TMI Blog1991 (10) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... Mrs. K. Hingorani, R.B. Mehrotra, Ms. Lalitha Kaushik, D.K. Garg, Raju Ramachandran, Mukul Mudgal, S.R. Bhat, M.S. Ganesh, V.B. Mishra, A.N. Khanwilkar, Ms. Madhu Khatri, P. Parmeswaran, Sakesh Kumar, Satish K. Agnihotri, K. Kachwaha, Mrs. A.K. Verma, Ashok Sagar, Dadachanji, Vijay Gupta, Ms. A. Subhashini, C.S. Vaidyanathan and Ashok Singh for the appearing Parties. The Judgment of the Court was delivered by RANGANATH MISRA, CJ. I entirely agree with my noble and learned Brother Venkatachaliah and hope and trust that the judgment he as produced is the epitaph on the litigation. I usually avoid multiple judgments but this seems to be a matter where something more than what is and in the main judgment perhaps should be said. Early in the morning of December 3, 1984, one of the greatest industrial tragedies that history has recorded got clamped down on the otherwise quiet township of Bhopal, the capital of Madhya Pradesh. The incident was large in magni- tude - 2,600 people died instantaneously and suite a good number of the inhabitants of the town suffered from several ailments. In some cases the reaction manifested contempora- neously and in others the effect was to manifest its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not deemed to be conclusive if: 1. The judgment was rendered under a system which does not provide impartial tribunals or procedures, compatible with the requirements of due process of law; 2. The foreign court did not have personal jurisdiction over the defendant . Art. 53. Recognition of Foreign Country Money Judgments. Although 5304 further provides that under certain specified conditions a foreign country judgment need not be recognized, none of these conditions would apply to the present cases except for the possibility of failure to provide UCC with sufficient notice of procedings or the exist- ence of fraud in obtaining the judgment, which do not presently exist but conceivably could occur in the future. The Court rejected the plea advanced by UCC of breach of due process by non-observance of proper standards and ulti- mately stated: Any denial by the Indian Courts of due proc- ess can be raised by UCC as a defence to the plaintiffs' later attempt to enforce a result- ing judgment against UCC in this country. After Judge Keenan made the order of 12th of May, 1986, in September of that year Union of India in exercise of its power under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third- world? The Court indicated that considerations of excellence and niceties of legal principles were greatly overshadowed by the pressing problems of very survival of a large number of victims. The Court also took into account the law's proverbial delays. In paragraph 31 of its order the Consti- tution Bench said: As to the remaining question, it has been said that many vital juristic princi- ples of great contemporary relevance to the Third World generally, and to India in partic- ular, touching problems emerging from the pursuit of such dangerous 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 of new vital issues emerging from the increasing dimensions of the economic exploitation of developing countries by economic forces of the rich ones. This case also, it is said, concerns the legal limits to be envisaged by the vital interests of the protection of the constitutional right of the citizenry, and of the environment, on the permissibilities of such ultra-hazardous tech- nologies and to prescribe absolute and deter- rent standards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itations of review have not been invoked in this case by the Court and all aspects have been permitted to be placed before the Court for its consid- eration. It is interesting to note that there has been no final adjudication in a mass tort action anywhere. The several instances which counsel for the parties placed before us were cases where compensation had been paid by consent or where settlement was reached either directly or through a circuitous process. Such an alternate procedure has been adopted over the years on account of the fact that trial in a case of this type would be protracted and may not yield any social benefit. Assessment of compensation in cases of this type has generally been by a rough and ready process. In fact, every assessment of compensation to some extent is by such process and the concept of just compensation is an attempt to approximate compensation to the loss suffered. We have pointed out in our order of May 4, 1989, that the estimate in the very nature of things cannot share the accuracy of an adju- dication'. I would humbly add that even an adjudication would only be an attempt at approximation. This Court did take into account while acceptin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in judg- ment squarely deals with it and nothing more need be said. As far as the second aspect goes, the argument has been that the principle enunciated by this Court in M.C Mehta v. Union of India, [1987] 1 SCC 395 should have been adopted. The rule in Rylands v. Fletcher [1868] 3 House of Lords 330 has been the universally accepted authority in the matter of determining compensation in tort cases of this type. Ameri- can jurisprudence writers have approved the ratio of that decision and American Courts too have followed the 'decision as a precedent. This Court in paragraph 31 of the Mehta judgment said: The Rule of Rylands v. Fletcher was evolved in the year 1866 and it provides that a person who for his own purposes brings on to his land and collects and keeps there anything likely to do mischief if it escapes must keep it at his peril and, if he fails to do so, is prima facie liable for the damage which is the natural consequence of its escape. The liability under this rule is strict and it is no defence that the thing escaped without that person's wilful act, default or neglect or even that he had no knowledge of its existence. This rule laid down a principle of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... countenance an argument that merely because the law in England does not recognise the rule of strict and absolute liability in cases of hazardous or inherently dangerous activities or the rule laid down in Rylands v. Fletcher as developed in England recognises certain limitations and excep tions, we in India must hold back our hands and not venture to evolve a new principle of liability since English courts have not done so. We have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future on account of hazard- ous or inherently dangerous industries which are concommi- tant to an industrial economy, there is no reason why we should hesitate to evolve such principle of liabili- ty merely because it has not been so done in England. We are of the view that an enterprise which is engaged in a haz- ardous or inherently dangerous 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-delegable duty to the commu- nity to ensure that no harm results ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Shriram (the delinquent company) came within the meaning of State in Article 12 so as to be liable to the discipline of Article 21 and to be subjected to a proceeding under Article 32 of the Constitution. Thus what was said essentially obiter. The extracted part of the conservation from M.C. Mehta's case perhaps is a good guideline for working out compensa- tion in the cases to which the ratio is intended to apply. The statement of the law ex-facie makes a departure from the accepted legal position in Rylands v. Fletcher. We have not been shown any binding precedent from the American Supreme Court where the ratio of M. C. Mehta's decision has in terms been applied. In fact Bhagwati, CJ clearly indicates in the judgment that his view is a departure from the law applica- ble to the western countries. We are not concerned in the present case as to whether the ratio of M.C. Mehta should be applied to cases of the type referred to in it in India. We have to remain cognizant of the fact that the Indian assets of UCC through UCIL are around ₹ 100 crores or so. For any decree in excess of that amount, execution has to be taken in the United States and one has to rememb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealing with this case this Court has always taken a pragmatic approach. The oft-quoted saying of the great American Judge that 'life is not logic but experience' has been remembered. Judges of this Court are men and their hearts also bleed when calamities like the Bhopal gas leak incident occur. Under the constitutional discipline determi- nation of disputes has been left to the hierarchical system of Courts and this Court at its apex has the highest concern to ensure that Rule of Law works effectively and the cause of justice in no way suffers. To have a decree after strug- gling for a quarter of a century with the apprehension that the decree may be ultimately found. not to be executable would certainly not have been a situation which this Court could countenance. In the order of May 4, 1989, this Court had clearly indicated that it is our obligation to uphold the rights of the citizens and to bring to them a judicial fitment as available in accordance with the laws. There have been several instances where this Court has gone out of its way to evolve principles and make directions which would meet the demands of justice in a given situation. This, however, is not an oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e many mansions in the house of Jurisprudence, and I would not be little any one's perspective on law in society, provided only. that he does not insist that his is the only perspective that gives a true and mean- ingful view of ultimate legal reality. In the facts and circumstances indicated and for the reasons adopted by my noble brother in the judgment. I am of the view that the decree obtained on consent terms for compensation does not call for review. I agree with the majority view. VENKATACHALIAH, J. - These Review Petitions under Arti- cle 137 and Writ Petitions under Article 32 of the Constitu- tion of India raise certain fundamental issues as to the constitutionality, legal-validity, propriety and fairness and conscionability of the settlement of the claims of the victims in a mass-tort-action relating to what is known as the Bhopal Gas Leak Disaster considered world's industrial disaster, unprecedented as to its nature and magnitude. The tragedy, in human terms, was a terrible one. It has taken a toll of 4000 innocent human lives and has left tens of thousands of citizens of Bhopal physically affected in various degrees. The action was brought up by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity for destruction of life and biotic-communities was, apparently, matched only by the lack of a prepackage 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. The toll of life has since gone up to around four thousand and the health of tens of thousands of citizens of Bhopal City has come to be affected and impaired in various degrees of seriousness. The effect of the exposure of the victims to Methyl Isocyanate (MIC) which was stored in considerably large quantities in tanks in the chemical plant of the UCIL which escaped on the night of the 2nd of December 1984 both in terms of acute and chronic episodes has been much discussed. There has been growing body of medical literature evaluating the magnitude and intensity of the health hazards which the exposed popu- lation of Bhopal suffered as immediate effects and to which it was potentially put at risk. It is stated that the MIC is the most toxic chemical in industrial use. The petitioners relied upon certain studies on the subject carried out by the Toxicology Laboratory, Department of Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from 3rd December, 1989 upto April, 1990 indicate that in all the severely affected, moderately affected and mildly affected areas the morbidity trend initially showed a decline compared with the acute phase. But the analysis for the later periods, it is alleged, showed a significant trend towards increase of respiratory, opthalmic and general morbidity in all the three areas. It is also sought to be pointed out that the fatal miscarriages in the exposed group was disturbingly higher than in the control group as indicated by the studies carried out by medical researchers. One of the points urged is that the likely long term effects of exposure have not been taken into account in approving the settlement and that the only way the victims' interests could have been protected against future aggrava- tion of their gas related health hazards was by the incorpo- ration of an appropriate re-opener clause. 3. On 29th of March, 1985 the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (Act) was passed authoris- ing the Government of India, as parens patriae exclusively to represent the victims so that interests of the victims of the disaster are fully protected, and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the municipal laws of the country and therefore subject to the statutes in India which prohibit any such control by a foreign company over its Indian subsidiary, except the exercise of rights as share-holder permitted by-law. The UCC also resisted the choice of the American Forum on the plea of Forum-Non-Conveniens. Union of India sought to demonstrate that the suggested alternative forum before the judiciary in India was not an 'adequate' forum pointing out the essential distinction between the American and Indian systems of Tort Law both substantive and procedural available under and a comparison of the rights, remedies and procedure the competing alternative forums. The nature and scope of a defendant's plea of Forum Non-Conveniens and the scope of an enquiry on such plea have received judicial considerations before the Supreme Court of United States of America in Gulf Oil Corp. v. Gilbert [330 U.S. 501], Koster v. Lumbermens Mutual Casualty Co. 1330 U.S. 518] and Piper Aircraft Co. v. Reyno [454 U.S. 235]. The comparison of rights, remedies and procedures avail- able in the two proposed forums though not a major-factor , nevertheless, were relevant test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prior to 1980 when the Rules of Supreme Court in England were amended (Amendment No. 2/1980) Courts in United Kingdom refused interim-payments in actions for damages. In Moore v. Assignment Courier 1977 (2) All ER 842 (CA)], it was recog- nised that there was no such power in common law. It was thereafter that the rules of the Supreme Court were amend- ed by inserting Rules 10 and 11 of Order 29 Rules of Supreme Court specifically empowering the High Court to grant inter- im relief in tort injury actions. The amended provision stipulated certain preconditions for the invokability of its enabling provision. But in England Lord Denning in the Court of Appeal thought that even under the common by the court could make an interim award for damages [(See Lim Poh too v. Camden Islington Area Health Authority, (1979 1 AER 332). But his view was disapproved by the House of Lords (See 1979 (2)AER 910 at pages 913, 914). Lord Scarman said: Lord Denning MR in the Court of Appeals declared that a radical reappraisal of the law is needed. I agree. But I part company with him on ways and means. Lord Denning MR be- lieves it can be done by the Judges, whereas I would suggest to your Lor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustain the interim award on the inherent powers of the court preserved in Section 151 CPC. But the High Court of Madhya Pradesh thought that appeal to and reliance on Section 151 was not appropriate It invoked Section 9 CPC read with the principle underlying the English Amendment, without its strict pre-conditions. The correctness of this view was assailed by the UCC before this Court in the appeal. On 14th February, 1989 this Court recorded an over-all settlement of the claims in the suit for 470 million U.S. Dollars and the consequential termination of all civil and criminal proceedings. The relevant portions of the order of this Court dated 14th February, 1989 provide: (1) The Union Carbide Corporation shall pay a sum of U.S. Dollars 470 millions (Four hundred and seventy Millions) to the Union of India in full settlement of all claims, rights and liabilities related to and arising out of the 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 settle- ment, all civil proceedings related to and arising out of the Bhopal Gas disaster sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so stand discharged. A further order was made by this Court on 15th February, which, apart from issuing directions in paragraphs 1 and 2 thereof as to the mode of payment of the said sum of 470 million U.S. Dollars pursuant to and in terms of the settle- ment, also provided the following: 3. Upon full payment of the sum referred to in paragraph 2 above: (a) The Union of India and the State of Madhya Pradesh shall take all steps which may in future become necessary in order to implement and give effect to this order including but not limited to ensuring that any suits, claims or civil or criminal complaints which may be filed in future against any Corporation, Company or person referred to in this settle- ment are defended by them and disposed of in terms of this order (b) Any such suits, claims or civil or crimi- nal proceedings filed or to be filed before any court or authority are hereby enjoined and shall not be proceeded with before such court or authority except for dismissal of quashing in terms of this order. 4. Upon full payment in accordance with the Court's directions: (a) The undertaking given by Union Carbide Corporation pursu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issues and certain cognate areas of even wider significance 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 exploita- tive 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 importance and this tragedy, and the conditions that enabled it happen, are of particular concern. 33. 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-ecological, monopolistic 'hard' technology which feeds, and is fed on, its self-assertive attribute, to a more human and humane flexible: eco-co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their obligations under the settlement. The UCC deposited 420 million U.S. Dollars and the UCIL the rupee equivalent of 45 million U.S. Dollars. 5 million U.S. Dollars directed by Judge Keenan to be paid to the Interna- tional Red Cross was given credit to. The petitioners urge that even after setting aside of the settlement, there is no compulsion or obligation to restore to the UCC the amounts brought into Court by it as such a step would prejudicially affect the interests of the victims. The other cognate question is whether, if UCC is held entitled to such resti- tution, should it not, as a pre-condition, be held to be under a corresponding obligation to restore and effectuate its prior undertaking dated 27th November 1987 to maintain unencumbered assets of three billion U.S.Dollars, accepting which the order dated 30th November, 1987 of the District Court Bhopal came to be made. The third event is that subsequent to the recording of the settlement a Constitution Bench of this Court dealt with and disposed of writ-petitions challenging the constitution- ality of the 'Act' on various grounds in what is known as Charanlal Sahu's case and connected matters. The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer implicit in the final disposal of the suits having been impermissible suits were not before the Court so as to be amenable to final disposal by recording a settlement. The settlement is, therefore, without jurisdiction Contention (B): Likewise the pending criminal prosecution was a separate and distinct proceeding unconnected with the suit from the interlocutory order in which the appeals before this Court arose. The criminal proceedings were not under or relata- ble to the 'Act'. The Court had no power to withdraw to itself those criminal proceedings and quash them. The orders of the Court dated 14th and 15th of February 1989, in so far as they pertain to the quashing of criminal proceedings are without jurisdiction. Contention (C): The 'Court-assisted-settlement' was as be- tween, and confined to, the Union of India on the one hand and UCC UCIL on the other. The Original Suit No. 1113 of 1986 was really and in substance a representative suit for pur- poses and within the meaning of Order XXIII Rule 3B C.P.C. inasmuch as any order made therein would affect persons not eo-nomine parties to the suit. Any settlement reached without notice to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the consideration. The consent order has no higher sanctity than the legality and validity of the agreement on which it rests. Contention ( G ): The process of settlement of a mass tort action has its own complexities and that a Fairness-Hearing must precede the approval of any settlement by the court as fair, reasonable and adequate. In concluding that the settlement was just and reasonable the Court omitted to take into account and provide for certain important heads of compensation such as the need for and the costs of medical surveillance of a large section of population, which though asymptomatic for the present was likely to become symptomatic later having regard to the character and the potentiality of the risks of exposure and the likely future damages resulting from long-term effects and to build-in a 're-opener' clause. The settlement is bad for not affording a fairness-hearing and for not incorporating a re-opener clause. The settlement is bad for not indicating appropriate break-down of the amount amongst the various classes of victim- groups. There were no criteria to go by at all to decide the fairness and adequacy of the settlement. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... su- ant to the settlement, is a nullity. It is urged that Arti- cle 139A is exhaustive of the powers of the Court to with- draw suits or other proceedings to itself. It is not disputed that Article 139A in terms does not apply in the acts of the case. The appeals were by special leave under Article 136 of the Constitution against an interlocutory order. If Article 139A exhausts the power of transfer or withdrawal of proceedings, then the contention as substance. But is that so? This Court had occasion to point out that Article 136 is worded in the widest terms possible. It vests in the Supreme Court a plenary jurisdiction in the matter of entertaining and hearing of appeals by granting special save against any kind of judgment or order made by a Court or Tribunal in by cause of matter and the powers can be exercised in spite of the limitations under the specific provisions for appeal contained in the Constitution other laws. The powers given by Article 136 are, however, in the nature special or resid- uary powers which are exercisable outside the purview of the ordinary laws in cases where the needs of justice demand interference the Supreme Court. (See Durga Shankar Mehta v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal disposal? If matters are disposed of by consent of the parties, can any one of them later turn around and say that the apex court's order was a nullity as one without jurisdiction and that the consent does not confer jurisdiction? This is not the way in which jurisdic- tion with such wide constitutional powers is to be con- strued. While it is neither possible nor advisable to enu- merate exhaustively the multitudinous ways ill which such situations may present themselves before the court where the court with the aid of the powers under Article 142 (1) could bring about a finality to the matters, it is common experi- ence that day-in-and-day-out such matters are taken up and decided in this court. It is true that mere practice, howev- er long, will not legitimize issues of jurisdiction. But the argument, pushed to its logical conclusions, would mean that when an interlocutory appeal comes up before this Court by special leave, even with the consent of the parties, the main matter cannot be finally disposed of by this court as such a step would imply an impermissible transfer of the main matter. Such technicalities do not belong to the con- tent and interpretation of consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contention whether such quashing of the proceedings was, in the circum- stances of the case, justified or not we have reached a decision on Contentions IDI and [E]. But on the power of the court to withdraw the proceedings, the contention must fail. We. accordingly, reject both Contentions [At and IB]. Re: Contention (C) 10. Shri Shanti Bhushan contends that the settlement recorded on the 14th and 15th of February, 1989, is void under Order XXIII Rule 3B, Code of Civil Procedure, as the orders affect the interests of persons not eo-nomine parties to the proceedings, and, therefore, the proceedings be- come representative-proceedings for the purpose and within the meaning of Order XXIII Rule 3-B C.P.C. The order record- ing the settlement, not having been preceded by notice to such persons who may appear to the Court to be interested in the suit, would, it is contended, be void. Order XXIII Rule 3-B CPC provides: Order XXIII Rule 3B. No agreement or compromise to be entered in a representative suit without leave of Court. (1) No agreement or compromise in a representative suit shall be entered into without the leave of the Court expressly recorded in the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that section 4 should be so construed in spite of the difficulties of the process of notice and other difficul- ties of making informed decision making process cumbersome , as canvassed by the learned Attorney General '. The Learned Attorney General, however, sought to canvas the view that the victims had notice and some of them had participated in the proceedings. We are, however, unable to accept the position that the victims had notice of the nature contemplated under the Act upon the underlying 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. In the aforesaid view of the matter, in our opinion, notice was necessary. The victims at large did not have the notice. [Emphasis added] 11. We have given our careful consideration to this submission. The question is whether Rule 3-B of Order XXIII, proprio-vigore, is attracted to the proceedings in the suit or whether the general principles of natural justice under- lying the provision apply. If it is the latter, as indeed, the Sahu case has held, the contention in substance is not different from the one based on non-compliance with the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court. Even assuming that the right of the affected persons of being heard is also available at a stage where a settlement is placed before the Court for its ac- ceptance, such a right is not referable to, and does not stem from, Rule 3-B of Order XXIII CPC. The pronouncement in Sahu case as to what the consequences of non-compliance are in conclusive as the law of the case. It is not open to us to say whether such a conclusion is right or wrong. These findings cannot be put aside as mere obiter. Section 112 CPC, biter-alia, says that nothing contained in that Code shall be deemed to affect the powers of the Supreme Court under Article 136 or any other provision of the Constitution or to interfere with any rules made by the Supreme Court. The Supreme Court Rules are framed and pro- mulgated under Article 145 of the ConstitutiOn. Under Order 32 of the Supreme Court Rules, Order XXIII Rule 3-B CPC is not one of the rules expressly invoked and made applicable. In relation to the proceedings and decisions of superior Courts of unlimited jurisdiction, imputation of nullity is not quite appropriate. They decide all questions of their own jurisdiction. In Isaacs v. Robertson,1984 (3) AE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any suits, claims or civil or criminal complaints which may be filed in future against any Corporation, Company or person referred to in this settle- ment are defended by them and disposed of in terms of this order. (b) Any such suits, claims or civil or crimi- nal proceedings filed or to be filed before any court or authority are hereby enjoined and shall not be proceeded with before such court or authority except for dismissal or quashing in terms of this order. The signed memorandum filed by the Union of India and the UCC includes the following statements: 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 entitles with respect to all past, present and 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 representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the decision of that case. Shri Nariman contended that neither in Garg's case nor in the subsequent decision in A.R. Antulay v. R.S. Nayak and Anr.,[1988] 2 S.C.C. 602 where the above observations in Garg's case were approved, any question of inconsistency with the express statutory provisions of substantive law arose and in both the cases the challenge had been on the ground of violation of fundamental rights. Shri Nariman said that the powers under Articles 136 and 142 (1) are overrid- ing constitutional powers and that while it is quite under- standable that the exercise of these powers, however wide, should not violate any other constitutional provision, it would, however, be denying the wide sweep of these constitu- tional powers if their legitimate plentitude is whittled down by statutory provisions. Shri Nariman said that the very constitutional purpose of Article 142 is to empower the Apex Court to do complete justice and that if in that proc- ess the compelling needs of justice in a particular case and provisions of some law are not on speaking terms, it was the constitutional intendment that the needs of justice should prevail over a provision of law. Shri Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Shri Nariman suggested that what this Court did on the invitation of the Union of India as Dominus Litis was a mere procedural departure adopting the expedient of quashing as an alternative to or substitute for withdrawal . There were only procedural and terminolog- ical departures and the Union of India as a party inviting the order could not, according to Shri Nariman, challenge the jurisdiction to make it. Shri Nariman submitted that the State as the Dominus Litis may seek leave to withdraw as long as such a course was not an attempt to interfere with the normal course of justice for illegal reasons. 18. It is necessary to set at rest certain misconceptions in the arguments touching the scope of the powers of this Court under Article 142(1) of the Constitution. These issues are matters of serious public importance. The proposition that a provision in any ordinary law irrespective of the importance of the public policy on which it is founded, operates to limit the powers of the Apex Court under Article 142(1) is unsound and erroneous. In both Garg's as well as Antulay's case the point was one of violation of constitutional provisions and constitutional rights. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but only to what is or is not 'complete justice' of a cause or matter and in the ultimate analysis of the propriety of the exercise of the power. No question of lack of jurisdiction or of nullity can arise. Learned Attorney General said that Section 320 Criminal Procedure Code is exhaustive of the circumstances and conditions under which composition can be effected. [See Sankar Rangavva v. Sankar Ramayya (AIR 1916 Mad. 463 at 485] and that the courts cannot go beyond a test laid down by the Legislature for determining the class of offences that are compoundable and substitute one of their own. Learned Attorney General also referred to the following passage in Biswabahan v. Gopen Chandra [1967] SCR 447 at 451: If a person is charged with an offence, then unless there is some provision for composition of it the law must take its course and the charge enquired into resulting either in conviction or acquittal. He said that if a criminal case is declared to be non- compoundable, then it is against public policy to compound it, and any agreement to that end is wholly void in law. (See ILR 40 Cal.113 at 117-118); and submitted that court cannot make t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here must be grounds to permit a withdrawal of the Prosecution. It is really not so much a question of the existence of the power as one of justification for its exercise. A prosecution is not quashed for no other reason than that the Court has the power to do so. The withdrawal must be justified on grounds and princi- ples recognised as proper and relevent. There is no indica- tion as to the grounds and criteria justifying the withdraw- al of the prosecution. The considerations that guide the exercise of power of withdrawal by Government could be and are many and varied. Government must indicate what those considerations are. This Court in State of Punjab v. Union of India, [1986] 4 SCC 335 said that in the matter of power to withdraw prosecution the broad ends of public justice may well include appropriate social, economic and political purposes . In the present case, no such endeavour was made. Indeed, the stand of the UCC in these review petitions is not specific as to the court to permit a withdrawal. Even the stand of the Union of India has not been consistent. On the question whether Union of India itself invited the order quashing the criminal cases, its subsequents stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overy and inspection of the UCC's plant in the United States for purposes of comparison of the safety standards. The inspection was to be conducted during the middle of February. 1989. The settlement, which took place on The 14th of February, 1989, it is alleged, was intended to circumvent that inspection we have gone through the correspondence on the point. The documents relied upon do not support such an allegation. That apart, we must confess our inability to appreciate this suggestion coming as it does from the Government of India which was a party to the settlement. However, on Contention (D) we hold that the quashing and termination of the criminal proceedings brought about by the orders dated 14th and 15th February, 1989 require to be, and are, hereby reviewed and set aside,. Re: Contention (E) 22. The written memorandum setting out the terms of the settlement filed by the Union of India and the U.C.C. con- tains certain terms which are susceptible of being construed as conferring a general future immunity from prosecution. The order dated 15th February, 1989 provides in clause 3[a] and 3[b]: ....that any suits, claims or civil or crimi- nal complaints w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alone, is incompetent to declare it. It is the assumption of a power to annul as to individu- als or classes the statutory law of crimes, to stem the course of justice, to absolve the grand jurors of the county from the perform- ance of their duties, and the prosecuting officer from his. All these changes may be wrought through the enactment of a statute. They may be wrought in no other way while the legislative structure of our government con- tinues what it is . In the same case the opinion of Associate Judge Pound who dissented in part on another point, but who entirely shared the view expressed by Chief Justice Cardozo may also be cited: The grant of Immunity is a legislative function. The Governor may pardon after conviction [NY Const. Art. 4 51, but he may not grant immunity from criminal prosecution or may the courts. Amnesty is the determination of the legislative power that the public welfare requires the witness to speak? [P. 1433] Learned Attorney General referred us to the following passage in Jurisprudence by Wortley: Again, if we say that X has an immunity from arrest when a sitting member of the House of Commons, then during its subsistence he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, belonging to the executive department, which are necessarily implied from the nature of the functions, which are confided to it. Among these, must necessarily be included the power to perform them .... The president cannot, therefore, be liable to arrest, imprisonment, or detention, while he is in the discharge of the duties of his office; and for this purpose his person must be deemed, in civil cases at least, to possess an official inviolability . [P-363] 23. Indeed, the submissions of learned Attorney General on the theoretical foundations as to the source of immunity as being essentially legislative may be sound. But the question does not strictly arise in that sense in the present case. The direction that future criminal proceedings shall not be instituted or proceeded with must be understood as a concomitant and a logical consequence of the decision to withdraw the pending prosecutions. In that context, the stipulation that no future prosecutions shall be entertained may not amount to conferment of any immunity but only to a reiteration of the consequences of such termination of pending prosecutions. Thus understood any appeal to the principle as to the power to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The invalidity urged is one based on publicpolicy. We think that having regard to the nature of plea --- one of nullity no preclusive effect of the earlier consent should come in the way of the Union of India from raising the plea. Illegalities, it is said, are incurable. This position is fairly well established. In re A Bankruptcy Notice (1924 2 Ch.D. 76 at 97) Atkin L.J. said: It is well established that it is impossible in law for a person to allege any kind of principle which precludes him from alleging the invalidity of that which the statute has, on grounds of general public policy, enacted shall be in- valid. In Maritime Electirc Co. Ltd. v. General Daines Ltd. AIR 1937 PC 114 at 116-117 a similar view finds expression: .......... an estoppel is only a rule of evidence which under certain special circumstances can be invoked by a party to an action; it cannot therefore avail in such a case to release the plaintiff from an obligation to obey such a statute, nor can it enable the defendant to escape from statutory obligation of such a kind on his part. It is immaterial whether the obligation is onerous or otherwise to the party suing. The duty of each party is to ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d completed, and acted upon to the extent that the property has been sold and the money has been paid into the hands of the receiver, I may now set aside tile order and arrangement upon any ground which would justify me in setting aside an agreement entered into between the parties. The real truth of the matter is that the order is a mere creature of the agreement, and to say that the Court can set aside the agreement -- and it was not disputed that this could be done if' a common mistake were proved -- but that it cannot set aside an order which was the creature of that agreement, seems to me to be giving the branch an existence which is independent of the tree. [emphasis added] This was affirmed in appeal by Lindley LJ. in the following words: the appellants, contend that there is no jurisdiction to set aside the consent order upon such materials as we have to deal with; and they go so far as to say that a consent order can only be set aside on the ground of fraud. 1 dissent from that proposition en- tirely. A consent order, I agree, is an order; and so long as it stands I think it is as good an estoppel as any other order. I have not the slightest doubt on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the dropping of criminal charges and undertaking to abstain from bringing criminal charges in future were part of the consideration for the offer of 470 million US dollars by the UCC and as the of- fences involved in the charges were of public nature and non-compoundable, the consideration for the agreement was stifling of prosecution and, therefore, unlawful. It is a settled proposition and of general application that where the criminal charges are matters of public concern there can be no diversion of the course of public justice and cannot be the subject matters of private bargain and compromise. 31. Shri Nariman urged that there were certain funda- mental misconceptions about the scope of this doctrine of stifling of prosecution in the arguments of the petitioners. He submitted that the true principle was that while non- compoundable offences which are matter of public concern cannot be subject-matter of private bargains and that admin- istration of criminal justice should not be allowed to pass from the hands of Judges to private individuals, the doc- trine is not attracted where side by side with criminal - liability there was a pre-existing civil liability that was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdraw a prosecution for per- jury, and consent to give no evidence against the accused, is founded on an unlawful consid- eration and void. On the soundness of this decision no doubt can be entertained, whether the party accused were innocent or guilty of the crime charged. If innocent, the law was abused for the purpose of extortion; if guilty the law was eluded by a corrupt compromise, screening the criminal for a bribe. But, if the offence is of a public nature, no agreement can be valid that is founded on the consideration of stifling a prosecution for it. In the present instance, the offence is not confined to personal injury, but is accompa- nied with riot and obstruction of a public officer in the execution of his duty. These are matters of public concern, and therefore not legally the subject of a compromise. The approbation of the Judge (whether neces- sary or not) may properly be asked on all occasions where an indictment is compromised on the trial; plainly it cannot make that legal which the law condemns. This was affirmed in appeal by Tindal C.J. who said (p.393): It seems clear, from the various authorities brought before us on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary to prove that there was an agreement between the parties express or implied, the consideration for which was to take the administration of law out of the hands of the Judges and put it into the hands of a private individual to determine what is to be done hi particular case and that the contracting parties should enter into a bar- gain to that effect . [emphasis added] Narasimha Raju (supra) this Court said . [p. 693] The principle underlying this provision is obvious. Once the machinery Of the Criminal Law is set into motion on the allegation that a non-compoundablc offence has been committed, it is for the criminal courts and criminal courts alone to deal with that allegation and to decide whether the offence alleged has in fact been committed or not. The decision of this question cannot either directly or indirectly be taken out of the hands of criminal courts and dealt with by, private individuals. [Emphasis added] This was what was reiterated in Ouseph Poulo Ors. v. Catholic Union Bank Ltd. Ors. [1964] 7 SCR 745: With regard to non-compoundable offence, however, the position is clear that no court to law can allow a private party to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added). These are not the features of the present case. 36. More importantly, the distinction between the motive for entering into agreement and the consideration for the agreement must be kept clearly distinguished. Where dropping of the criminal proceedings is a motive for enter- ing into the agreement --and not its consideration--the doctrine of stifling of prosecution is not attracted. Where there is also a pre-existing civil liability, the dropping of criminal proceedings need not necessarily be a consideration for the agreement to satisfy that liability. In Adhikanda Sahu Ors. v. Jogi Sahu Ors. AIR 1922 Patna 502, this distinc- tion is pointed out: The distinction between the motive for coming to an agreement and the actual consideration for the agreement must be kept carefully in view and this care must be particularly exer- cised in a case where there is a civil liabil- ity already existing, which is discharged or remitted by the Agreement . [P. 503] In Deb Kumar Ray Choudhury V. Anath Bandhu Sen and Ors. AIR 1931 Cal. 421. it was mentioned: A contract for payment of money in respect of which a criminal prosecution was permissible under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof as consid- eration for stifling of the prosecution. In the context of the Union of India the'plea lacks as much in reality as in a sense of proportion. 38. Accordingly on Contention (F) we hold that the settlement is not hit by Section 23 or 24 of the Indian Contract Act and that no part of the consideration for payment of 470 million US dollars was unlawful. Re: Contention (G) 39. This concerns the ground that a Fairness- Hearing , as understood in the American procedure is manda- tory before a mass- tort action is settled and the settle- ment in the present case is bad as no such procedure had preceded it. It is also urged that the quantum settled for is hopelessly inadequate as the settlement has not envisaged and provided for many heads of compensation such as the future medical surveillance costs of a large section of the exposed population which is put at risk; and that Ihc toxic tort actions where the latency-period for the manifestation of the effects of the exposure is unpredictable it is neces- sary to have a re-opener clause as in the very nature of toxic injuries the latency period for the manifestation of effects is unpredictable and any structured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ICMR said: How long will they (i.e. the respiratory, ocular and other morbidities) last '? What permanent diabilities can be caused? What is the outlook for these victims ? What of their off-spring? Shri Nariman referred to the following passage in the introduction to the Working Manual 1 on Health Problems of Bhopal (;as Victims April, 1986, ICMR; Based on clinical experience gained so far, it is believed that many of them (i.e. vic- tims) would require specialised medicare for several years since MIC is an extremely reac- tive substance , the possibility of the exposed population developing hitherto unsuspected complications in the future cannot be overlooked. What is, however, implicit in this stand of the UCC is the admission that exposure to MIC has such grim implica- tions for the future; but UCC urges that the Union of India must be deemed to have put all these into the scales at the time it settled the claim for 470 million US dollars. UCC also suggests that with the passage of time all such prob- lems of the future must have already unfolded themselves and that going by the statistics of medical evaluation of the affected persons done by the Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diagnosis and treatment of disease caused by plaintiffs' exposure to toxic chemicals ..... . ....The future expense of medical monitoring, could be a recoverable consequential damage provided that plaintiffs can establish with a reasonable degree of medical certainty that such expenditures are reasonably anticipated to be incurred by reason of their exposure. There is no doubt that such a remedy would permit the early detection and treatment of maladies and that as a matter of public policy the tort-feasor should bear its cost. Compensation for reasonable and necessary medical expenses is consistent with well- accepted legal principles. It is also consist- ent with the important public health interest in fostering access to medical testing for individuals whose exposure to toxic chemicals creates an enhanced risk of disease. The value of early diagnosis and treatment for cancer patients is welldocumented. Although some individuals exposed to hazard- ous chemicals may seek regular medical sur- veillance whether or not the cost is reim- bursed, the lack of reimbursement will un- doubtedly deter others from doing so. An application of tort law that allows post- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a particular defendant It is not the reasonable probability' that the persons put at risk will actually suffer toxic injury in future that determines whether the medical surveillance is necessary. But what determines it is whether, on the basis of medical opinion, a person who has been exposed to a toxic substance known to cause long time serious injury should undergo periodical medical tests in order to look for timely warning signs of the on-set of the feared consequences. These costs constitute a relevant and admissible head of compensation and may have to be borne in mind in forming an opinion whether a proposed settlement -- even as a settlement -- is just, fair and adequate. 43. Sri Nariman, however, urged that the only form of compensation known to the common law is a lumpsum award -- a once and for all determination of compensation for all plaintiffs' losses, past, present and future -- and that split-trials for quantification of compensation taking into account future aggravation of injuries, except statutorily enabled, are unknown to common law. Indeed, that this is the position in common law cannot be disputed. In an action for negligence, damages mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard, have not been kept in mind and, therefore, the approval accorded to the settlement is on an incomplete criteria. But UCC would say that Union of India was aware of the possibility of such future manifestations of the effects of the exposure and must be deemed to have kept all those in mind at the time of settlement. 44. But the point to emphasise is that those who were not parties to the process of settlement are assailing the settlement on these grounds. In personal injury actions the possibility of the future aggravation of the condition and of consequent aggravation of damages are taken into account in the assessment of damages. The estimate of damages in that sense is a very delicate exercise requiring evaluation of many criteria some of which may border on the impondera- ble. Generally speaking actions for damages are limited by the general doctrine of remoteness and mitigation of dam- ages. But the hazards of assessment of once and for all damages in personal injury actions lie in many yet inchoate factors requiring to be assessed. It is in this context we must look at the 'very proper refusal of the courts to sacrifice physically injured plaintiffs on the alter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed members of the class would be virtually impossible in any large class suit. The costs of ensuring that each member of the class in this case fully understood the issue bearing on settlement and then voted on it would be prohibitive and the enterprise quixotic. Even though hundreds of members of the class were heard from, there was an overwhelminglv large silent majority. In the final analysis there was and can be no consent in any meaningful sense. [Emphasis added] Learned Judge also referred to the nine relevant factors: (1) The complexity expense and likely duration of the litigation, (2) The reaction of the class of the settlement, (3) The stage of the proceedings and the amount of discovery completed, (4) The risks of establishing liability, (5) The risks of establishing damages (6) The risks of maintaining the class action through the trial, (7) The ability of the defendants to withstand a greater judgement, (8) The range of reasonableness of the settlement fund in the light of the best possible recovery and, (9) the range of reasonableness of the settlement fund to a possible recovery in the light of all the attendant risks of litigation. But the limits were also indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of course, relevant factors for evaluation. But the very uncertainties of outcome in litigation, as well as the avoidance of wasteful litigation and expense, lay behind the Congressional infusion of a power to compromise. This is a recognition of the policy of the law generally to encourage settlements. This could hardly be achieved if the test on hearing for approval meant establishing success or failure to a certainty. Parties would be hesitant to ex- plore the likelihood of settlement apprehen- sive as they would then be that the applica- tion for approval would necessarily result in a judicial determination that there was no escape from liability or no hope of recovery and (thus) no basis for a compromise. Sri Nariman also pointed out that In Agent Orange settlement only a small fraction of one percent of the class Came forward at the fairness hearings; that there was no medical evidence nor a mini-trial about the factual aspects of the case and that in the end: the silent majority re- mains inscrutable . It is pointed out that in United Kingdom a different variant or substitute of fairness hearing ob- tains. Order 15 Rule 13, Rules of Supreme Court makes provision for or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in the suit and to realise the order for interim-payment. The stand of the Union of India as recorded in the proceedings dated 10.4.1990 is as follows: 1. It is submitted that the Union of India consistent with its duty as parens patriae to the victims cannot consent to the taking away by Carbide of the moneys which are in India outside the jurisdiction of Indian Courts. 2. At this stage, the Union of India is not claiming unilaterally to appropriate the moneys, nor to disburse or distribute the same. The moneys can continue to be deposited in the Bank as at present and earn interest subject to such orders that may be passed in appropriate proceedings by courts. 3. It is submitted that in view of the facts and circumstances of the case, the previous history of the litigation, the orders passed by the district court Bhopal, Madhya Pradesh High Court and this Hon'ble Court, and the undertakings given by UCIL and Carbide to Courts in respect of their assets, this Hon'- ble Court may, in order to do complete justice under Article 142 of the constitution, require retention of the moneys for such period as it may deem fit, in order to satisfy any decree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case, Section 144 CPC does not in terms apply. There is always an inherent jurisdiction to order restitution a fortiorari where a party has acted on the faith of an order of the court. A litigant should not go back with the impression that the judicial-process so oper- ated as to weaken his position and whatever it did on the faith of the court's order operated to its disadvantage. It is the duty of the court to ensure that no litigant goes back with a feeling that he was prejudiced by an act which he did on the faith of the court's order. Both on principle and authority it becomes the duty of the court to -- as much moral as it is legal -- to order refund and restitution of the amount to the UCC-- if the settlement is set aside. In Binayak v. Ramesh, [1966] 3 SCR 24 this Court dealing with scope of Section 144 CPC observed: . ......... The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received)the benefit of the erroneous decree to make restitution to the other party for what he has lost. This obligation arises automatically on the rever- sal or modification o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereon. So far as the point raised by the learned Attorney-General as to the corporate changes of the UCC is concerned, we think, a direction to the UCC to prove and establish compli- ance with the District Court's order dated 30the November, 1986, should be sufficient safeguard and should meet the ends of justice. 53 Accordingly, in the event of the settlement being set aside the UCC shall be entitled to have 420 million US Dollars brought in by it remitted to it by the Union of India at the United States along with such interest as has accrued on it in the account. But this right to have the restitution shall be strictly subject to the condition that the UCC shall restore its undertaking dated 27.11.1986 which was recorded on 30.11.1986 by District Court at Bhopal and on the strength of which the court vacated the order of injunction earlier granted against the UCC. Pursuant to the order recording the Settlement, the said order dated 30.11.1986 of the District Court was set-aside by this Court. If the settlement goes, the order dated 30.11.1986 of the District Court will auto- matically stand restored and the UCC would be required to comply with that order to keep and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tunity, contemplated by sec. 4 of the Act meaningful and effective, it should be so read that the victims have to be given an opportunity of the making their representation before the court comes to any, conclusion in respect of any settlement. In our opinion, the constitutional require- ments, the language of the section, the pur- pose 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 pro- posed or contemplated settlement, notice should be given to the victims who ace affect- ed or whose rights are to be affected to ascertain their views. Section 4 is signif- icant. It enjoins the Central Government only to have due regard to any matters which such person may require to be urged. So the obliga- tion is on the Central Govt. in the situation contemplated by Sec. 4 to have due regard to the views of the victims and that obligation cannot be discharged by the Central Government 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 view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge consequences follow one way or the other to put as under what others have put together. It is well to remem- ber, as old Justice Holmes, that time has upset many fighting faiths and one must always wager one's salvation upon some prophecy based upon imperfect knowledge. Our knowledge changes; our perception of truth also changes ........ 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 psychological 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 deci- sion affecting their right. Yet, in the par- ticular situations, one has to bear in mind how an infraction of that should be sought to be removed in 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. do a great right after all, it is permissible sometimes to do a little wrong . In the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emit the maintenance of constitutional right to judicial discretion is to shift the foundation of freedom from the rock to the sand . But the effects and consequences of non-compliance may alter with situational variations and particularities, illustrating a flexible use of discretionary remedies to meet novel legal situations . One motive says Prof. Wade for holding administrative acts to be voidable where ac- cording to principle they are void may be a desire to extend the discretionary powers of the Court . As observed by Lord Reid in Wiseman v. Borneman [1971 AC 297] natural justice should not degenerate into a set of hard and fast rules. There should be a circumstantial flexibility. In Sahu case this Court held that there was no compli- ance with the principles of natural justice but also held that the result of the non-compliance should not be a me- chanical invalidation. The Court suggested curatives. The Court was not only sitting in judicial review of legisla- tion; but was a court of construction also, for, it is upon proper construction of the provisions, questions of consti- tutionality come to be decided. The Court was considering the scope and content of the oblig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;of his right of appeal when a valid decision to expel him is subsequently made. Such a deprivation would be a powerful result to be achieved by what in law is a mere nullity; and it is no mere triviality that might be justified on the ground that natural justice does not mean perfect justice. As a general rule, at all events, I hold that a failure of natural justice in the trial body cannot be cured by a sufficiency of natural justice in an appellate body. Prof. Wade in his treatise on Administrative Law observes: If natural justice is violated at the first stage, the right of appeal is not so much a true right of mreduced to unfair trial followed by fair trial. We might recall here that the Privy Council in Calvin v. Carr [1980] AC 576 had expressed its reservations about Megarry J's 'General Rule' in Learv's case. However, the reservations were in the area of domestic jurisdiction, where contractual or Conventional Rules operate. The case did not involve a public law situation. But the House of Lords in Llyod v. Memahan [1987] AC 625 applied the princi- ple to a clearly public law situation. The principle in Leary's might, perhaps, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show that, from time to time, largely circulated newspapers in the country carried detailed news reports of the settlement and of the subse- quent legal proceedings questioning them. Shri Nariman's contention is that in view of this wide publicity the major- ity of the affected persons must be presumed to have had notice, though not in a formal way and to have accepted the settlement as they had not bestirred themselves to move the Court. 58. Shri Nariman also raised what he urged were basic objection as to the scope of the review jurisdiction and to the enlargement of the scope of the review hearings to anything resembling a Fairness Hearing by treating the concluded settlement as a mere proposal to settle. Shri Nariman said that the Court could either review the orders dated 14th and 15th February, 1989 if legal grounds for such review under law were strictly made out or dismiss the review petitions if petitioners fail to make out a case in accordance with the accepted principles regulating the review jurisdiction; but the court could not adopt an in- termediate course by treating the settlement as a proposed or provisional settlement and seek now to do what the Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, the remedy of an affected person and the powers of the Court to grant it are well-settled. For instance, in Shivdeo Singh Ors. v. State of Punjab Ors. AIR 1963 SC 1909 on a writ petition filed under Article 226 of the Constitution by A for cancellation of the order of allotment passed by the Director of Rehabilitation in favour of B, the High Court made an order cancelling the allotment though 'B' was not a party. Later, B filed a writ petition under Arti- cle 226 for impleading him as a party and for re-hearing the whole matter. The High Court granted it. Before this Court, the objection was this: 'Learned counsel contends that Art. 226 of the Constitution does not confer any power on the High Court to review its own order and, there- fore, the second order of Khosla, J, was without jurisdiction. This Court rejected the contention observing that: It is sufficient to say that there is nothing in Art. 226 of the Constitution to preclude a High Court from exercising the power of review which inheres in every court of plenary juris- diction to prevent miscarriage of justice or to correct grave and palpable errors committed by it. Here the previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpensation and the order we propose to pass with regard to point J, the grievance of the petitioners on the present contention would not, in our opinion really survive. Contention (1) is answered accordingly. Re: Point (J) 61. Before we go into the question whether the settle- ment should be set aside on grounds of inadequacy of the settlement fund, certain subsidiary contentions and argu- ments may be noticed. They deal with (i) that there has been an exclusion of a large number of claims on the ground that despite service of notices they did not respond and appear for medical documentation and (ii) that the whole exercise of medical documentation is faulty and is designed and tends to exclude genuine victims. These contentions are really not directly germane to the question of the validity of the settlement. However, they were put forward to discredit the statistics emerging from the medical documentation done by the Directorate of Claims on which the UCC sought to rely. We may as well deal with these two contentions. 62. The first contention is that the claims of a large number of persons who had filed their claims are not regis- tered on the ground that they did not re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that a claim made under paragraph 4 does not fall in any of the categories speci- fied in sub-paragraph (2) he may refuse to register the claim: Provided that before so refusing he shall give a reasonable opportunity for a personal hear- ing to the claimant. (5) If the claimant is not satisfied with the order of the Deputy Commissioner under sub- paragraph (3) or sub-paragraph (4) he may prefer an appeal against such order to the Commissioner, who shall decide the same. The stage at which medical examination was required related presumably to the exercise under sub-paragraph (3) of Para 5 of the Scheme. Failure of a claimant to respond to the notice and offer himself for medical examination would entail a refusal to register the claim. It is manifest that such a refusal is apealable under the scheme. But this grievance does not survive in view of the stand taken by the Government in these proceedings. In the affidavit of Sri Ramesh Yashwant Durve, dated 5th December, 1989 in W.P. No. 843/88, it is stated:- That all claimants who did not respond to the first notice were given a second and then a third notice to appear at one of the medical do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record at the time of medical examina- tion. Documents of post-exponsure medical record are accepted even after the medical documentation of the claimant is over. It is incorrect to say that the documents for post-exposure period are just not available. Had it been so, 55% of the claimants who fail in category 'B' to 'CF' would also have been categorised as 'A'. In this connection it may be clarified that even in post-exposure period prescrip- tions were issued. Besides this, private practitioners were also issuing prescriptions in printed form. It is therefore incorrect to say that there is dearth of documentation. However, bearing this point in mind, a very liberal approach in admitting documents was adopted as will be clear from the guidelines for evaluation. It will also be relevant here to state that the claimants are being helped to get the benefit of any medical records available in any hospital or dispensary. Institutions like ICMR, COM (Gas Relief), Jawahar Lal Nehru Hospital, Bhopal Eye Hospi- tal, Indian Red Cross Society, BHEL Hospital and the Railway Hospital have treated numerous gas victims during the post-exposure period. The relevant medical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... geon, who does the evaluation can him self do the categorisation also. Post graduate specialists have been engaged for this work because the total medical folder has to be assessed keeping the evaluation sheet as a basic indicator. In doing the categorisa- tion, the postgraduate specialist takes into account symptoms reported, clinical findings, specialist's opinions and investigation re- ports. The Additional Director accordingly assests: ...it will be meaningless to suggest that the Govt. is jeopardising the interests of the claimants by deliberately distorting the Medical Documentation Exercise. Similarly, it will be absurd to suggest that the Govt. is trying to help UCC in any way. The Additional Director also refers to the attempts by unscrupulous persons to exploit the situation in pursuit of unjust gains and how the authorities had to encounter at- tempts of impersonation and attempts by claimants to pass of other's urine as their own. It was said that there were urine-donors. The affidavit also discloses certain real practices involving medical prescriptions and certificates by some members of the medical profession and ante-dated urine-thiocynate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event the settlement- fund will be insufficient to satisfy all the Awards. This is the main concern of the victims and victim-groups. There is, as it now stands, a fund of one thousand two hundred crores of rupees for the benefit of the victims. The main attack on its adequacy rests solely on the possibility that the medical documenta- tion and categorisation based thereon, of the victims' medical status done by the Directorate of Claims is faulty. The charge that medical documentation was faulty and was calculated to play down the iII-effects of the exposure to MIC is, in our opinion, not substantiated. This attack itself implies that if the categorisation of the claimants on the basis of the severity of the injuries is correct then the settlement-fund may not, as a settlement, be unreasona- ble. 66. At the same time, it is necessary to remind our- selves that in bestowing a second thought whether the set- tlement is just, fair and adequate. We should not proceed on the premise that the liability of the UCC has been firmly established. It is yet to be decided if the matter goes to trial. Indeed, UCC has seriously contested the basis of its alleged liability. But it is true ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the side of requiring scientif- ic testimony only to measure up to legal standards of evidence, the social forces include plaintiffs or potential plaintiffs, plaintiffs' attorneys, public interest groups, consumer advocacy groups, all individuals who are concerned to make it somewhat easier to recover damages under personal injury law for alleged injuries suffered as a consequence of activities of others. On the other side of the same issue are defendants, potential defendants (typically corporations, manufacturing firms) and, interestingly, the scientific community. [Page 118] In Sterling v. Velsicol Chemical Corp. (855 F 2d 1188 (1988)) the US Court of Appeals tended to the view that generalised proof of damages is not sufficient to prove individual damages and that damages in mass tort personal injury cases must be proved individually by each individual plaintiff. The Court held: We cannot emphasise this point strongly enough because generalised proof will not suffice to prove individual damages. The main problem on review stems from a failure to differentiate between the general and the particular. This is an understandably easy trap to fall into in mass tort lit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount of damages with certainty, it would be a perver- sion of fundamental principles of justice to deny all relief to the injured person, and thereby relieve the wrongdoer from making any amend for his acts. In such case, while the damages may not be determined by mere specula- tion or guess, it will be enough if the evidence show the extent of the damages as a matter of just and reasonable inference, although the result be only approximate. The wrongdoer is not entitled to complain that they cannot be measured with the exactness and precision that would be possible if the case, which he alone is responsible for making,were otherwise.' And in Frederick Thomas Kingsley v. The Secretary of State for India, (AIR 1923 Calcutta 49), it was observed: Shall the injured party be allowed to recover no damages (or merely nominal) because he cannot show the exact amount of the certainty, though he is ready to show, to the satisfac- tion of the Jury, that he has suffered large damages by the injury ? Certainty, it is true, would be thus attained, but it would be the certainty of injustice. Juries are allowed to act upon probable and inferential, as well as direct and positive p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal changes in law. 70. With the passage of time there are more tangible details available by way of the proceedings of the Director- ate of Claims which has medically evaluated and categorised nearly 3,60,000 affected persons. We have looked into the formats and folders prepared by the Directorate of Claims for the medical evaluation of the conditions of the victims. Some sample medical dossiers pertaining to some individual claimants containing an evaluation of the data pertaining to the medical status of the persons have also been shown to us. It is on the basis of such medical dossiers that evalua- tion and categorisation are stated to have been done. The guidelines for carrying out these medical evaluations, it is stated, have been formulated and issued by the Government of India. 71. Petitioners seriously assail the correctness of the guidelines for medical evaluation as also the result of the actual operational processes of evaluation based thereon. Petitioners described the results indicated by the medical categorisation done by the Directorate of Claims which showed only 40 cases of total permanent disablement as shocking and wholly unrelated to the realities. Indeed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et aside or modified pursuant to the other findings---undisturbed. 74. We may here refer to and set at rest one other contention which had loomed in the hearings. The petitioners had urged that the principles of the liability and the standards of assessment of damages in a toxic mass tort arising out of a hazardous enterprise should be not only on the basis of absolute liability-not merely on Rylands v. Fletcher principle of strict liability--not admitting of any exceptions but also that the size of the award be propor- tional to the economic superiority of the offender, contain- ing a deterrent and punitive element. Sustenance was sought from M.C. Mehta v. Union of India, AIR 1987 SC 1086. This argument in relation to a proceeding assailing a settlement is to be understood as imputing an infirmity to the settle- ment process as not being informed by the correct principle of assessment of damages. Respondents, however, raised several contentions as to the soundness of the Mehta princi- ple and its applicability. It was also urged that Mehta principle, even to the extent it goes, does not solve the issues of liability of the UCC as distinct from that of UCIL as Mehta case only sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and research of MIC related afflictions and for medical surveillance of the exposed population. 76. We hold that the capital outlays on the hospital and its operation expenses for providing free treatment and services to the victims should, both on humanitarian consid- erations and in fulfilment of the offer made before the Bhopal court, be borne by the UCC and UCIL. We are conscious that it is not part of the function of this Court to re- shape the settlement or restructure its terms. This aspect of the further liability is also not a matter on which the UCC and the UCIL had an opportunity to express their views. However, from the tenor of the written submissions made before the District Court at Bhopal in response to the proposal of the Court for reconciliatory substantial inter- im relief to the gas victims, both the UCC and UCIL had offered to fund and provide a hospital for the' gas victims. The UCC had re-called that in January, 1986, it had offered to fund the construction of hospital for the treatment of gas victims the amount being contributed by the UCC and the UCIL in equal proportions . Shri Nariman had also referred to this offer during the submissions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he possible claimants fall into two categories: those who were in existence at the time of exposure; and those who were yet unborn and whose congenital defects are traceable to MIC toxicity inherited or derived congenitally. In so far as the second class of cases is concerned, some aspects have been dealt with in the report of the Law Commission in United Kingdom on Injuries to Unborn Chil- dren . The Commission, referring to the thenexisting Law, said: 7. Claims for damages for pre-natal injuries have been made in many other jurisdictions but there is no English or Scottish authority as to whether a claim would lie and, if it did, what rules and limitations should govern it. In our working paper we did not attempt to forecast how such a claim would be decided if it came before a court in this country, al- though we did add, as an appendix to the paper, a brief account of some of the deci- sions of courts in other jurisdictions... 8. It is, however, important from our point of view to express our opinion (reinforced by our general consultation and supported by the report of the Scottish Law Commission) that it is highly probable that the common law would, in appropriate circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditiously and the adjudicative proc- ess must commence within four months from today. In the first instance, there shall at least be 40 Claim Commission- ers with necessary secretarial assistance to start the adjudication of the claims under the Scheme. 79. In the matter of disbursement of the amounts so adjudicated and determined it will be proper for the author- ities administering the funds to ensure that the compensa- tion-amounts, wherever the beneficiaries are illiterate and are susceptible to exploitation, are properly invested for the benefit of the beneficiaries so that while they receive the income therefrom they do not, owing to their illiteracy and ignorance, deprive themselves of what may turn out to be the sole source of their living and sustenance for the future. We may usefully refer to the guide-lines laid down in the case of Muljibhai Ajarambhai Harijan Anr. v. United India Insurance Co. Ltd. Ors., 1982 (1) Gujarat Law Report- er 756. We approve and endorse the guidelines formulated by the Gujarat High Court. Those guidelines, with appropriate modifications, could usefully be adopted. We may briefly recapitulate those guidelines: (i) The Claims Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the various contentions: (i) The contention that the Apex Court had no jurisdiction to withdraw to itself the origi- nal suits pending in the District Court at Bhopal and dispose of the same in terms of the settlement and the further contention that, similarly, the Court had no jurisdiction to withdraw the criminal proceedings are reject- ed. It is held that under Article 142(1) of the Constitution, the Court had the necessary jurisdiction and power to do so. Accordingly, contentions (A) and (B) are held and answered against the petitioners. (ii) The contention that the settlement is void for non-compliance with the requirements of Order XXIII Rule 3B, CPC is rejected. Contention (C) is held and answered against the petitioners. (iii) The contention that the Court had no jurisdiction to quash the criminal proceedings in exercise of power under Article 142(1) is rejected. But, in the particular facts and circumstances, it is held that the quashing of the criminal proceedings was not justified. The criminal proceedings are, accordingly, directed to be proceeded with. Contention (D) is answered accordingly. (iv) The orders dated 14th 15th of February, 1989 in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medical surveillance of the population of the Bhopal exposed to MIC should be provided by periodical medical check-up. For this purpose a hospital with at least 500 beds strength, with the best of equipment and facilities should be established. The facilities shall be provided free of cost to the victims at least for a period of 8 years from now. The state Government shall provide suitable land free of cost. (d) In respect of the population of the affected wards, [excluding those who have filed claims], Government of India shall take out an appropriate medical group insurance cover from the Life Insurance Corporation of India or the General Insurance Corporation of India for compensation to those who, though presently asymtomatic and filed no claims for compensation, might become symptomatic in future and to those later-born children who might manifest congenital or prenatal MIC related afflictions. There shall be no upper individual monetary limit for the insurance liability. The period of insurance shall be for a period of eight years in future. The number of persons to be covered by this group shall be about one lakh persons. The premia shall be paid out of the settlement fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the Bhopal Gas Leak Disaster (Processing of Claims) Act,. 1985 (herein after called 'the Act'). In that case although the question re- ferred to the Bench was in regard to the constitutional validity of the said enactment, submissions were made on the question whether the impugned settlement was liable to be set aside on the ground that it was in flagrant violation of the principles of natural justice, in that, the victims as well as the victim-groups had no opportunity to examine the terms of the settlement and express their views thereon. Mukharji, CJ. who spoke for the majority (Ranganathan, J. and myself expressing separately) observed that on the materials available 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 . It was felt that though the settlement without notice to the victims was not quite proper, justice had in fact been done to the victims but did not appear to have been done. Taking the view that in enter- ing upon the settlement regard should have been had to the views of the victims and for that purpose notices should have been issued before arriving at the settlement, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iolated quite apart from the prac- tical complications that may' arise as a 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 extent permissible in law in the review petition pending before this Court. It is, therefore, manifest from the above that the Sahu Bench was 'prima facie' of the view that the settlement was not liable to be set aside on the ground that the principles of natural justice had been violated. Mukharji, CJ. went on to say that no useful pur- pose would be served by a post-decisional hearing and that the settlement was quite reasonable and fair. Of course K.N. Singh, J. did not express any opinion on the inadequacy of the settlement amount but he was otherwise in agreement with the view expressed by Mukharji, CJ. on all the other points. The view of Ranganathan, J. and myself is evident from the passage extracted above. This case has gone through several twists and turns. One of the world's worst disaster occurred on the night between 2nd and 3rd December, 1984 choking several tO death and injuring thousands of residents living near about the indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... review of the settlement were unaware of the proceedings. Mr. Nariman has placed on record a number of press-clippings to make good his point that news- papers having large circulation throughout the country carried news regarding the settlement and subsequent at- tempts to challenge the same. Can it then be said that the victims were unaware of the proceedings before this Court ? To say so would be to ignore the obvious. In view of the observations in Sahu's case, the scope of the inquiry in the present petitions can be said to be. a narrow one. One way of approaching the problem is to ask what the Court could have done if a pre-decisional hearing was afforded to the victims. The option obviously would have been either to approve the terms of the compromise, or to refuse to super add the Court's seal to the settlement and leave the parties to go to trial. The Court could not have altered, varied or modified the terms of the settlement without the express consent of the contracting parties. If it were to find the compensation amount payable under the settlement inadequate, the only option left to it would have been to refuse to approve the settlement and turn it into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its duty as a welfare State. To my mind, therefore, it is impermissi- ble in law to impose the burden of making'good the shortfall on the Union of India and thereby saddle the Indian tax- payer with the tortfeasor's liability, if at all. If I had come to the conclusion that the settlement-fund was inade- quate, I would have done the only logical thing of reviewing the settlement and would have Left the parties to work out a fresh settlement or go to trial in the pending suit. In Sailit's case as pointed out by Mukharji, CJ. the victims had not been able to show any material which would vitiate the settlement. The voluminous documentary evidence-placed on the record of the present proceedings also does not make out a case of inadequacy of the amount, necessitating a review of the settlement. In the circumstances I do not think that the Union of India can be saddled with the li- ability to make good the deficit, if any, particularly when it is not found to be a tortfeasor. It's liability as a tortfeasor, if at all, would have to be gone into in a separate proceeding and not in the present petitions. These, in brief, are my reasons for my inability to agree with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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