Bhopal Gas Tragedy : Union Carbide Opposes Centre's Curative Plea For Additional Compensation; Supreme Court Reserves Judgment

Over a course of three days, a Bench comprising Justice S.K. Kaul, Justice Sanjiv Khanna, Justice A.S. Oka, Justice Vikram Nath and Justice J.K. Maheshwari heard the arguments forwarded by the Attorney General for India, Mr. R. Venkataramani on behalf of the Union Government; Advocate, Ms. Karuna Nundy and Senior Advocate, Mr. Sanjay Parikh representing organisations and victims of the disaster; and Senior Advocate, Mr. Harish Salve for the Corporation.

On the first day of the hearing, the Bench had posed questions to the Attorney General on the scope of the curative petition. It expressed concern that how can the Union Government seek to reopen or add-on to a settlement which was arrived at back in the year 1989. The Attorney General’s response was that given the enormity of the tragedy, the Apex Court ought to travel beyond the conventional principles to do complete justice to the victims of the disaster. On the second day, the Attorney General continued with his attempt to substantiate the Centre’s claim for additional compensation. The judges primarily raised questions regarding the grounds on which add-on can be made to the settlement that was arrived at almost three decades back. During the course of the hearing, it came to light that in an order passed by it in 1991, the Apex Court had directed the Union Government to take out insurance policies for at least 1 lakh people, so that it can take care of the future claims. However, it appeared that the same had not been implemented by the Centre. On Thursday, in order to settle the controversy regarding the same once and for all, Justice Kaul, at the outset, asked the Attorney if it was a fact that the Union Government had not implemented the said direction. The Attorney General submitted, “Yes, that is the fact.”

The curative petition, which was filed by the Union Government in December, 2010, argued that the earlier settlement was based on incorrect assumptions on the number of deaths, injuries and losses, and has not taken into account the subsequent environmental degradation. As per the plea, the earlier figures for death was 3000 and for injury was 70,000, whereas the actual figures for death is 5295 and for injury, it is 5,27,894.

In 1985, the Parliament had enacted the Bhopal Gas Leak (Processing of Claims) Act, envisaging the Union Government to represent the victims of the tragedy before the Courts. Initially, the Union Government had filed a case in the Federal District Court at New York claiming about 3 billion dollars in damages. The case was dismissed with directions being passed to submit to the jurisdiction of the Indian Courts. Thereafter, a suit was filed in District Court in Bhopal. Interim direction was issued by the District Judge to Union Carbide to pay INR 350 crores to the victims of the gas leak. The Corporation approached the Madhya Pradesh High Court challenging the order of the District Judge. Upholding the principle of compensation, the High Court reduced the quantum from INR 350 crore to INR 250 crore. The same was challenged by both the Corporation and the Union Government before the Apex Court. The Supreme Court asked the parties to explore possibilities of settlement. In 1989, a settlement was arrived at between the Corporation and the Government of India, which was endorsed by the Apex Court. 470 million dollars were paid by the Corporation in the settlement. A review petition was filed by organisations, where the Apex Court refused to increase the quantum of settlement. Subsequently, a petition was filed by the Union Government seeking to re-open the settlement, which was dismissed by an order in 1991. After almost 19 years, in 2010, the Union Government filed the curative petition, which the Constitution Bench is to now decide. It appears that several class action suits were also filed by the victims of the tragedy against Union Carbide Corporation, in the US Courts.

On Thursday, as Advocate, Ms. Karuna Nundy on behalf of a group of survivors commenced with her arguments, Justice Kaul noted that the Union Government had taken up the duty to represent the survivors and had stepped into their shoes. Therefore, according to him, there cannot be a separate channel for representation. He observed that Ms. Nundy’s submission cannot go beyond the four walls of the curative petition that had been filed by the Union Government. Ms. Nundy assured the Bench that her plea falls squarely within the technical considerations of the curative jurisdiction. Her arguments were premised on the ground that there was a gross miscarriage of justice; a fraud was played by the Corporation, that had suppressed material facts that go to the very root of the settlement. Justice Kaul was of the view that the plea raised by the Counsel would require the Court to restart the trial.

Ms. Nundy apprised the Bench that about 93% of the victims suffering from cancer and renal failure received a mere INR 50,000 as compensation. She urged the Bench to unravel the "fraud" and in those terms set aside the settlement. However, Justice Oka suggested that the same might be beyond the scope of a curative petition. Adding to Justice Oka’s opinion, Justice Kaul told the Counsel that her only argument can be on the ‘top-up’ and nothing else. As one seeking impleadment, the Judge reckoned, that her plea cannot go beyond the plea of the Union Government. To this, Ms. Nundy responded that considering issues of gross miscarriage of justice would fall within the ambit of curative jurisdiction.

Next, the Bench heard Senior Advocate, Mr. Sanjay Parikh appearing on behalf of non-government organisations. The sheet anchor of his case was that the entire control of the settlement proceedings was retained by the Apex Court. Justice Kaul refused to accept this line of argument stating, “The amount was not determined by the Court; it was a settlement by the parties. The Court was just trying to see that the settlement you worked out is implemented…But you are putting another nuance, that, we are asking for top-up on the basis that it is the Court that determined the amount.”

He added that though the Court might have pushed the parties to settle, it never proposed the amount of compensation that was finally agreed upon.

“Today you are saying that the anxiety of the Court to see people must get succour urgently amounts to the Court deciding the settlement of its own”, the Judge said.

Justice Kaul added, “The Supreme Court wanted to see that it is not a scenario that the claimants are not taken for a ride…”

Justice Khanna told Mr. Parikh that, by law, settlement in a representative suit cannot be entered into without the leave of the Court. But, that does not suggest that the amount was decided by the Court.

Mr. Parikh submitted, “The justness component and to see that it does not result in manifest justice always remains with the Court.”

Justice Kaul enquired what had happened to the land where the factory was located. Mr. Parikh responded that 1.1 million tonnes of contaminated soil is still lying there. The Judge was perturbed that the Government had not done anything to dispose of the soil in the last 40 years since the incident took place in 1984.

“For everything they (UoI) need court orders? Then they say the Court passes orders”, he said.

He added, “Some storage must have been done.”

Mr. Parikh responded that subject to correction, as far as his knowledge goes nothing has been done.

Providing a brief conspectus of the litigation involved in the matter, Mr. Harish Salve on behalf of the Union Carbide Corporation(now Dow Chemicals) urged that a full and final settlement was arrived at between his client and the Government of India in 1989 and there is no scope for re-opening of the same. He submitted that while the review petition pleaded for setting aside the settlement, the curative petition filed by the Centre, very consciously, does not harp on the same. It was averred -

“Nothing is argued to show that the review Bench made some horrible mistake in coming to this conclusion. Today they are saying apply MC Mehta, but the review Bench heard that argument, and said, sorry, we will not....There are a series of affidavits filed starting in 1995 and ending as late as 2011, where the Union of India has opposed every single attempt to suggest that the settlement is inadequate.”

Dua Associates briefed Harish Salve on behalf of Dow Chemicals.

[Case Status: UoI And Ors. v. M/s. Union Carbide Corporation And Ors. Curative Petition (C) No. 345-347/2010]