Holding

The Supreme Court held that a settlement of US$470 million (approximately Rs.750 crores) was just, equitable and reasonable, and ordered its acceptance along with the termination of all civil and criminal actions.

Summary

The Bhopal gas leak of December 2, 1984 killed about 2,660 people and injured tens of thousands. The Union of India and Union Carbide Corporation appealed against an interim compensation order of Rs.250 crores. The Supreme Court, considering the urgent need for relief, the range of offers (US$426‑500 million) and the government's exclusive statutory authority under the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Act, 1985, ordered an overall settlement of US$470 million (≈Rs.750 crores) and the termination of all civil and criminal proceedings. The Court explained that the amount was a just, equitable and reasonable compromise, given the massive number of claims, the delay inherent in litigation, and the necessity of immediate humanitarian relief. It also noted that it was not deciding on broader questions of multinational corporate liability or environmental policy, leaving those for future review if needed.

Issues considered

How did the Court determine the settlement figure of US$470 million?
Why was the settlement considered just, equitable and reasonable?
Why did the Court refrain from pronouncing on broader legal questions concerning liability of multinational corporations and hazardous technologies?
Whether the settlement could lawfully terminate pending criminal proceedings.

Legislation cited

Bhopal Gas Leak Disaster (Registration and Processing of Claims) Act, 1985

Subjects

Bhopal gas tragedymass disastersettlementcompensationcorporate liabilityenvironmental lawtort lawhumanitarian reliefreviewArticle 137

Judgment

UNION CARBIDE CORPORATION
A
v.
UNION OF INDIA ETC.

MAY 4, 1989

B [R.S. PATHAK, CJ, E.S. VENKATARAMIAH, RANGANATH
MISRA, M.N. VENKATACHALIAH AND N.D. OJHA, JJ.)

Bhopal Gas Leak Disaster (Registration and Processing of
claims) Act, 1985: Court' giving reasons for the overall settlement order
dated February 14, 1989-Compelling duty both judicial and humane to ./'
secure immediate relief to the victims.
c
The Bhopal Gas Leak Tragedy that occurred at midnight of 2nd ,_.
December, 1984, by the escape of deadly chemical fumes from the
appellant's factory was a great industrial disaster and it took an
immediate toll of 2600 human lives and left tens of thousands of inno-
0 cent citizens of Bhopal physically affected in various ways. As per the _
figures furnished by the Union of India in its amended plaint a total
number of 2,660 persons suffered agonising and excruciating deaths
between 30,000 to 40,000 persons sustained serious injuries as a result
of the said disaster.

E Legal proceedings for the recovery of compensation for the vic-
tims were initiated against the multi-national company first in the U.S.
Courts and later in Distt. Court at Bhopal in Suit No. 113 of 1986. The
present appeals concern with the order dated 4th April, 1988 passed by
the Madhya Pradesh High Court whereby it modified the interlocutory
order dated 17.12.1987 made by the Dist!. Judge and granted interim J"
F compensation of Rs.250 crores. Both the Union of India and the Union .
Carbide Corporation have appealed to this Court against that order.

The Court by its order dated the 14th February, 1989 made in
these appeals directed that there shall be an overall settlement of the
, claims in the suit for 470 million U.S. Dollars and terminaion of all civil
G and criminal proceedings. On May 4, 1989 the Court pronounced its
reasons for its aforesaid order dated 14.2.89thus:

The Statement of the reasons is not made with any sense of finality
as to the infallibility of the decision; but with an open mind to be able to
appreciate any tenable and compelling legal or factual infirmities that
H may be brought out, calling for remedy in review under Article 137 of
the Constitution. [132C-D)
128
UNION CARBIDE v. U .0.1. 129
·'\. The basic consideration motivating the conclusion of the settle-
ment. was the compelling need for urgent relief. Considerations of ex-
A
cellence and niceties of legal principles were greatly over-shadowed ·by the
pressing problems of very survival for a large number of victims. [133A, Cl

The instant case is one where damages are sought on behair of the
. ..., victims of a mass disaster, and having regard to the complexities and B
the legal question involved, any person with an unbiased vision would
not miss the time consuming prospect for the course of the litigation in
• its sojourn through the various courts, both in India . and later in
~ United States. This Court considered it a compelling duty, both judicial
i .- and humane, to secure immediate relief to the victims. In doing so, the
\_ Court did not enter upon any forbidden ground. What this Court did C
r was in continuation of what had already been initiated. [133E-F, H; 134AI
' <

The range of choice for the Court in regard to the figures was,
therefore, between the maximum of 426 million U.S. Dollars offered by
Shri Nariman and the minimum of 500 million U.S. Dollars suggested
by the Attorney General. [134F-G] D

Having regard to all the circumstances including the prospect of
delays inherent in the judicial process in India and thereafter in the
matter of domestication of the decree in the United States for the
purpose of execution, the Court directed that 470 million U.S. Dollars
which upon immediate payment and with interest over a reasonable E
period, pending actual distribution amongst the claimants, would
aggregate very nearly to 500 million U.S. Dollars or its rupee equivalent
of approximately Rs. 750 crores which the Attorney General had sug-
gested, be made the basis of the Settlement. [l34G-H; 135A-B]

The Settlement proposals were considered on the premises that F
the Government had the exclusive statutory authority to represent and
act on behalf of the victims and neither counsel had any reservation as
to this. The order was also made on the premises that the Bhopal Gas
Leak Disaster (Registration and Processing of Claims) Act 1985 was a
valid law. [1358-C]
G
There might be different opinions on the interpretation of laws or
on questions of policy or even on what may be considered wise or
unwise; but when one speaks of justice and truth, these words mean the
same thing to all men whose judgment is uncommitted. [1408-CI

The compulsions of the need for immediate relief to tens of H
130 SUPREME COURT REPORTS [1989] 3 S.C.R.

A thousands of suffering victims could not wait till these questions, vital
though they be, are resolved in due course of judicial proceedings. [142D-E]

A settlement has been recorded upon material and in circums-
tances which persuaded the Court that it was a just settlement. This is
not to say that this Court will shut out any important material and any
B compelling circumstances which might impose a duty on it to exercise
the powers of review. Like all other human institutions,. this Court is
human and fallible. What appears to the Court to be just and reason-
able in that particular context and setting, need not necessarily appear
to others in the same day. Which view is right, in the ultimate analysis,
is to be judged by what it does to relieve the undeserved suffering of
thousands of innocent citizens of this country. [142F-G)
c
Decisions of courts cannot be reacted or altered or determined by
agitational pressures. If a decision is wrong, the process of correction
must be in a manner recognised by law. All of those who invoke the
corrective processes in accordance witb)aw shall be beard and the court
D will do what the law and the course of justice requires. The matter
concerns the interests of a large number of victims of a mass disaster.
The Court directed the settlement with the earnest hope that it would do
them good and bring them immediate relief, for, tomorrow might be too
late for many of them. But the case equally concerns the credibility of,
and the public confidence in, the judicial process. [143B, D-EJ
E
Those who trust this Court will not have cause for despair. [143F]

M.C. Mehta v. Union of India, AIR 1987 SC 1086; Theories of
Compensation, R.E. Goodin: Oxford journal of Legal Studies, 1989 4i1
p.57 and Wallace Mendelson: Supreme Court Statecraft-The Rule of JI
F Law and men, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3187
and 3188 of 1988.

From the Judgment and Order dated 4.4.1988 of the Madhya
G Pradesh High Court in CR No. 26 of 1988.

Anil B. Dewan, J.B. Dadacbanji, Mrs. A.K. Verma for the
Appellant.

K. Parasaran, A. Mariarputham, Miss A. Subhashini and C.L.
H Sahu for the Respondents.
UNION CARBIDE v. U.O.J. 131

The following Order of the Court was delivered:
A
ORDER

The Bhopal Gas Leak tragedy that occurred at midnight on 2nd
..__,,. December, 1984, by the escape· of deadly chemical fumes from the
appellant's pesticide-factory was a horrendous industrial mass disas- B
ter, unparalleled in its magnitude and devastation and remains a
ghastly monument to the de-humanising influence of inherently
-. dangerous technologies. The tragedy took an immediate toll of 2,660
"'-innocent human lives and left tens of thousands of innocent citizens of
· Bhopal physically impaired or affected in various degrees. What added
grim poignance to the tragedy was that the industrial-enterprise was C
).-. using Methyl !so-cyanate, a lethal toxic poison, whose potentiality for
destruction of life and biotic-communities was, apparently, matched
only by the lack of a pre-package of relief procedures for management
of any accident based on adequate scientific knowledge as to the
ameliorative medical procedures for immediate neutralisation of its
effects. D

It is unnecessary for the present purpose to refer, in any detail,
, to the somewhat meandering course of the legal proceedings for the
...--J.•. recovery of compensation initiated against the multi-national company
initially in the Courts in the United States of America and later in the
District Court at Bhopal in Suit No. 113 of 1986. It would suffice to E
refer to the order dated 4 April, 1988 of the High Court of Madhya
Pradesh which, in modification of the interlocutory-order dated 17
December, 1987 made by the learned District Judge, granted an
interim compensation of Rs.250 crores. Both the Union of India and
J. the Union Carbide Corporation appealed against that order.
F
This Court by its order dated 14 February, 1989 made in those
appeals directed that there be an overall settlement of the claims in the
suit, for 470 million US dollars and termination of all civil and criminal
proceedings. The opening words of the order said:

"Having given our careful consideration for these G
several days to the facts and circumstances of the case
placed before us by the parties in these proceedings,
including the pleadings of the parties, the mass of data
placed before us, the material relating to the proceedings in
the Courts in the United States of America, the offers and
counter-offers made between the patties at different stages H
132 SUPREME COURT REPORTS [1989] 3 S.C.R.

during the various proceedings, a~ wen as the complex
A
issues of law and fact raised before us and the submission
made thereon, and in particular the enormity of human
suffering occasioned by the Bhopal Gas disaster and the
pressing urgency to provide immediate and substantial relief
to victims of the disaster, we are of opinion that the case is
B pre-eminently fit for an overan settlement between the
parties covering an litigations, claims, rights and liabilities
related to and arising out of the disaster ..... "
(Emphasis Supplied)

It appears to us that the reasons that persuaded this Court to
make the order for settlement should be set-out, so that those who
C have sought a review might be able effectively to assist the Court in -""""'
satisfactorily dealing with the prayer for a review. The statement of the
reasons is not made with any sense of finality as to the infallibility of
the decision; but with an open mind to be able to appreciate any
tenable and compelling legal or factual infirmities that may be brought
D out, calling for remedy in Review under Article 137 of the Constitu-
tion.

The points on which we propose to set-out brief reasons are the
following: _.)..___

E (a) How did this Court arrive at the sum of 470 mil.lion US
doHars for an over-an settlement?

(b) Why did the Court consider this sum of 470 million US
dollars as 'just, equitable and reasonable'?

F (c) Why did the Court not pronounce on certain important legal
questions of far reaching importance said to arise in the appeals
as to the principles of liability of mon.olithic, economicaHy
entrenched multi-national companies operating with inherently
dangerous technologies in the developing countries of the third
world-questions said to be of great contemporary relevance to
G the democracies of the third-world?

There is yet another aspect of the Review pertaining to the part
of the settlement which terminated the criminal proceedings. The
questions raised on the point in the Review-petitions, prima facie,
merit consideration and we should, therefore, abstain from saying
H anything which might tend to pre-judge this issue one way or the
other.
UNION CARBIDE v. U.0.1. 133

The basic consideration motivating the conclusion of the settle-
ment was the compelling need for urgent relief. The suffering of the A
victims has been intense and unrelieved. Thousands of persons who
pursued their own occupations for an humble and honest living have
been rendered destitute by this ghastly disaster. Even after four years
of litigation, basic questions of the fundamentals of the law as to
liability of the Union Carbide Corporation 11nd the quantum of B
damages are yet being debated. These, of course, are important issues
which need to be decided. But, when thousands of innocent citizens
were in near destitute conditions, without adequate subsistential needs
of food and medicine and with every coming morrow haunted by the
spectre of death and continued agony, it would be heartless absten-
tion, if the possibilities of immediate sources of relief were not
explored. Considerations of excellence and niceties of legal principles c
were greatly over-shadowed by the pressing problems of very survival
for a large number of victims.

The Law's delays are, indeed, proverbial. It has been the
unfortunate bane of the judiciitl process that even ordinary cases,.where D
evidence consists of a few documents and the oral testimony of a few
witnesses, require some years to realise the fruits of litigation. This is
so even in cases of great and nnquestionable urgency such as fatal
accident actions brought by the dependents. These are hard realities.
The present case is one where damages are sought on behalf of the
victims of a mass disaster and, having regard to the complexities and E
the legal questions involved, any person with an unbiased vision would
not miss the time consuming prospect for the course of the litigation in
its sojourn through the various courts, both in India and later in
United States.

It is indeed a matter for national introspection that public F
response to this great tragedy which affected a large number of poor
and helpless persons limited itself to the expression of understandable
anger against the industrial enterprise but did not channel itself in any
effort to put together a public supported relief fund so that the victims
were not left in distress, till the final decision in the litigation. It is well
known that during the recent drought in Gujarat, the devoted efforts G
of public spirited persons mitigated, in great measure, the loss of
cattle-wealth in the near famine conditions that prevailed.

This Court, considered it a compelling duty, both judicial and
humane, to secure immediate relief to the victims. In doing so, the
Court did no_t enter upon_ any forbidden ground. Indeed, efforts had H
134 SUPREME COURT REPORTS [1989) 3 S.C.R.

earlier been made in this direction by Judge Keenan in the United
A
States and by the learned District Judge at Bhopal. What this Court
did was in continuation of what had already been initiated. Even at the
opening of the arguments in the appeals, the Court had @ggested to
learned counsel on both sides to reach a just and fair settlement.
Again, when counsel met for re-scheduling of the hearings the sugges-
B tion was reiterated. The response of learned counsel on both sides was
positive in attempting a settlement, but they expressed a certain
degree of uneasiness and scepticism at the prospects of success in view
of their past experience of such negotiations when, as they stated, ~
there had been uninformed and even irresponsible criticism of the . /"-. '
attempts at settlement. The learned Attorney General submitted that
even the most bona fide, sincere and devoted efforts at settlement
c were likely to come in for motivated criticism.

The Court asked learned counsel to make available the particu-
lars of offers and counter offers made on previous occasions for a
mutual settlement. Learned counsel for both parties furnished particu-
D lars of the earlier offers made for an overall settlement and what had
been considered as a reasonable basis in that behalf. The progress
made by previous negotiations was graphically indicated and these
documents form part of the record. Shri Nariman stated that his client
would stand by its earlier offer of Three Hundred and Fifty Million US
dollars and also submitted that his client had also offered to add
E appropriate interest, at the rates prevailing in the U.S.A., to the sum
of 350 miJlion US dollars which raised the figure to 426 million US
dollars. Shri Nariman stated that his client was of the view that amount
was the highest it could go upto. In regard to this offer of 426 million
US dollars the learned Attorney-General submitted that he could not
accept this offer. He submitted that any sum Jess than 500 million US
F dollars would not be reasonable. Learned counsel for both parties
stated that they would leave it to the Court to decide what should be
the figure of compensation. The range of choice for the Court in
regard to the figure was, therefore, between the maximum of 426
miilion US dollars offered by Shri Nariman and the minimum of 500
million US dollars suggested by the learned Attorney General.
G
In these circumstances, the Court examined the prima facie
material as to the basis of quantification of a sum which, having regard
to all the circumstances including the prospect of delays inherent in the
judicial-process in India and thereafter in the matter of domestication
of the decree in the United States for the purpose of execution and
H. directed that 470 million US dollars, which upon immediate payment
UNION CARBIDE v. U.0.1. 135

and with interest over a reasonable period, pending actual distribution
A
amongst the claimants, would aggregate very nearly to 500 million US
dollars or its rupee equivalent of approximately Rs. 750 crores which
the learned Attorney General had suggested, be made the basis of the
settlement. Both the parties accepted this direction.

The settlement proposals were considered on the premise that B
Government had the exclusive statutory authority to represent and act
: on behalf of the victims and neither counsel had any reservation as to
this. The order was also made on the premise that the Bhopal Gas
Leak Disaster (Registration and Processing of Claims) Act, 1985 was a
valid law. In the event the Act is declared void in the pending proceed-
ings challenging its validity, the order dated 14 February, 1989 would C
r) require to be examined in the light of that decision.

We should make it clear that if any material is placed before this
Court from which a reasonable inference is possible that the Union
Carbide Corporation had, at any time earlier, offered to pay any sum
higher than an out-right down payment of US 470 million dollars, this D
Court would straightway initiate suo motu action requiring the
concerned parties to show cause why the order dated 14 February,
1989 should not be set aside and the parties relegated to their respec-
tive original positions.

The next question is as to the basis on which this Court con- E
sidered this sum to be a reasonable one. This is not independent of its
quantification, the idea of reasonableness for the present purpose is
necessarily a broad and general estimate in the context of a settlement
of the dispute and not on the basis of an accurate assessment by adjudi-
cation. The question is how good or reasonable it is as a settlement,
which would avoid delays, uncertainties and assure immediate F
payment. The estimate, in the very nature of things, cannot share the
accuracy of an adjudication. Here again one of the important consi-
derations was the range disclosed by the offers and counter offers
which was between 426 million US dollars and 500 million US dollars.
The Court also examined certain materials available on record includ-
ing the figures mentioned in the pleadings, the estimate made by the G
High Court and also certain figures referred to in the course of the
arguments.

There are a large number of claims under the Act. In the very
nature of the situation, doubts that a sizeable number of them are
either without any just basis or were otherwise exaggerated could not H
136 SUPREME COURT REPORTS [1989] 3 S.C.R.

A be ruled out. It was, therefore, thought not unreasonable to proceed
on some prima facie undisputed figures of cases of death and of sub-
stantially compensatable personal injuries. The particulars of the
number of persons treated at the hospitals was an important indicator
in that behalf. This Court had no reason to doubt the bona fides of the
figures furnished by the plaintiff itself in the pleadings as to the
B number of persons suffering serious injuries.

From the order of the High Court and the admitted position on
the plaintiff's own side, a reasonable, prima facie, estimate of the
number of fatal cases and serious personal injury cases, was possible to
be made. The High Court said:
c ." ..... In the circumstances, leaving a small margin for the -\
possibility of some of the claims relating to death and
personal injuries made by the multitude of claims before
the Direptor of Claims of the State Government being
spurious, there is no reason to doubt that the figure
D furnished by the plaintiff Union of India in its amended
plaint can be safely accepted for the purpose of granting the
relief of interim payment of damages. It has been stated by
the plaintiff-Union of India that a total number of 2660
persons suffered agonising and excruciating deaths and bet- ).__
ween 30,000 to 40,000 sustained serious injuries as a result of
E the disaster ..... "
(Emphasis supplied)

There is no scope for any doubt that the cases referred to as
those of 'Serious injuries' include both types of cases of permanent
total and partial disabilities of various degrees as also cases of temporary· \
?..__
F total or partial disabilities of different degrees. lbe High Court relied
upon the averments and claims in the amended pleadings of the
plaintiff, the Union of India, to reach this prima facie finding.

Then, in asse•sing the quantum of interim compensation the
High Court did not adopt the standards of compensation usually
G awarded in fatal-accidents-actions or personal-injury-actions arising
under the Motor Vehicles Act. It is well-known that in fatal-accident- ~
actions where children are concerned, the compensation awardable is
in conventional sums ranging from Rs.15,000 to Rs.30,000 in each
case. In the present case a large number of deaths was of children of
very young age. Even in the case of adults, a~cording tr. the general
H run of damages in comparable cases, the damages assessed on the
UNION CARBIDE v. U.0.1. 137

usual multiplier-method in the case of income groups comparable to
A
those of the deceased-persons, would be anywhere between Rs.80,000
and Rs.1,00,000.

But the High Court discarded, and rightly, these ordinary
standards which, if applied, would have limited the aggregate of com-
pensation payable in fatal cases to a sum less than Rs .20 crores in all. B
The High Court thought it should adopt the broader principle in M. C.
Mehta v. Union of India, AIR 1987 SC 1086. Stressing the need to
apply such a higher standard, the High Court said:

"As mentioned earlier, the measure of damages payable by
the alleged tort-feaser as per the nature of tort involved in the C
suit has to be correlated to the magnitude and the capacity of
the enterprises because such compensation must have a
deterrent effect ......... "

(Emphasis supplied)
D
Applying these higher standards of compensation, the High Court
proceeded to assess damage in the following manner:

"Bearing in mind, the above factors, in the opinion of this
Court, it would not be unreasonable to assume that if the
suit proceeded to trial the plaintiff-Union of India would E
obtain judgment in respect of the claims relating to deaths
and personal injuries at least in the following amounts:
(a) Rs.2 lakhs in each case of death; (b) Rs.2 lakhs in each
case of total permanent disability; (c) Rs. l lakh in each case
of permanent partial disablement and (d) Rs.50,000 in each
case of temporary partial disablement." F
(Emphasis supplied)

Half of these amounts were awarded as interim compensation. An
amount of Rs.250 crores was awarded.

The figures adopted by the High Court in regard to the number G
of fatal cases and cases of serious personal injuries do not appear to
have been disputed by anybody before the High Court. These data and
estimates of the High Court had a particular significance in the settle-
ment. Then again, it was not disputed before us that the total number
of fatal cases was about 3000 and of grievous and serious personal
injuries, as verifiable from the records of the hospitals of cases treated H
138 SUPREME COURT REPORTS [1989] 3 S.C.R.

at Bhopal, was in the neighbourhood of 30,000. It would not be
A
unreasonable to expect that persons suffering serious and substantially
compensable injuries would have gone to hospitals for treatment. It
would also appear that within about 8 months of the occurrence, a
survey had been conducted for purposes of identification of cases of
death and grievous and serious injuries for purposes of distribution of
B certain ex gratia payments sanctioned by Government. These figures
were, it would appear, less than ten thousand.

In these circumstances, as a rough and ready estimate, this Court
took into consideration the prima facie findings of the High Court and
estimated the number of fatal· cases at 3000 where compensation could
range from Rs.1 lakh to Rs.3 lakhs. This would account for Rs.70
C crores, nearly 3 times higher than what would, otherwise, be awarded
in comparable casses in motor vehicles accident claims.

Death has an inexorable finality about it. Human lives that have
been lost were precious and in that sense priceless and invaluable. But
D the law can compensate the estate of a person whose life is lost by the
wrongful act of another only in the way of the law is equipped to
compensate i.e. by monetary compensations calculated on certain
well-recognised principles. "Loss to the estate" which is the entitle-
ment of the estate and the 'loss of dependancy' estimated on the basis
of capitalised present-value awardable to the heirs and dependants,
E are the main components in the computation of compensation in fatal
accident actions. But, the High Court in estimating the value of com-
pensation had adopted a higher basis.

So far as personal injury cases are concerned, about 30,000 was
estimated as cases of permanent total or partial disability. Compensa-
F tion ranging from Rs.2 lakhs to Rs.50,000 per individual according as
the disability is total or partial and degrees of the latter was envisaged.
This alone would account for Rs.250 crores. In another 20,000 cases of
temporary total or partial disability compensation ranging from Rs. l
lakh down to Rs.25,000 depending on the nature and extent of the
injuries and extent and degree of the temporary incapacitation
G accounting for a further allocation of Rs.100 crores, was envisaged.
Again, there might be possibility of injuries of utmost severity in which r
case even Rs.4 lakhs per individual might have to be considered. Rs.SO
crores, additionally for about 2000 of such cases were envisaged. A
sum of Rs.500 crores approximately was thought of as allocable to the
fatal cases and 42,000 cases of such serious personal injuries leaving
H behind in their trail total or partial incapacitation either of permanent
or temporary character.
UNION CARBIDE v. U.0.1. 139

It was considered that somt> outlays would have to be made for
A
specialised institutional medical treatment for cases requiring such
expert medical attention and for rehabilitation and after care. Rs.25
crores for the creation of such facilities was envisaged.

That would leave another Rs.225 crores. It is true that in
assessing the interim compensation the High Court had taken into B
account only the cases of injuries resulting in permanent or tem9orary
disabilities-total-or partial-and had not adverted to the large
number of other claims, said to run into lakhs, filed by other
claimants.

Such cases of claims do not, apparently, pertain to serious cases
~··
of permanent or temporary disabilities but are cases of a less serious c
nature, comprising claims for minor injuries, loss of personal belong-
ings, loss of live-stock etc. for which there was a general allocation of
Rs.225 crores. If in respect of these claims allocations are made at
Rs.20,000, Rs.15,000 and Rs.10,000 for about 50,000 person or claims
in each category-accounting for about one and half lakhs more D
claims-the sums required would be met by Rs.225 crores.

Looked at from another angle, if the corpus of Rs.750 crores
along with the current market rates of interest on corporate borrow-
ings, of say 14%_or 141/2 % is spent over a period of eight years it would
make available Rs.150 crores each year; or even if interest alone is E
taken, about Rs.105 to 110 crores per year could be spent, year-after-
year, perpetually towards compensation and relief to the victims.

The court also took into consideration the general run of
j damages in comparable accident claim cases and in cases under work-
mens compensation laws. The broad allocations made are higher than F
those awarded or awardable in such claims. These apportionments are
merely broad considerations generally guiding the idea of reasonable'
ness of the overall basis of settlement. This exercise is not a pre-
determination of the quantum of compensation amongst the claimants
either individually or category-wise. No individual claimant shall be
entitled to claim a particular quantum of compensation even if his case G
is found to fall within any of the broad categories indicated above. The
determination of the actual quantum of compensation payable to the
claimants has to be done by the authorities under the Act, on the basis
of the facts of each case and without reference to the hypothetical
quantifications made only for purposes of an overall view of the
adequacy of the amount. H
140 SUPREME COURT REPORTS [1989] 3 S.C.R.

These are the broad and general assumptions underlying the con-
A
cept of 'justness' of the determination of the quantum. If the total
number of cases of death or of permanent, total or partial, disabilities
or of what may be called 'catastrophic' injuries is shown to be so large
that the basic assumptions underlying the settlement become wholly
unrelated to the realities, the element of 'justness' of the determina-
B tion and of the 'truth' of its factual foundation would seriously be
impaired. The 'justness' of the settlement is based on these assump-
tions of truth. Indeed, there might be different opinions on the
interpretation of laws or on questions of policy or even on what may be
considered wise or unwise; but when one speaks of justice and truth,
these words mean the same thing to all men whose judgment is uncom-
mitted. Of Truth and Justice, Anatole France said:
c
"Truth passes within herself a penetrating force unknown
alike to error and falsehood. I say truth and you must
understand my meaning. For the beautiful words Truth
and Justice need not be defined in order to be understood
D in their true sense. They bear within them a shining beauty
and a heavenly light. I firmly believe in the triumph of truth
and justice. That is what upholds me in times of trial
"
J
As to the remaining question, it has been said that many vital
E juristic principles of great contemporary relevance to the Third World
generally, and to India in particular, touching problems emerging from
the pursuit of such dangerous technologies for economic gains by
multi-nationals arose in this case. It is said that this is an instance of
lost opportunity to this apex Court to give the law the new direction on
vital issues emerging from the increasing dimensions of the economic >-
F exploitation of developing countries by economic forces of the rich
ones. This case also, it is said, concerns the legal limits to be en-
visaged, in the vital interests of the protection of the constitutional
rights of the citizenry, and of the environment, on the permissibility of
such ultra-hazardous technologies and to prescribe absolute and deter-
rent standards of liability if harm is caused by such enterprises. The
G prospect of exploitation of cheap labour and of captive-markets, it is
said, induces multi-nationals to enter into the developing countries for .'{
such economic-exploitation and that this was eminently an appropriate
case for a careful assessment of the legal and Constitutional safeguards
stemming from these vital issues of great contemporary relevance.

H These issues and certain cognate areas of even wider significance
UNION CARBIDE v. U.0.1. 141

and the limits of the adjudicative disposition of some of their aspects
A
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 pro-
blems of the adequacy of legal protection against such exploitative and
hazardous industrial adventurism, and whether the citizens of the B
country are assured the protection of a legal system which could be
said to be adequate in a cmpprehensive 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.

The chemical pesticide industry is a concomitant, and indeed, an
integral part, of the Technology of Chemical Farming. Some experts c
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-conformable, "soft" technology with its
systemic-wisdom and opportunities for human creativity and initiative. D
"Wisdom demands" says Schumacher" a new orientation of science
and technology towards the organic, the gentle, the non-violent, the
elegant and beautiful". The other view stressing the spectacular
success of agricultural production in the new era of chemical farming,
with high-yielding strains, points to the break-through achieved by the
Green Revolution with its effective response to, and successful E
management of, the great challenges of feeding the millions. This
technology in agriculture has given a big impetus to enterprises of
chemical fertilizers and pesticides. This, say its critics, has brought in
its trail its own serious problems. The technology-options before scien-
tists and planners have been difficult.
F
Indeed, there is also need to evolve a national policy to protect
national interests from such ultra-hazardous pursuits of economic
gains. Jurists, technologists and other experts in Economics, env1ron-
mentology, futurology, sociology and public health etc. should identify
areas of common cOncern and help _in evolving proper criteri~ wh~h
may receive judicial recognition and legal sanction. G

One aspect' of this matter was dealt with by this Court in M. C.
Mehta v. Union of India, (supra) which marked a significant stage in
the development of the law. But, at the hearing there was more than a
. mere hint in the submissions of the Union Carbide that in this case the
law was altered with only the Union Carbide Corporation in mind, and H
142 SUPREME COURT REPORTS [1989] 3 S.C.R.

was altered to its disadvantage even before the case had reached this
A
Court. The criticism of the Mehta principle, perhaps, ignores the
emerging postulates of tortious liability whose principal focus is the
social-limits on economic adventurism. There are certain things that a
civilised society simply cannot permit to be done to its members, even
if they are compensated for their resulting losses. We may note a
B passage in "Theories of Compensation," R.E. Goodin: Oxford Journal
of Legal Studies, 1989, P. 57.

"It would, however, be wrong to presume that we as a
society can do anything we like to people, just so long as we.
compensate them for their losses. Such a proposition would
mistake part of the policy universe for the whole. The set of
c policies to which it points-policies that are 'permissible'
but only with compensation'-is bounded on the one side
by a set of policies that are 'permissible, even without
compensation' and on the other side by a set of policies that
are 'impermissible, even with compensation'."
D
But, in the present case, the compulsions of the need for
immediate relief to tens of thousands of suffering victims could not,
in our opinion, wait till these questions, vital though they be, are
resolved in the due course of judicial proceedings. The tremendous
suffering of thousands of persons compelled us to move into the direc-
E tion of immediate relief which, we thought, should not be subordina-
ted to the uncertain promises of the law, and when the assessment of
fairness of the amount was based on certain factors and assumptions
not disputed even by the plaintiff.

A few words in conclusion. A settlement has been recorded upon )
F material and in circumstances which persuaded the Court that it was a
just settlement. This is not to say that this Court will shut out any
important material and compelling circumstances which might impose
a duty on it to exercise the powers of review. Like all other human
institutions, this court is human and fallible. What appears to the court
to be just and reasonable in that particular context and setting, need
G not necessarily appear to others in the same way. Which view is right,
in the ultimate analysis, is to be judged by what it does to relieve the
undeserved suffering of thousands of innocent citizens of this country.
As a · learned author said: Wallace Mendelson: Supreme Court
Statecraft-The Rule of Law and Men.

H "In this imperfect legal setting we expect judges to clear
UNION CARBIDE v. U.0.l. 143

their endless dockets, uphold the Rule of Law, 'and yet not A
utterly disregard our need for the discretionary justice
of Plato's philosopher king. Judges must be sometimes
cautious and sometimes bold. Judges must respect both the
traditions of the past and the convenience of the present
"
B
But the course of the decisions of courts cannot be reached or altered
or determined by agitational pressures. If a decision is wrong, the
process of correction must be in a manner recognised by law. Here,
many persons and social action groups claim to speak for the victims,
quite a few in d_ifferent voices. The factual allegations on which they
rest their approach are conflicting in some areas and it becomes c
difficult to distinguish truth from false-hood and half-truth, and to
distinguish as to who speaks for whom.

However, all of those who invoke the corrective-processes in
accordance with law shall be heard and the court will do what the law
and the course of justice requires. The matter concerns the interests of D
a large number of victims of a mass disaster. The Court directed the
settlement with the earnest hope that it would do them good and bring
them immediate relief, for, tomorrow might be too late for many of
them. But the case equally concerns the credibility of, and the public
confidence in, the judicial process. If, owing to the pre-settlement
E

-
procedures being limited to the main contestants in the appeal, the
benefit of some contrary or supplemental information or material,
having a crucial bearing on the fundamental assumptions basic to the
settlement, have been denied to the Court and that, as a result, serious
miscarriage of justice, violating the constitutional and legal rights of
the persons affected, has been occasioned, it will be the endeavour of
this Court to undo any such injustice. But that, we reiterate, must be F
by procedures recognised by law. Those who trust this Court will not
have cause for despair.

Y.L.