Bhopal gas leak tragedy case

 

BHOPAL GAS LEAK TRAGEDY CASE

UNION CARBIDE CORPORATION –VS- UNION OF INDIA

[(1989 1 SCC 674]

ABSTRACT

Bhopal gas leak tragedy is an infamous incident that took place in Madhya Pradesh whereby a multi-national cooperation (MNC) named Union Carbide Corporation (UCC) through its sister concern used to function in India. It used a dangerous and toxic gas called the Methyl Isocyanate (MIC) which was put in storage tank. But it escaped from there on a chilling night of December 2, 1984 causing mass destruction to the people. The death toll was in thousands while the injuries were so severe and in tens of thousands. By the end of two weeks, the numbers had almost doubled. This was the most unfortunate incident caused by the

negligence and lack of due care by the corporation which had long lasting effects on not only the human beings but also the plants and animals. This particular judgement deals with the

settlement which was reached between the parties to the dispute for providing immediate and urgent relief to the victims of the disaster and how that settlement impacted further judgements of Bhopal gas leak tragedy and its reasonableness was discussed.

FACTS OF THE CASE

The facts of the case are such that UCIL, which is a multi-national corporation (MNC), was operating a chemical plant which manufactured pesticides in Bhopal, Madhya Pradesh. An ingredient of the said chemical plant was the Methyl Isocyanate (MIC) which is considered as the most toxic chemical. On December 2, 1984, the tank in which MIC was being kept and

stored, it escaped from there which led to fumes into the huts and caught the plant premise and residents. It also largely affected the plant and animal wildlife (the flora and the fauna),

damaging it. Further, around 2600 human beings lost their life immediately while the toll reached 8000 after 14 days and around tens of thousands were affected with serious degrees of health ailments due to the escape of the lethal gas. It was the most unfortunate and adverse situation having long lasting effects in Bhopal affecting even the children in womb.

After that, on March 29, 1985, the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 was passed which gave the authority to the Government of India to act as a parent patriae (parent for the nation) of the victims and to represent their interests and claim for compensation in a speedy and effective manner for the victims of such an unfortunate disaster. The Union went to the court of US to litigate on the matter cited reasons that Indian legal system had major backlogs as well as is not completely knowledgeable in torts and there is thus, a gap and justice will not be properly given.

Initially, the proceeding for compensation was made before the court of United States of

America. Subsequent to the dismissal order in US (on ground of forum non conveniens) on May 12, 1986, in September, the Union filed a suit in Bhopal’s District Court3. It pleaded for

damages and compensation for injuries suffered by the people and the deaths which occurred there and all of it amounted to around five lakhs individuals. It also pleaded for a decree to

deter the defendant as well as other MNCs from showing disregard towards the safety of the citizens involved in their business activities.

The district court made order for 350 million dollars as the interim compensation against UCC. In appeal, the High Court reduced it to rupees 250 million by modifying the order of the district court of Rupees 350 million. This was challenged in the present case through an appeal since there was already an overall settlement of 470 million US dollars and termination of proceedings – civil and criminal.

ISSUES INVOLVED

I. Whether the order made by the High Court of Madhya Pradesh is valid which reduced the compensation to Rs. 250 Crores modifying the order of the District Court?

PLEA OF THE APPELLANT

The appellant presented that since there were already offers and counter – offers made between the parties to the dispute during the proceedings for settlement of the dispute and to provide effective remedy to the victim by way of settling the matter. It was because of the urgency of the matter that the immediate relief was necessary and the settlement between both the parties were offered by way of overall settlement of dispute which will include payment of compensation and termination of the proceedings.

Plea of the Respondent

The respondent presented at the District Court as such that for damages and compensation for injuries suffered by the people and the deaths that happened which all amounted to around

five lakhs individuals along with a decree to deter the defendant as well as other MNCs from showing disregard towards the safety of the citizens involved in their business activities. As

the matter reached the apex court, due to the urgency and fast remedy to the victims, a settlement was offered by the other party to the dispute in terms of compensation to be paid.

 

The Bhopal Gas Disaster (Processing of Claims) Act, 1985 is the act which conferred the powers on the Union (Central Government) to secure the rights of the victims of the Bhopal

gas tragedy as well as to deal with such claims which arises out of such as disaster or connected or annexed to the gas leak in Bhopal. Furthermore, this power is conferred so as to deal the matter in a speedy and effective manner so that it is benefits the victims of the disaster. It came into force on February 20, 1985 as Act No. 21 of 1985.

Under its Section 3, there is power given to the Central Government to represent the claimants which is an exclusive right given (with exception in Section 4 to allow the claimant to have a legal practitioner of their choice to represent their claim) who is entitled to make a claim or has made a claim. The powers given include the power to institute a suit or proceeding in India or outside India as well as power to withdraw such a suit. Further, there is power given to enter into a compromise or a settlement by the Central Government. Lastly, it also gave the Central Government the power of a civil court to discharge its function

including production of documents, summoning, etc.

JUDGEMENT

The apex court while deciding the matter said that there is an urgent need to provide for immediate relief to the victims of the Bhopal gas leak disaster. They opined that at this point it seems appropriate for an overall settlement after looking at the facts and circumstances as well as the offers and counter – offers made at the procedural stages to give an order for settlement which is equitable and just in nature. What the court cited was the “manifest reasonableness” that is exhibited by such an acceptance of settlement between the parties.

The terms of the settlement dictated as follows that the UCC will make the payment of certain 470 million US dollar in regard to the manner defined as: firstly, 425 million US dollars to be paid to the Central Government by March 23, 1989 by UCC; secondly, 45 million US dollar to be paid by March 23, 1989 by UCIL at the prevailing exchange rate; and lastly, this payment is to the Central Government for all the victims of the tragedy as per the

Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme, 1985 but it is not treated as fines or punitive damages. Thus, the purpose of this settlement is for the advantage of the victims and to aid them in that regard.

Reciprocity is to be maintained by the Union of India in the form that, it shall ensure that steps are taken to implement the order as well as to ensure that any future claims are in regard to such a settlement reached as well as the pending civil or criminal claims or suits or proceedings to stand dismissed or quashed as applicable. Furthermore, the order of the district court of the Bhopal is as such discharged along with the revisions and the contempt proceedings against the parties or the advocates will be dropped. These are pursuant to the payment made by the UCC.

Thus, these were the broad terms of the settlement reached in that judgement by the apex court. Along with that it listed that the amount collected will be deposited to the credit of Registrar of the court and in the bank as per the directions. Furthermore, it also gave authority to the Registrar to get the amount credited and transferred which is unutilized and lying with the Indian Red Cross Society as per their directions for the same. The terms of settlement formed the part of the order. Lastly, the proceedings before the district court of Bhopal are disposed and any such revisions in accordance to the payment by the UCC.

The Supreme Court held that given the human suffering and urgency of the issue to provide compensation to the victims of such a tragedy, a memorandum of settlement is filed before

the court detaining the UCC to pay 470 million US dollar to the Union of India on or before March 31, 1989 as a full settlement in regard to all the claims, rights and liabilities. Along with that in terms of settlement, all the civil proceedings will be transferred to the apex and will be concluded as well as the criminal proceedings to be quashed, all which are pending.