such  assistance.  Though section  3  denies  the claimants the benefit  of  being  eo nominee  parties  in such suits or  proceedings,  section  4 preserves to them substantially all that they can achieve by proceeding  on their own. In other words, while  seeming  to deprive the claimants of their right to take legal action on their  own, it has preserved those rights, to  be  exercised indirectly. A conjoint reading of sections 3 and 4 would, in

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our  opinion,  therefore show that there has  been  no  real total  deprivation of the right of the claimants to  enforce their  claim for damages in appropriate  proceedings  before any  appropriate forum. There is only a restriction of  this right which, in the circumstances, is totally reasonable and justified. The validity of the Act is, therefore, not liable to be challenged on this ground.     The next angle from which the validity of the  provision is attacked is that the provision enabling the Government to enter into a compromise is bad. The argument runs thus:  The object  of the legislation can be furthered only if it  per- mits the Government to prosecute the litigation more  effec- tively and not if it enables the Government to 719 withdraw  it or enter into a compromise. According to  them, the Act fails the impecunious victims in this vital  aspect. The  authority  conferred by the Act on  the  Government  to enter  into a settlement or compromise, it is said,  amounts to  an absolute negation of the rights of the  claimants  to compensation and is capable of being so exercised to  render such  rights totally valueless, as in fact, it is said,  has happened.     It  appears  to us that this contention  proceeds  on  a misapprehension.  It is common knowledge that any  authority given to conduct a litigation cannot be effective unless  it is  accompanied  by an authority to withdraw or  settle  the same  if  the circumstances call for it. The vagaries  of  a litigation  of  this magnitude and intricacy  could  not  be fully anticipated. There were possibilities that the litiga- tion  may have to be fought out to the bitter finish.  There were  possibilities  that the UCC might be willing  to  ade- quately  compensate the victims either on their own’  or  at the  insistence of the Government concerned. There was  also the  possibility, which had already been in evidence  before Judge Keenan, that the proceedings might ultimately have  to end in a negotiated settlement. One notices that in most  of the mass disaster cases reported, proceedings finally end in a compromise if only to avoid an indefinite prolongation  of the  agonies  caused by such  litigation.  The  legislation, therefore,  cannot be considered to be  unreasonable  merely because  in  addition to the right to institute  a  suit  or other  proceedings it also empowers the Government to  with- draw the proceedings or enter into a compromise.     Some  misgivings  were expressed, in the course  of  the hearing, of the legislative wisdom (and, hence the validity) of  entrusting  the carriage of these  proceedings  and,  in particular,  the power of settling it out of Court,  to  the Union of India. It was contended that the union is itself  a joint tort-feasor (sued as such by some of the victims) with an  interest  (adverse to the victims) in keeping  down  the amount  of  compensation  payable to the minimum  so  as  to reduce its own liability as a joint tort-feasor. It seems to us  that this contention in misconceived. As pointed out  by Mukharji,  C.J.,  the Union of India itself is  one  of  the entities  affected by the gas leak and has a claim for  com- pensation  from the UCC quite independent of the other  vic- tims. From this point of view, it is in the same position as the  other victims and, in the litigation with the  UCC,  it has every interest in securing the maximum amount of compen- sation  possible  for itself and the other victims.  It  is, therefore,  the best agency in the circumstances that  could be  looked up to for fighting the UCC on its own as well  as on behalf of the victims. The suggestion that the Union is a joint tort-lessor has been 720

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stoutly resisted by the learned Attorney General. But,  even assuming that the Union has some liability in the matter, we fail  to see-how it can derive any benefit or  advantage  by entering  into a low settlement with the UCC. as is  pointed out  later in this judgment and by Mukharji, C.J.,  the  Act and  Scheme  thereunder have provided for an  objective  and quasi-judicial  determination of the amount of damages  pay- able  to the victims of the tragedy. There is no  basis  for the  fear expressed during the hearing that the officers  of the Government may not be objective and may try to cut  down the amounts of compensation, so as not to exceed the  amount received from the UCC. It is common ground and, indeed,  the learned  Attorney General fairly conceded, that the  settle- ment with the UCC only puts an end to the claims against the UCC  and  UCIL and does not in any way affect  the  victims’ rights,  if any, to proceed against the Union, the State  of Madhya Pradesh or the ministers and officers thereof, if  so advised.  If  the Union and these officers are  joint  tort- lessors,  as  alleged, the Union will not stand to  gain  by allowing the claims against the UCC to be settled for a  low figure.  On the contrary it will be interested  in  settling the  claims against the UCC at as high a figure as  possible so  that its own liability as a joint tort-feasor  (if  made out)  can  be correspondingly reduced.  We  are,  therefore, unable  to  see  any vitiating element  in  the  legislation insofar  as it has entrusted the responsibility not only  of carrying  on  but  also of entering into  a  settlement,  if thought fit.     Nor  is  there  basis for the contention  that  the  Act enables  a  settlement  to be arrived at  without  a  proper opportunity  to the claimants to express their views on  any proposals  for settlement that may be mooted. The  right  of the claimant under section 4 to put forward his  suggestions or  to be represented by a legal practitioner to  put  forth his own views in the conduct of the suit or other proceeding certainly  extends to everything connected with the suit  or other proceeding. If, in the course of the proceedings there should arise any question of compromise or settlement, it is open  to  the claimants to oppose the same and to  urge  the Central  Government  to have regard to  specific  aspects  m arriving at a settlement. Equally it is open to any claimant to employ a legal practitioner to ventilate his opinions  in regard  to such proposals for settlement. The provisions  of the Act, read by themselves, therefore, guarantee a complete and full protection to the rights of the claimants in  every respect. Save only that they cannot file a suit  themselves, their right to acquire redress has not really been  abridged by  the provisions of the Act. Sections 3 and 4 of  the  Act properly  read,  in our opinion,  completely  vindicate  the objects and reasons which compelled Parliament to enact this piece of legislation. 721 Far  from abridging the rights of the claimants in any  man- ner, these provisions are so worded as to enable the Govern- ment to prosecute the litigation with the maximum amount  of resources, efficiency and competence at its command as  well as with all the assistance and help that can be extended  to it  by such of those litigants and claimants as are  capable of playing more than a mere passive rule in the litigations     But  then,  it  is contended, the victims  have  had  no opportunity  of considering the settlement proposals  mooted in  this case before they were approved by the  Court.  This aspect is dealt with later.     2. One of the contentions before us was that the UCC and UCIL are accountable to the public for the damages caused by

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their  industrial activities not only on a basis  of  strict liability  but  also  on the basis that the  damages  to  be awarded  against them should include an element of  punitive liability and that this has been lost sight of while approv- ing  of the proposed settlement. Reference was made in  this context to M.C. Mehta’s case (supra). Whether the settlement should have taken into account this factor is, in the  first place, a moot question. Mukharji, C.J. has pointed  out--and we are inclined to agree-that this is an "uncertain province of  the law" and it is premature to say whether  this  yard- stick has been, or will be, accepted in this country, not to speak of its international acceptance which may be necessary should occasion arise for executing a decree based on such a yardstick in another country. Secondly, whether the  settle- ment  took this into account and, if not, whether it is  bad for  not having kept this basis in view are  questions  that touch  the  merits of the settlement with which we  are  not concerned.  So we feel we should express no opinion here  on this  issue. It is too far-fetched, it seems to us, to  con- tend that the provisions of the Act permitting the Union  of India  to enter into a compromise should be struck  down  as unconstitutional  because  they have been construed  by  the Union  of India as enabling it to arrive at such  a  settle- ment.     The argument is that the Act confers a discretionary and enabling  power in the Union to arrive at a  settlement  but lays  down no guidelines or indications as to the  stage  at which,  or  circumstances  in which,  a  settlement  can  be reached  or the type of settlement that can be  arrived  at; the  power  conferred should, therefore, be struck  down  as unguided,  arbitrary  and uncanalised. It  is  difficult  to accept  this contention. The power to conduct a  litigation, particularly in a case of this type, must, to be  effective, necessarily carry with it a power to settle it at any stage. It is impossible to provide statutorily any detailed 722 catalogue of the situations that would justify a  settlement or  the basis or terms on which a settlement can be  arrived at. The Act. moreover, cannot be said to have conferred  any unguided or arbitrary discretion to the Union in  conducting proceedings under the Act. Sufficient guidelines emerge from the Statement of Objects and Reasons of the Act which  makes it  clear that the aim and purpose of the Act is  to  secure speedy and effective redress to the victims of the gas  leak and  that all steps taken in pursuance of the Act should  be for  the implementation of the object. Whether  this  object has  been  achieved  by a particular settlement  will  be  a different  question but it is altogether impossible  to  say that  the  Act  itself is bad for the  reason  alleged.  We, therefore, think it necessary to clarify, for our part, that we  are not called upon to express any view on the  observa- tions in Mehta’s case and should not be understood as having done so.     3. Shri Shanti Bhushan, who supported the Union’s  stand as  to  the validity of the Act, however, made  his  support conditional on reading into its provisions an obligation  on the part of the Union to make interim payments towards their maintenance and other needs consequent on the tragedy, until the  suits filed on their behalf ultimately  yield  tangible results. That a modern welfare State is under an  obligation to  give  succour and all kinds of assistance to  people  in distress  cannot at all be gainsaid. In point of fact  also, as pointed out by the learned Chief Justice, the  provisions of  the Act and scheme thereunder envisage interim  payments to  the victims; so, there is nothing objectionable in  this

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Act on this aspect. However, our learned brother has accept- ed the argument addressed by Shri Shanti Bhushan which  goes one step further viz. that the Act would be unconstitutional unless this is read as "a major inarticulate promise" under- lying  the  Act. We doubt whether this  extension  would  be justified for the hypothesis underlying the argument is,  in the  words of Sri Shanti Bhushan, that had the victims  been left to fend for themselves, they would have had an "immedi- ate  and  normal right of obtaining  compensation  from  the Union  Carbide"  and, as the legislation  has  vested  their rights  in this regard in the Union, the Act should be  con- strued  as creating an obligation on the Central  Government to  provide  interim relief. Though  we  would  emphatically reiterate  that  grant of interim relief to  ameliorate  the plight  of its subjects in such a situation is a  matter  of imperative  obligation  on  the part of the  State  and  not merely  ’a  matter of fundamental human  decency’  as  Judge Keenan put it, we think that such obligation flows from  its character as a welfare State and would exist irrespective of what  the  statute may or may not provide. In our  view  the validity of the Act does not depend upon its 723 explicitly or implicitly providing for interim payments.  We say  this for two reasons. In the first place, it  was,  and perhaps still is, a moot question whether a plaintiff  suing for damages in tort would be entitled to advance or  interim payments in anticipation of a decree. That was, indeed,  the main  point  on which the interim orders in this  case  were challenged  before  this Court and, in the  context  of  the events  that took place, remains undecided. It may  be  men- tioned  here that no decided case was brought to our  notice in which interim payment was ordered pending disposal of  an action  in  tort in this country. May be there is  a  strong case  for ordering interim payments in such a case  but,  in the absence of full and detailed consideration, it cannot be assumed  that,  left to themselves, the victims  would  have been  entitled  to a "normal and immediate"  right  to  such payment. Secondly, even assuming such right exists, all that can be said is that the State, which put itself in the place of the victims, should have raised in the suit a demand  for such interim compensation--which it did--and that it  should distribute among the victims such interim compensation as it may  receive from the defendants. To say that the Act  would be bad if it does not provide for payment of such  compensa- tion  by the Government irrespective of what may  happen  in the suit is to impose on the State an obligation higher than what  flows from its being subrogated to the rights  of  the victims. As we agree that the Act and the scheme  thereunder envisage interim relief to the victims, the point is perhaps only academic. But we felt that we should mention this as we are  not  in  full agreement with Mukharji,  C.J.,  on  this aspect on the case.     4.  The next important aspect on which much debate  took place  before us was regarding the validity of the  Act  qua the  procedure envisaged by it for a compromise  or  settle- ment.  It  was argued that if the suit is  considered  as  a representative  suit  no compromise or settlement  would  be possible  without notice in some appropriate manner  to  all the victims of the proposed settlement and an opportunity to them to ventilate their views thereon (vide Order XXIII,  r. 3B, C.P.C.). The argument runs thus: S. 4 of the Act  either incorporates  the  safeguards of these provisions  in  which event  any settlement effected without compliance  with  the spirit,  if  not the letter, of these  provisions  would  be ultra  vires  the Act. Or it does not, in which  event,  the

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provisions of S. 4 would be bad as making possible an  arbi- trary deprivation of the victims’ rights being  inconsistent with, and derogatory of, the basic rules established by  the ordinary  Law of the land viz. the Code of Civil  Procedure. We are inclined to take the view that it is not possible  to bring the suits brought under the Act within the  categories of  representative  action envisaged in the  Code  of  Civil procedure. The Act 724 deals  with a class of action which is sui generis  and  for which a special formula has been found and encapsuled in  S. 4.  The Act divests the individual claimants of their  right to  sue and vests it in the Union. In relation to  suits  in India,  the Union is the sole plaintiff, none of the  others are  envisaged as plaintiffs or respondents. The victims  of the tragedy were so numerous that they were never defined at the  stage of filing the plaint nor do they need to  be  de- fined  at the stage of a settlement. The litigation is  car- ried  on by the State in its capacity, not exactly the  same as but somewhat analogous to that of a "parens patriae".  In the  case  of  a litigation by karta of  a  Hindu  Undivided Family or by a guardian on behalf of a ward, who is  non-sui juris, for example, the junior members of the family or  the wards,  are not to be consulted before entering into a  set- tlement.  In such cases, the Court acts as guardian of  such persons to scrutinise the settlement and satisfy itself that it  is  in the best interest of all concerned. It  is  later discovered  that there has been any fraud or  collusion,  it may be open to the junior members of the family or the wards to call the karta or guardian to account but, barring such a contingency, the settlement would be effective and  binding. In  the same way, the Union as "parens patriae"  would  have been at liberty to enter into such settlement as it  consid- ered  best on its own and seek the Court’s  approval  there- fore.     However,  realising that the litigation is truly  fought on  behalf  and for the benefit of innumerable,  though  not fully identified victims the Act has considered it necessary to  assign a definite role to the individual  claimants  and this is spelt out in S. 4. This section directs:               (i)  that the union shall have due  regard  to               any  matters which such person may require  to               be urged with respect to his claim; and               (ii)  that the Union shaH, if such  person  so               desires, permit at the expense of such person,               a  legal  practitioner  of his  choice  to  be               associated in the conduct of any suit or other               proceeding relating to his claim. This provision adequately safeguards the interests of  indi- vidual victims. It enables each one of them to bring to  the notice  of the Union any special features  or  circumstances which he would like to urge in respect of any matter and  if any  such  features are brought to its notice the  Union  is obliged  to  take  it into account.  Again,  the  individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the  proceed- ings. If the suits in this 725 case  had  proceeded, in the normal course,  either  to  the stage of a decree or even to one of settlement the claimants could  have kept themselves abreast of the developments  and the statutory provisions would have been more than  adequate to  ensure  that the points of view of all the  victims  are presented  to  the court. Even a  settlement  or  compromise could  not  have  been arrived at without  the  court  being

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apprised  of  the views or any of them who chose to  do  so. Advisedly, the statute has provided that though the Union of India  will be the dominus litis in the suit, the  interests of all the victims and their claims should be safeguarded by giving  them a voice in the proceedings to the extent  indi- cated above. This provision of the statute is an  adaptation of  the principle of O.I.r. 8 and of Or. XXIII r. 3  of  the Code  of  Civil Procedure in its application  to  the  suits governed  by  it  and, though the  extent  of  participation allowed to the victims is somewhat differently enunciated in the legislation, substantially speaking, it does incorporate the principles of natural justice to the extent possible  in the circumstances. The statute cannot, therefore, be  fault- ed, as has been pointed out earlier also, on the ground that it denies the victims an opportunity to present their  views or  places them at any disadvantage in the matter of  having an effective voice in the matter of settling the suit by way of compromise.     The  difficulty in this case has arisen, as we  see  it, because of a fortuitous circumstance viz. that the talks  of compromise  were  mooted and approved in the course  of  the hearing  of  an appeal from an order for  interim  payments. Though  compromise talks had been in the air right from  the beginning  of  this episode, it is said that  there  was  an element  of surprise when they were put forward in Court  in February,  1989.  This  is not quite correct.  It  has  been pointed  out that even when the issue regarding the  interim relief  was debated in the courts below, attempts were  made to settle the whole litigation. The claimants were aware  of this  and they could--perhaps should--have anticipated  that similar  attempts would be made in this Court  also.  Though certain parties had been associated with the conduct of  the proceedings  in  the trial court--and the  trial  judge  did handsomely  acknowledge their contribution to  the  proceed- ings--they were apparently not alert enough to keep a watch- ing brief in the Supreme Court, may be under the  impression that the appeal here was concerned only with the quantum  of interim relief. One set of parties was present in the  Court but,  apart from praying that he should be forthwith paid  a share in the amount that would be deposited in Court by  the UCC  in pursuance of the settlement, no attempt  appears  to have  been made to put forward a contention that the  amount of settlement was inade- 726 quate or had not taken into account certain relevant consid- erations. The Union also appears to have been acting on  the view  that  it could proceed ahead on its own  both  in  its capacity  as  "parens  patraie" as well as in  view  of  the powers  of attorney held by it from a very large  number  of the  victims  though the genuineness of this  claim  is  now contested before us. There was a day’s interval between  the enunciation of the terms of the settlement and their approv- al  by  the Court. Perhaps the Court could have  given  some more publicity to the proposed settlement in the newspapers, radio  and television and also permitted some time to  lapse before  approving it, if only to see whether there were  any other  points of view likely to emerge. Basically  speaking, however, the 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 developments  leading to  the  finalisation  of the  settlement  when  the  appeal

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against the interim order was being heard in this Court.     One of the points of view on which considerable emphasis was  laid in the course of the arguments was that in a  case of  this  type the offending parties should  be  dealt  with strictly  under  the criminal law of the Land and  that  the inclusion,  as part of the settlement, of a  term  requiring the  withdrawal  of the criminal prosecutions  launched  was totally unwarranted and vitiates the settlement. It has been pointed out by Mukharji, C.J. ,--and we agree--that the  Act talks  only of the civil liability of, and  the  proceedings against, the UCC or UCIL or others for damages caused by the gas leak. It has nothing to say about the criminal liability of  any  of the parties involved. Clearly,  therefore,  this part of the settlement comprises a term which is outside the purview  of the Act. The validity of the Act cannot,  there- fore, be impugned on the ground that it permits--and  should not  have permitted-the withdrawal of  criminal  proceedings against the delinquents. Whether in arriving at the  settle- ment,  this aspect could also have been taken  into  account and  this term included in it, is a question concerning  the validity  of the settlement. This is a question outside  the terms  of  reference  to us and we,  therefore,  express  no opinion in regard thereto.     5.  A  question was mooted before us as to  whether  the actual settlement--if not the statutory provision--is liable to be set aside on the grounds that the principles of  natu- ral justice have been flagrantly 727 violated.  The merits of the settlement as such are  not  in issue before us and nothing we say can or should fetter  the hands  of  the  Bench hearing a review  petition  which  has already  been filed, from passing such orders thereon as  it considers appropriate.     Our learned brother, however, has, while observing  that the  question referred to us is limited to the  validity  of the Act alone and not the settlement, incidentally discussed this aspect of the case too. He has pointed out that justice has  in fact been done and that all facts and aspects  rele- vant  for a settlement have been considered. He has  pointed out that the grievance of the petitioners that the order  of this  Court  did not give any basis for the  settlement  has since been sought to be met by the order passed on 4th  May, 1989 giving detailed reasons, This shows that the Court  had applied its mind fully to the terms of the settlement in the light  of the data as well as all the  circumstances  placed before  it and had been satisfied that the  settlement  pro- posed was a fair and reasonable one that could be  approved. In  actions of this type, the Court’s approval is  the  true safety  valve to prevent unfair settlements and the fact  is that the highest Court of the land has given thought to  the matter and seen it fit to place its seal of approval to  the settlement.  He has also pointed out that a  post-decisional hearing in a matter like this will not be of much avail.  He has  further pointed out that a review petition has  already been filed in the case and is listed for hearing. The  Court has already given an assurance in its order of May 4,  1989, that  it will only be too glad to consider any aspects  that may  have  been overlooked in considering the terms  of  the settlement. Can it be said, in the circumstances, that there has been a failure of justice which compels us to set  aside the  settlement as totally violative of fundamental  rights? Mukharji,  C.J.,  has pointed out that the  answer  to  this question should be in the negative. It was urged that  there is a feeling that the maxim: "Justice must not only be  done but must also appear to be done" has not been fully complied

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with and that perhaps, if greater publicity had attended the hearing, many other facts and aspects could have been  high- lighted resulting in a higher settlement or no settlement at all. That feeling can be fully ventilated and that deficien- cy  can be adequately repaired, it has been pointed  out  by Mukharji, C.J., in the hearing on the review petition  pend- ing before this Court. Though we are prima facie inclined to agree  with him that there are good reasons why the  settle- ment should not be set aside on the ground that the  princi- ples of natural justice have been violated, quite apart from the practical complications that may arise as the result  of such an order, we would not express any final opinion on the validity  of  the settlement but would leave it open  to  be agitated, to the 728 extent  permissible in law, in the review  petition  pending before this Court.     There  is one more aspect which we may perhaps  usefully refer  to in this context. The scheme of the Act is that  on the  one  hand the Union of India  pursues  the  litigiation against  the UCC and the UCIL; on the other all the  victims of the tragedy are expected to file their claims before  the prescribed authority and have their claims for  compensation determined  by  such  authority.  Certain  infirmities  were pointed  out on behalf of the petitioners in  the  statutory provisions  enacted in this regard. Our learned brother  has dealt with these aspects and given appropriate directions to ensure that the claims will be gone into by a quasi judicial authority  (unfettered  by executive  prescriptions  of  the amounts  of compensation by categorising the nature  of  in- juries) with an appeal to an officer who has judicial quali- fications. In this manner the scheme under the Act  provides for  a proper determination of the compensation  payable  to the  various claimants. Claims have already been  filed  and these are being scrutinised and processed. A correct picture as  to  whether  the amount of compensation  for  which  the claims  have  ben settled is meagre, adequate  or  excessive will emerge only at that stage when all the claims have been processed  and their aggregate is determined. In these  cir- cumstances, we feel that no useful purpose will be served by a post-decisional hearing on the quantum of compensation  to be considered adequate for settlement.     For these reasons, it would seem more correct and proper not  to  disturb the orders of 14-15 February, 1989  on  the ground  that  the  rules of natural justice  have  not  been complied  with, particularly in view of the pendency of  the review petition.     6. Before we conclude, we would like to add a few  words on the state of the law of torts in this country. Before  we gained  independence,  on account of our  close  association with  Great  Britain,  we were governed by  the  common  law principles.  In the field of torts, under the common law  of England, no action could be laid by the dependants or  heirs of  a person whose death was brought about by  the  tortious act  of  another on the maxim actio personalis  moritur  cum persona,  although a person injured by a similar  act  could claim  damages  for the wrong done to him. In  England  this situation was remedied by the passing of the Fatal Accidents Act,  1846,  popularly  known as Lord  Campell’s  Act.  Soon thereafter  the Indian Legislature enacted the  Fatal  acci- dents  Act, 1855. This Act is fashioned on the lines of  the English Act 729 of  1846. Even though the English Act has undergone  a  sub- stantial  change,  our law has remained static and  seems  a

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trifle  archaic. The magnitude of the gas leak  disaster  in which  hundreds lost their lives and thousands were  maimed, not  to speak of the damage to livestock, flora  and  fauna, business  and  property, is an eye opener. The  nation  must learn  a  lesson from this traumatic experience  and  evolve safeguards  atleast for the future. We are of the view  that the  time is ripe to take a fresh look at the outdated  cen- tury  old legislation which is out of tune with modern  con- cepts.     While it may be a matter for scientists and  technicians to  find solutions to avoid such large scale disasters,  the law  must  provide  an effective and speedy  remedy  to  the victims  of such torts. The Fatal Accidents Act, on  account of its limited and restrictive application, is hardly suited to meet such a challenge. We are, therefore, of the  opinion that the old antiquated Act should be drastically amended or fresh  legislation  should be enacted  which  should,  inter alia,  contain appropriate provisions in regard to the  fol- lowing matters:               (i)  The payment of a fixed minimum  compensa-               tion on a "no-fault liability" basis (as under               the Motor Vehicles Act), pending final adjudi-               cation of the claims by a prescribed forum;               (ii)  The  creation of a  special  forum  with               specific  power  to grant  interim  relief  in               appropriate cases;               (iii)  The  evolution  of a  procedure  to  be               followed by such forum which will be conducive               to the expeditious determination of claims and               avoid  the high degree of formalism  that  at-               taches to proceedings in regular courts; and               (iv)  A  provision  requiring  industries  and               concerns  engaged in hazardous  activities  to               take  out compulsory insurance  against  third               party risks.     In  addition to what we have said above, we should  like to say that the suggestion made by our learned brother, K.N. Singh  J., for the creation of an Industrial  Disaster  Fund (by whatever name called) deserves serious consideration. We would  also endorse his suggestion that the Central  Govern- ment  will  be  well advised if, in future,  it  insists  on certain safeguards before permitting a transnational company to do business in this country. The necessity of such  safe- guards,  atleast in the following two directions,  is  high- lighted in the present case: 730               (a)  Shri Garg has alleged that the  processes               in the Bhopal Gas Plant were so much  shrouded               in secrecy that neither the composition of the               deadly  gas that escaped nor the proper  anti-               dote  therefore were known to anyone  in  this               country  with the result that the steps  taken               to  combat its effects were not  only  delayed               but  also totally inadequate and  ineffective.               It  is necessary that this type  of  situation               should  be  avoided.  The  Government   should               therefore  insist, when granting licence to  a               transnational company to establish its  indus-               try  here,  on a right to be informed  of  the               nature  of the processes involved so as to  be               able to take prompt action in the event of  an               accident.               (b) We have seen how the victims in this  case               have been considerably handicapped on  account               of the fact that the immediate tort-feasor was

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             the  subsidiary of a multi-national  with  its               Indian  assets totally inadequate  to  satisfy               the claims arising out of the disaster. It is,               therefore,  necessary  to  evolve,  either  by               international   consensus  or  by   unilateral               legislation, steps to overcome these handicaps               and  to ensure (i) that  foreign  corporations               seeking  to establish an industry here,  agree               to submit to the jurisdiction of the Courts in               India in respect of actions for tortious  acts               in  this country; (ii) that the  liability  of               such  a corporation is not limited to such  of               its  assets (or the assets of its  affiliates)               as may be found in this country, but that  the               victims are able to reach out to the assets of               such  concerns  anywhere in the  world;  (iii)               that  any decree obtained in Indian Courts  in               compliance with due process of law is  capable               of being executed against the foreign corpora-               tion, its affiliates and their assets  without               further  procedural  hurdles, in  those  other               countries.     Our  brother, K.N. Singh, J., has in this context  dealt at  some length with the United Nations Code of Conduct  for multi-national Corporations which awaits approval of various countries.  We hope that calamities like the one which  this country has suffered will serve as catalysts to expedite the acceptance  of an international code on such matters in  the near future.     With  these observations, we agree with the  order  pro- posed by the learned Chief Justice. G.N.                                         Petitions  dis- posed of. 731