http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12  

PETITIONER: UNION CARBIDE CORPORATION

       Vs.

RESPONDENT: UNION OF INDIA ETC.

DATE OF JUDGMENT04/05/1989

BENCH: PATHAK, R.S. (CJ) BENCH: PATHAK, R.S. (CJ) VENKATARAMIAH, E.S. (J) MISRA RANGNATH VENKATACHALLIAH, M.N. (J) OJHA, N.D. (J)

CITATION:  1990 AIR  273            1989 SCC  (2) 540  1989 SCALE  (1)932

ACT:     Bhopal Gas Leak Disaster (Registration and Processing of claims)  Act,  1985: Court giving reasons  for  the  overall settlement  order dated February 14,  1989--Compelling  duty both  judicial and humane to secure immediate relief to  the victims.

HEADNOTE:     The Bhopal Gas Leak Tragedy that occurred at midnight of 2nd  December, 1984, by the escape of deadly chemical  fumes from the appellant’s factory was a great industrial disaster and  it took an immediate toil of 2600 human lives and  left tens of thousands of innocent citizens of Bhopal  physically affected  in various ways. As per the figures  furnished  by the  Union of India in its amended plaint a total number  of 2,660  persons  suffered agonising and  excruciating  deaths between 30,000 to 40,000 persons sustained serious  injuries as a result of the said disaster.     Legal  proceedings for the recovery of compensation  for the victims were initiated against the multi-national compa- ny  first  in the U.S. Courts and later in Distt.  Court  at Bhopal in Suit No. 113 of 1986. The present appeals  concern with  the order dated 4th April, 1988 passed by  the  Madhya Pradesh  High  Court whereby it modified  the  interlocutory order dated 17.12.1987 made by the Distt. Judge and  granted interim  compensation  of Rs.250 crores. Both the  Union  of India  and  the Union Carbide Corporation have  appealed  to this Court against that order.     The  Court  by its order dated the 14th  February,  1989 made in these appeals directed that there shall be an  over- all  settlement  of the claims in the suit for  470  million U.S.  Dollars  and  termination of all  civil  and  criminal proceedings. On May 4, 1989 the Court pronounced its reasons for its aforesaid order dated 14.2.89thus:     The Statement of the reasons is not made with any  sense of  finality  as to the infallibility of the  decision;  but with  an open mind to be able to appreciate any tenable  and compelling legal or factual infirmities that may be  brought out, calling for remedy in review under Article 137 of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12  

the Constitution. [132C-D] 129     The basic consideration motivating the conclusion of the settlement  was the compelling need for urgent relief.  Con- siderations  of excellence and niceties of legal  principles were greatly over-shadowed by the pressing problems of  very survival for a large number of victims. [133A, C]     The  instant  case is one where damages  are  sought  on behalf of the victims of a mass disaster, and having  regard to  the  complexities and the legal question  involved,  any person  with  an  unbiased vision would not  miss  the  time consuming  prospect for the course of the litigation in  its sojourn through the various courts, both in India and  later in  United  States. This Court considered  it  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. What this Court did was in  continua- tion of what had already been initiated. [133E-F, H; 134A]     The  range  of  choice for the Court in  regard  to  the figures  was, therefore, between the maximum of 426  million U.S. Dollars offered by Shri Nariman and the minimum of  500 million  U.S.  Dollars suggested by  the  Attorney  General. [134F-G]     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 United States for the purpose of execution, the Court directed that 470 million U.S. Dollars which upon  immediate payment and with interest over a reasonable period,  pending actual  distribution amongst the claimants, would  aggregate very nearly to 500 million U.S. Dollars or its rupee equiva- lent  of  approximately  Rs.750 crores  which  the  Attorney General had suggested. be made the basis of the  Settlement. [134G-H; 135A-B]     The Settlement proposals were considered on the premises that the Government had the exclusive statutory authority to represent  and  act  on behalf of the  victims  and  neither counsel  had any reservation as to this. The order was  also made  on  the  premises that the Bhopal  Gas  Leak  Disaster (Registration and Processing of Claims) Act 1985 was a valid law. [135B-C]     There might be different opinions on the  interpretation of  laws  or on questions of policy or even on what  may  be considered  wise or unwise; but when one speaks  of  justice and truth, these words mean the same thing to all men  whose judgment is uncommitted. [140B-C] The compulsions of the need for immediate relief to tens of 130 thousands  of  suffering victims could not wait  till  these questions, vital though they be, are resolved in due  course of judicial proceedings. [142D-E]     A  settlement  has been recorded upon  material  and  in circumstances  which persuaded the Court that it was a  just settlement. This is not to say that this Court will shut out any  important  material and  any  compelling  circumstances which  might impose a duty on it to exercise the  powers  of review.  Like  all other human institutions, this  Court  is human and fallible. What appears to the Court to be just and reasonable in that particular context and setting, need  not necessarily appear to others in the same day. Which view  is right, in the ultimate analysis, is to be judged by what  it does  to  relieve the undeserved suffering of  thousands  of innocent citizens of this country. [142F-G]     Decisions  of  courts cannot be reacted  or  altered  or determined by agitational pressures. If a decision is wrong,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12  

the process of correction must be in a manner recognised  by law.  All  of those who invoke the corrective  processes  in accordance  with  law shall be heard and the court  will  do what the law and the course of justice requires. The  matter concerns  the  interests of a large number of victims  of  a mass  disaster. The Court directed the settlement  with  the earnest hope that it would do hem good and bring them  imme- diate  relief,  for, tomorrow might be too ate for  many  of them. But the case equally concerns the credibility of,  and the public confidence in, the judicial process. [143B, D-E] Those who trust this Court will not have cause for  despair. [143F]     M.C.  Mehta v. Union of India, AIR 1987 SC 1(186;  Theo- ries  of Compensation, R.E. Goodin: Oxford journal of  Legal Studies,  1989  p.57 and Wallace Mendelson..  Supreme  Court Statecraft--The Rule of Law and men, referred to.

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3187 and 3188 of 1988.     From the Judgment and Order dated 4.4.1988 of the Madhya Pradesh High Court in CR No. 26 of 1988.     Anil B. Dewan, J.B. Dadachanji, Mrs. A.K. Verma for  the appellant.     K.  Parasaran, A. Mariarputham, Miss A.  Subhashini  and C.L. Sahu for the Respondents. 131 The following Order of the Court was delivered: ORDER     The Bhopal Gas Leak tragedy that occurred at midnight on 2nd  December, 1984, by the escape of deadly chemical  fumes from  the  appellant’s pesticide-factory  was  a  horrendous industrial mass disaster, unparalleled in its magnitude  and devastation  and remains a ghastly monument to the  de-huma- nising  influence of inherently dangerous technologies.  The tragedy took an immediate toll of 2,660 innocent human lives and  left tens of thousands of innocent citizens  of  Bhopal physically  impaired  or affected in various  degrees.  What added   grim   poignance  to  the  tragedy  was   that   the industrial-enterprise was using Methyl Iso-cyanate, a lethal toxic poison, whose potentiality for destruction of life and biotic-communities was, apparently, matched only by the lack of a pre-package of relief procedures for management of  any accident  based on adequate scientific knowledge as  to  the ameliorative medical procedures for immediate neutralisation of its effects.     It  is unnecessary for the present purpose to refer,  in any  detail, to the somewhat meandering course of the  legal proceedings  for  the  recovery  of  compensation  initiated against  the multi-national company initially in the  Courts in  the United States of America and later in  the  District Court at Bhopal in Suit No. 113 of 1986. It would suffice to refer to the order dated 4 April, 1988 of the High Court  of Madhya Pradesh which, in modification of the  interlocutory- order  dated 17 December, 1987 made by the learned  District Judge,  granted  an interim compensation of  Rs.250  crores. Both  the Union of India and the Union  Carbide  Corporation appealed against that order.     This Court by its order dated 14 February, 1989 made  in those  appeals directed that there be an overall  settlement of  the claims in the suit, for 470 million US  dollars  and termination  of  all  civil and  criminal  proceedings.  The opening words of the order said:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12  

                      "Having given our careful  considera-               tion  for these several days to the facts  and               circumstances of the case placed before us  by               the  parties in these  proceedings,  including               the pleadings of the parties, the mass of data               placed before us, 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               132               during the various proceedings, as well as the               complex  issues of law and fact raised  before               us  and  the submission 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,               we  are of opinion that the case  is  pre-emi-               nently  fit for an overall settlement  between               the parties covering all litigations,  claims,               rights and liabilities related to and  arising               out of the disaster  .....  "               (Emphasis Supplied)                   It  appears  to us that the  reasons  that               persuaded  this  Court to make the  order  for               settlement  should be set-out, so  that  those               who have sought a review might be able  effec-               tively  to assist the Court in  satisfactorily               dealing  with  the prayer for  a  review.  The               statement of the reasons is not made with  any               sense  of finality as to the infallibility  of               the decision; but with an open mind to be able               to appreciate any tenable and compelling legal               or  factual  infirmities that may  be  brought               out, calling for remedy in Review under  Arti-               cle 137 of the Constitution.                   The points on which we propose to  set-out               brief reasons are the following:               (a)  How did this Court arrive at the  sum  of               470 million US dollars for an over-all settle-               ment?               (b) Why did the Court consider this sum of 470               million  US  dollars as ’just,  equitable  and               reasonable’?               (c) Why did the Court not pronounce 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 multi-national  compa-               nies   operating  with  inherently   dangerous               technologies  in the developing  countries  of               the third world--questions said to be of great               contemporary  relevance to the democracies  of               the third-world?     There is yet 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  Re- view-petitions,  prima  facie, merit  consideration  and  we should, therefore, abstain from saying anything which  might tend to pre-judge this issue one way or the other. 133     The basic consideration motivating the conclusion of the settlement  was the compelling need for urgent  relief.  The suffering  of the victims has been intense  and  unrelieved. Thousands  of persons who pursued their own occupations  for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12  

an humble and honest living have been rendered destitute  by this ghastly disaster. Even after four years of  litigation, basic questions of the fundamentals of the law as to liabil- ity  of  the Union Carbide Corporation and  the  quantum  of damages are yet being debated. These, of course, are  impor- tant issues which need to be decided. But, when thousands of innocent citizens were in near destitute conditions, without adequate  subsistential needs of food and medicine and  with every  coming  morrow haunted by the spectre  of  death  and continued  agony, it would be heartless abstention,  if  the possibilities  of immediate sources of relief were  not  ex- plored.  Considerations of excellence and niceties of  legal principles were greatly over-shadowed by the pressing  prob- lems of very survival for a large number of victims.     The  Law’s delays are, indeed, proverbial. It  has  been the  unfortunate  bane  of the judicial  process  that  even ordinary  cases, where evidence consists of a few  documents and  the  oral testimony of a few  witnesses,  require  some years  to realise the fruits of litigation. This is so  even in  cases of great and unquestionable urgency such as  fatal accident  actions brought by the dependents. These are  hard realities. The present case is one where damages are  sought on  behalf  of the victims of a mass  disaster  and,  having regard to the complexities and the legal questions involved, any  person with an unbiased vision would not miss the  time consuming  prospect for the course of the litigation in  its sojourn through the various courts, both in India and  later in United States.     It  is indeed a matter for national  introspection  that public response to this great tragedy which affected a large number  of poor and helpless persons limited itself  to  the expression  of understandable anger against  the  industrial enterprise  but did not channel itself in any effort to  put together a public supported relief fund so that the victims were  not left in distress, till the final decision  in  the litigation. It is well known that during the recent  drought in  Gujarat, the devoted efforts of public spirited  persons mitigated,  in great measure, the loss of  cattle-wealth  in the near famine conditions that prevailed.     This Court, considered it a compelling duty, both  judi- cial and humane, to secure immediate relief to the  victims. In  doing  so, the Court did not enter  upon  any  forbidden ground. Indeed, efforts had 134 earlier  been made in this direction by Judge Keenan in  the United  States and by the learned District Judge at  Bhopal. What this Court did was in continuation of what had  already been initiated. Even at the opening of the arguments in  the appeals, the Court had suggested to learned counsel on  both sides  to  reach  a just and fair  settlement.  Again,  when counsel met for re-scheduling of the hearings the suggestion was  reiterated.  The response of learned  counsel  on  both sides  was  positive in attempting a  settlement,  but  they expressed  a certain degree of uneasiness and scepticism  at the prospects of success in view of their past experience of such  negotiations  when,  as they stated,  there  had  been uninformed and even irresponsible criticism of the  attempts at  settlement. The learned Attorney General submitted  that even  the  most bona fide, sincere and  devoted  efforts  at settlement were likely to come in for motivated criticism.     The  Court asked learned counsel to make  available  the particulars  of offers and counter offers made  on  previous occasions for a mutual settlement. Learned counsel for  both parties furnished particulars of the earlier offers made for an  overall  settlement and what had been  considered  as  a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12  

reasonable basis in that behalf. The progress made by previ- ous  negotiations was graphically indicated and these  docu- ments form part of the record. Shri Nariman stated that  his client would stand by its earlier offer of Three Hundred and Fifty Million US dollars and also submitted that his  client had  also offered to add appropriate interest, at the  rates prevailing  in  the  U.S.A., to the sum of  350  million  US dollars  which raised the figure to 426 million US  dollars. Shri  Nariman  stated that his client was of the  view  that amount  was the highest it could go upto. In regard to  this offer of 426 million US dollars the learned Attorney-General submitted that he could not accept this offer. He  submitted that  any sum less than 500 million US dollars would not  be reasonable.  Learned  counsel for both parties  stated  that they  would leave it to the Court to decide what  should  be the  figure  of compensation. The range of  choice  for  the Court  in regard to the figure was, therefore,  between  the maximum  of 426 million US dollars offered by  Shri  Nariman and  the minimum of 500 million US dollars suggested by  the learned Attorney General.     In  these  circumstances, the Court examined  the  prima facie  material as to 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 United States for the purpose of execution  and  di- rected  that  470 million US dollars, which  upon  immediate payment 135 and  with interest over a reasonable period, pending  actual distribution  amongst  the claimants, would  aggregate  very nearly to 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 the  settlement. Both the parties accepted this direction.     The settlement proposals were considered on the  premise that  Government  had the exclusive statutory  authority  to represent  and  act  on behalf of the  victims  and  neither counsel  had any reservation as to this. The order was  also made  on  the  premise that the  Bhopal  Gas  Leak  Disaster (Registration  and  Processing of Claims) Act,  1985  was  a valid  law.  In the event the Act is declared  void  in  the pending  proceedings  challenging its  validity,  the  order dated 14, February, 1989 would require to be examined in the light of that decision.     We  should make it clear that if any material is  placed before  this  Court  from which a  reasonable  inference  is possible that the Union Carbide Corporation had, at any time earlier,  offered  to pay any sum higher than  an  out-right down  payment  of US 470 million dollars, this  Court  would straightaway  initiate  suo motu action requiring  the  con- cerned  parties to show cause why the order dated 14  Febru- ary, 1989 should not be set aside and the parties  relegated to their respective original positions.     The next question is as to the basis on which this Court considered  this  sum to be a reasonable one.  This  is  not independent  of its quantification, the idea of  reasonable- ness  for  the present purpose is necessarily  a  broad  and general  estimate  in  the context of a  settlement  of  the dispute  and not on the basis of an accurate  assessment  by adjudication.  The question is how good or reasonable it  is as a settlement, which would avoid delays, uncertainties and assure  immediate payment. The estimate, in the very  nature of  things,  cannot share the accuracy of  an  adjudication. Here again one of the important considerations was the range

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12  

disclosed by the offers and counter offers which was between 426 million US dollars and 500 million US dollars. The Court also examined certain materials available on record  includ- ing  the  figures mentioned in the pleadings,  the  estimate made by the High Court and also certain figures referred  to in the course of the arguments.     There are a large number of claims under the Act. In the very nature of the situation, doubts that a sizeable  number of them are either without any just basis or were  otherwise exaggerated could not 136 be ruled out. It was, therefore, thought not unreasonable to proceed  on some prima facie undisputed figures of cases  of death and of substantially compensatable personal  injuries. The  particulars  of the number of persons  treated  at  the hospitals  was an important indicator in that  behalf.  This Court  had no reason to doubt the bona fides of the  figures furnished by the plaintiff itself in the pleadings as to the number of persons suffering serious injuries.     From the order of the High Court and the admitted  posi- tion on the plaintiff’s own side, a reasonable, prima facie, estimate  of the number of fatal cases and serious  personal injury cases, was possible to be made. The High Court said:               "   .....   In the  circumstances,  leaving  a               small  margin for the possibility of  some  of               the  claims  relating to  death  and  personal               injuries  made  by  the  multitude  of  claims               before  the  Director of Claims of  the  State               Government being spurious, there is no  reason               to  doubt  that the figure  furnished  by  the               plaintiff Union of India in its amended plaint               can  be  safely accepted for  the  purpose  of               granting  the  relief’ of interim  payment  of               damages.  It has been stated by the  plaintiff               Union  of  India that a total number  of  2660               persons  suffered agonising  and  excruciating               deaths and between 30,000 to 40,000  sustained               serious  injuries  as a result of  the  disas-               ter  .....  "               (Emphasis supplied)     There is no scope for any doubt that the cases  referred to  as  those of ’Serious injuries’ include  both  types  of cases of permanent total and partial disabilities of various degrees as also cases of temporary total or partial disabil- ities  of different degrees. The High Court relied upon  the averments and claims in the amended pleadings of the  plain- tiff, the Union of India, to reach this prima facie finding.     Then,  in assessing the quantum of interim  compensation the  High Court did not adopt the standards of  compensation usually  awarded  in  fatal-accidents-actions  or  personal- injury-actions  arising under the Motor Vehicles Act. It  is well-known that in fatal-accidentactions where children  are concerned,  the  compensation awardable is  in  conventional sums  ranging from Rs.15,000 to Rs.30,000 in each  case.  In the present case a large number of deaths was of children of very young age. Even in the case of adults, according to the general  run  of damages in comparable  cases,  the  damages assessed on the 137 usual  multiplier-method in the case of income  groups  com- parable to those of the deceased-persons, would be  anywhere between Rs.80,000 and Rs. 1,00,000.     But  the High Court discarded, and rightly, these  ordi- nary  standards  which, if applied, would have  limited  the aggregate  of compensation payable in fatal cases to  a  sum

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12  

less  than  Rs.20 crores in all. The High Court  thought  it should adopt the broader principle in M.C. Mehta v. Union of India, AIR 1987 SC 1086. Stressing the need to apply such  a higher standard, the High Court said:               "As mentioned earlier, the measure of  damages               payable by the alleged tort-teaser as per  the               nature of tort involved in the suit has to  be               correlated  to the magnitude and the  capacity               of  the enterprises because such  compensation               must have a deterrent effect  .........               (Emphasis supplied)               Applying  these higher standards of  compensa-               tion,  the  High  Court  proceeded  to  assess               damage in the following manner:               "Bearing  in mind, the above factors,  in  the               opinion of this Court, it would not be  unrea-               sonable  to assume 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  at               least in the following amounts: (a) Rs.2 lakhs               in each case of death: (b) Rs.2 lakhs in  each               case  of total permanent disability; (c)  Rs.1               lakh  in each case of permanent partial  disa-               blement  and  (d) Rs.50,000 in  each  case  of               temporary partial disablement."               (Emphasis supplied) Half of these amounts were awarded as interim  compensation. An amount of Rs.250 crores was awarded.     The  figures adopted by the High Court in regard to  the number of fatal cases and cases of serious personal injuries do  not appear to have been disputed by anybody  before  the High Court. These data and estimates of the High Court had a particular  significance in the settlement. Then  again,  it was  not disputed before us that the total number  of  fatal cases  was about 3000 and of grievous and  serious  personal injuries, as verifiable from the records of the hospitals of cases treated 138 at Bhopal, was in the neighbourhood of 30,000. It would  not be unreasonable to expect that persons suffering serious and substantially compensable injuries would have gone to hospi- tals for treatment. It would also appear that within about 8 months  of the occurrence, a survey had been  conducted  for purposes  of identification of cases of death  and  grievous and serious injuries for purposes of distribution of certain ex  gratia payments sanctioned by Government. These  figures were, it would appear, less than ten thousand.     In  these 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 at 3000  where compensation could range from Rs.l lakh to  Rs.3 lakhs.  This would account for Rs.70 crores, nearly 3  times higher than what would, otherwise, be awarded in  comparable casses in motor vehicles accident claims.     Death  has an inexorable finality about it. Human  lives that  have been lost were precious and in that sense  price- less  and invaluable. But the law can compensate the  estate of a person whose life is lost by the wrongful act of anoth- er only in the way of the law is equipped to compensate i.e. by monetary compensations calculated on certain  well-recog- nised principles. "Loss to the estate" which is the entitle- ment of the estate and the ’loss of dependancy’ estimated on the  basis  of capitalised present-value  awardable  to  the heirs and dependants, are the main components in the  compu-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12  

tation  of compensation in fatal accident actions. But,  the High  Court  in  estimating the value  of  compensation  had adopted a higher basis.     So  far  as personal injury cases are  concerned,  about 30,000 was estimated as cases of permanent total or  partial disability.   Compensation  ranging  from  Rs.2   lakhs   to Rs.50,000  per  individual according as  the  disability  is total  or partial and degrees of the latter  was  envisaged. This  alone  would  account for Rs.250  crores.  In  another 20,000  cases of temporary total or partial disability  com- pensation ranging from Rs. 1 lakh down to Rs.25,000  depend- ing on the nature and extent of the injuries and extent  and degree  of  the temporary incapacitation  accounting  for  a further allocation of Rs. 100 crores, was envisaged.  Again, there might be possibility of injuries of utmost severity in which  case even Rs.4 lakhs per individual might have to  be considered.  Rs.80  crores, additionally for about  2000  of such  cases were envisaged. A sum of Rs.500 crores  approxi- mately  was thought of as allocable to the fatal  cases  and 42,000  cases  of  such serious  personal  injuries  leaving behind in their trail total or partial incapacitation either of permanent or temporary character. 139     It  was  considered that some outlays would have  to  be made  for  specialised institutional medical  treatment  for cases requiring such expert medical attention and for  reha- bilitation and after care. Rs.25 crores for the creation  of such facilities was envisaged.     That would leave another Rs.225 crores. It is true  that in  assessing  the interim compensation the High  Court  had taken  into account only the cases of injuries resulting  in permanent or temporary disabilities--total--or  partial--and had  not adverted to the large number of other claims,  said to run into lakhs, filed by other claimants.     Such  cases  of claims do not,  apparently,  pertain  to serious cases of permanent or temporary disabilities but are cases of a less serious nature, comprising claims for  minor injuries,  loss of personal belongings, loss  of  live-stock etc.  for  which there was a general  allocation  of  Rs.225 crores.  If in respect of these claims allocations are  made at  Rs.20,000,  Rs. 15,000 and Rs. 10,000 for  about  50,000 person or claims in each category--accounting for about  one and  half lakhs more claims--the sums required would be  met by Rs.225 crores.     Looked  at from another angle, if the corpus  of  Rs.750 crores  along with the current market rates of  interest  on corporate borrowings, of say 14% or 14 1/2 % is spent over a period of eight years it would make available Rs. 150 crores each year; or even if interest alone is taken, about Rs. 105 to  110  crores  per year could  be  spent,  year-afteryear, perpetually towards compensation and relief to the victims.     The  court also took into consideration the general  run of  damages in comparable accident claim cases and in  cases under workmens compensation laws. The broad allocations made are  higher than those awarded or awardable in such  claims. These apportionments are merely broad considerations  gener- ally guiding the idea of reasonableness of the overall basis of  settlement. This exercise is not a  predetermination  of the  quantum  of compensation amongst the  claimants  either individually or category-wise. No individual claimant  shall be  entitled to claim a particular quantum  of  compensation even  if his case is found to fall within any of  the  broad categories indicated above. The determination of the  actual quantum  of compensation payable to the claimants has to  be done  by the authorities under the Act, on the basis of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12  

facts of each case and without reference to the hypothetical quantifications made only for purposes of an overall view of the adequacy of the amount. 140     These  are the broad and general assumptions  underlying the concept of ’justness’ of the determination of the  quan- tum. If the total number of cases of death or of  permanent, total  or  partial, disabilities or of what  may  be  called ’catastrophic’  injuries  is shown to be so large  that  the basic  assumptions underlying the settlement  become  wholly unrelated to the realities, the element of ’justness’ of the determination  and of the ’truth’ of its factual  foundation would  seriously be impaired. The ’justness’ of the  settle- ment  is based on these assumptions of truth. Indeed,  there might be different opinions on the interpretation of laws or on  questions  of policy or even on what may  be  considered wise  or unwise; but when one speaks of justice  and  truth, these words mean the same thing to all men whose judgment is uncommitted. Of Truth and Justice, Anatole France said:               "Truth  passes  within herself  a  penetrating               force unknown alike to error and falsehood.  I               say truth and you must understand  my meaning.               For the beautiful words Truth and Justice need               not  be defined in order to be  understood  in               their  true  sense. They bear  within  them  a               shining beauty and a heavenly light. I  firmly               believe  in the triumph of truth and  justice.               That is what upholds me in times of trial ......"     As to the remaining question, it has been said that many 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  danger- ous technologies for economic gains by multi-nationals arose in  this case. It is said that this is an instance  of  lost opportunity  to  this  apex Court to give the  law  the  new direction  on  vital  issues emerging  from  the  increasing dimensions of the economic exploitation of developing  coun- tries  by economic forces of the rich ones. This case  also, it  is said, concerns the legal limits to be  envisaged,  in the vital interests of the protection of the  constitutional rights  of  the citizenry, and of the  environment,  on  the permissibility  of such ultra-hazardous technologies and  to prescribe  absolute and deterrent standards of liability  if harm is caused by such enterprises. The prospect of  exploi- tation  of cheap labour and of captive-markets, it is  said, induces  multi-nationals to enter into the developing  coun- tries  for  such  economic-exploitation and  that  this  was eminently  an appropriate case for a careful  assessment  of the legal and Constitutional safeguards stemming from  these vital issues of great contemporary relevance. These issues and certain cognate areas of even wider signif- icance 141 and  the limits of the adjudicative disposition of  some  of their  aspects are indeed questions of  seminal  importance. The  culture  of modern industrial  technologies,  which  is sustained on processes of such pernicious potentialities, in the ultimate analysis, has thrown open vital and fundamental issues  of  technology-options. Associated problems  of  the adequacy  of legal protection against such exploitative  and hazardous  industrial adventurism, and whether the  citizens of the country are assured the protection of a legal  system which could be said to be adequate in a comprehensive  sense in  such contexts arise. These, indeed, are issues of  vital

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12  

importance and this tragedy, and the conditions that enabled it happen, are of particular concern.     The  chemical pesticide industry is a  concomitant,  and indeed,  an  integral part, of the  Technology  of  Chemical Farming.  Some experts think that it is time to return  from the high-risk, resource-intensive, high-input, anti-ecologi- cal, monopolistic ’hard’ technology which feeds, and is  fed on,  its self-assertive attribute, to a more human  and  hu- mane,  flexible, eco-conformable, "soft" technology with its systemic-wisdom  and opportunities for human creativity  and initiative. "Wisdom demands" says Schumacher" a new orienta- tion  of  science and technology towards  the  organic,  the gentle,  the  non-violent, the elegant and  beautiful".  The other view stressing the spectacular success of agricultural production  in the new era of chemical farming,  with  high- yielding  strains, points to the break-through  achieved  by the  Green  Revolution with its effective response  to,  and successful  management of, the great challenges  of  feeding the millions. This technology in agriculture has given a big impetus  to enterprises of chemical fertilizers  and  pesti- cides.  This, say its critics, has brought in its trail  its own  serious problems. The technology-options before  scien- tists and planners have been difficult.     Indeed,  there is also need to evolve a national  policy to  protect  national interests  from  such  ultra-hazardous pursuits of economic gains. Jurists, technologists and other experts in Economics, environmentology, futurology, sociolo- gy  and public health etc. should identify areas  of  common concern  and  help  in evolving proper  criteria  which  may receive judicial recognition and legal sanction.     One  aspect of this matter was dealt with by this  Court in  M.C.  Mehta v. Union of India, (supra)  which  marked  a significant stage in the development of the law. But, at the hearing  there was more than a mere hint in the  submissions of  the Union Carbide that in this case the law was  altered with only the Union Carbide Corporation in mind, and 142 was  altered  to its disadvantage even before the  case  had reached  this Court. The criticism of the  Mehta  principle, perhaps, ignores the emerging postulates of tortious liabil- ity  whose principal focus is the social-limits on  economic adventurism.  There  are  certain things  that  a  civilised society simply cannot permit to be done to its members, even if  they are compensated for their resulting losses. We  may note  a passage in "Theories of Compensation," R.E.  Goodin: Oxford Journal of Legal Studies, 1989, P. 57.               "It  would, however, be wrong to presume  that               we  as  a society can do anything we  like  to               people, just so long as we compensate them for               their losses. Such a proposition would mistake               part of the policy universe for the whole. The               set  of policies to which it  points--policies               that are ’permissible’ but only with compensa-               tion’--is bounded on the one side by a set  of               policies  that are ’permissible, even  without               compensation’  and on the other side by a  set               of policies that are ’impermissible, even with               compensation’."     But,  in the present case, the compulsions of  the  need for  immediate  relief  to tens of  thousands  of  suffering victims  could  not, in our opinion, wait till  these  ques- tions, vital though they be, are resolved in the due  course of  judicial proceedings. The tremendous suffering of  thou- sands of persons compelled us to move into the direction  of immediate  relief which, we thought, should not be  subordi-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12  

nated  to  the uncertain promises of the law, and  when  the assessment  of fairness of the amount was based  on  certain factors and assumptions not disputed even by the plaintiff.     A few words in conclusion. A settlement has been record- ed  upon material and in circumstances which  persuaded  the Court that it was a just settlement. This is not to say that this Court will shut out any important material and  compel- ling  circumstances  which might impose the duty  on  it  to exercise the powers of review. Like all other human institu- tions, this court is human and fallible. What appears to the court  to be just and reasonable in that particular  context and  setting, need not necessarily appear to others  in  the same  way. Which view is right,in the ultimate analysis,  is to  be  judged  by what it does to  relieve  the  undeserved suffering of thousands of innocent citizens of this country. As  a learned author said: Wallace Mendelson: Supreme  Court Statecraft--The Rule of Law and Men.               "In  this  imperfect legal setting  we  expect               judges to clear               143               their endless dockets, uphold the Rule of Law,               ’and  yet not utterly disregard our  need  for               the discretionary justice of Plato’s  philoso-               pher  king. Judges must be sometimes  cautious               and  sometimes bold. Judges must respect  both               the traditions of the past and the convenience               of the present........" But the course of the decisions of courts cannot be  reached or  altered  or determined by agitational  pressures.  If  a decision  is wrong, the process of correction must be  in  a manner  recognised  by law. Here, many  persons  and  social action groups claim to speak for the victims, quite a few in different voices. The factual allegations on which they rest their approach are conflicting in some areas and it  becomes difficult  to  distinguish truth from false-hood  and  half- truth, and to distinguish as to who speaks for whom.     However, all of those who invoke the corrective-process- es in accordance with law shall be heard and the court  will do  what  the law and the course of  justice  requires.  The matter  concerns the interests of a large number of  victims of  a mass disaster. The Court directed the settlement  with the  earnest hope that it would do them good and bring  them immediate  relief, for, tomorrow might be too late for  many of  them. But the case equally concerns the credibility  of, and  the  public confidence in, the  judicial  process.  If, owing to the pre-settlement procedures being limited to  the main contestants in the appeal, the benefit of some contrary or  supplemental information or material, having  a  crucial bearing on the fundamental assumptions basic to the  settle- ment,  have been denied to the Court and that, as a  result, serious miscarriage of justice, violating the constitutional and  legal  rights of the persons affected, has  been  occa- sioned,  it will be the endeavour of this Court to undo  any such  injustice. But that, we reiterate, must be  by  proce- dures recognised by law. Those who trust this Court will not have cause for despair. 144