# CHARAN LAL SAHU ETC. ETC v. UNION OF INDIA AND ORS

- **Citation:** [1989] Supp. 2 S.C.R. 597
- **Court:** Supreme Court of India
- **Decided:** 1989-12-22
- **Case number:** Writ Petition No. 268 of 1989
- **Bench:** Sabyasachi Mukharji, K.N. Singh, S. Rangab Nathan, A.M. Ahmadi, K.N. Saikia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/charan-lal-sahu-etc-etc-v-union-of-india-and-ors-10636
- **Pages:** 134

## Headnote

Constitution of India, 1950: Articles 14, 19 and 21-Bhopal Gas
Leak Disaster (Processing of claims) Act, 1985-Whether constitutionally valid.
·
Preamble and Articles 38, 39 and 39A-Doctrine of 'parens
patriae'-Applicabi/ity of Exercise of sovereign power-Limitations.
Articles 21, 48A and 5J(g)-Human righ~tate's obligation to
protect-Need for enacting law protecting the constitutional rights of
citizens-Evolving standards highlighted by clauses Y and 13 of U.N.
Code of Conduct on transnational corporations.
Bhopal Gas Leak Disaster (Processing of claims) Act, 1985: Sections 3, 4, 5, 9 and 11-Constitutional validity of: Central Govt. representing victims m suit against multinational company-Govt. holding
share in company-Govt. alleged to be joint tort feasor-Whether competent to represent victims-Whether principles of natural justice
violated.
Settlement of claims before court-Pre-decisional and postdecisional notice-Need for-Effect of non-issue of notice.
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D
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Power conferred on Central Govt. to represent vidims in suitF
Divesting individual rights to legal remedy-Procedure followedWhether consistent with the Code of Civil Procedure 1908.
Interim Compensation-Payment of Precautionary measuresNeed for-Guidelines for the future-Immediate relief to victimsSetting up of a Tribunal-Creation of Industrial Disaster FuridG
Mooted.
Code of Civil Procedure, 1908: Order 1 Rule 8 and Order 23 Rule
JR-Procedure followed under the Bhopal Gas Leak Disaster (Processing of claims) Act, 1985-Central Govt. representing victims in suitDivesting individual rights to legal remedy-Whether procedure
II
597
A
B
c
D
598
SUPREME COURT REPORTS
[19M9J Supp. 2 S.C.R.
standard and fair-Whether violative of principles of natural justice.
Administrative Law-Principles of Natural Justice: Act of Parliament within legislative competence-applicability of the principles.
Pre-decisional notice not given-Effect of. Central Government
representing victims in a suit against a multinational company-Govt.
having shares in company-Alleged tort-feasor-Whether competent to
represent victims-Doctrine that no man shall be judge of his own
cause-Doctrine of necessity-Doctrine of 'de facto validity'-Doctrine
of bona fide representation-Applicability of.
Statutory construction: Constructive intuition approach-statute
to be read purposefully and meaningfully-Regard to be had to ihe
spirit of the statute and the mischief intended to be cured by it.
Law of Torts: Bhopal Gas Leak Disaster (Processing of claims)
Act, 1985-Grant of interim relief to the victims-Whether inherent in
the Act and the Scheme framed thereunder-Liability of tort-feasorWhether limited to civil liability to compensation-whether includes criminal liability to punitive damages also.
Union Carbide (India) Ltd. (UCIL) is a subsidiary of Union
Carbide Corporation (UCC), a New York Corporation. UCIL was
E incorporated in India in 1954. 50.99% of its shareholding was with UCC
and 22% of the shares were held by Life Insurance Corporation of India
and Unit Trust of India. UCIL owned a chemical plant in Bhopalfor the
manufacture of pesticides using Methyl Isocyanate (MIC) a highly toxic
gas.
F
On the night between 2nd and 3rd December, J 984, there was a
massive escape of lethal gas from the MIC Storage tank at the Bhopal
plant resulting in the tragic death of about 3,000 people. Thousands of
people suffered injuries. The environment also got polluted, badly
affecting the flora and the fauna.
G
On behalf of the victims, many suits were filed in various District
-:
Courts in the United States of America. All such suits were consolidated
by the Judicial Panel on Multi-District Litigation and were assigned to
the U.S. District Court, Southern District of New York and Judge
Keenan was the Presiding Judge throughout. Later, the legal battle
shilled to Indian Courts, as it could not proceed in the U.S. Courts, on
H
the ground of forum non conveniens.
C.l SAHU v. U.0.1
599
Meanwhile, the Bhopal Gas Leak Disaster (Processing

## Text

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CHARAN LAL SAHU ETC. ETC.
A
v.
UNION OF INDIA AND ORS.
DECEMBER 22, 1989
[SABYASACHI MUKHARJI, CJ, K.N. SINGH, S. RANGAB
NATHAN, .A.M. AHMADI AND K.N. SAIKIA, JJ.]
Constitution of India, 1950: Articles 14, 19 and 21-Bhopal Gas
Leak Disaster (Processing of claims) Act, 1985-Whether constitutionally valid.
·
Preamble and Articles 38, 39 and 39A-Doctrine of 'parens
patriae'-Applicabi/ity of Exercise of sovereign power-Limitations.
Articles 21, 48A and 5J(g)-Human righ~tate's obligation to
protect-Need for enacting law protecting the constitutional rights of
citizens-Evolving standards highlighted by clauses Y and 13 of U.N.
Code of Conduct on transnational corporations.
Bhopal Gas Leak Disaster (Processing of claims) Act, 1985: Sections 3, 4, 5, 9 and 11-Constitutional validity of: Central Govt. representing victims m suit against multinational company-Govt. holding
share in company-Govt. alleged to be joint tort feasor-Whether competent to represent victims-Whether principles of natural justice
violated.
Settlement of claims before court-Pre-decisional and postdecisional notice-Need for-Effect of non-issue of notice.
c
D
E
Power conferred on Central Govt. to represent vidims in suitF
Divesting individual rights to legal remedy-Procedure followedWhether consistent with the Code of Civil Procedure 1908.
Interim Compensation-Payment of Precautionary measuresNeed for-Guidelines for the future-Immediate relief to victimsSetting up of a Tribunal-Creation of Industrial Disaster FuridG
Mooted.
Code of Civil Procedure, 1908: Order 1 Rule 8 and Order 23 Rule
JR-Procedure followed under the Bhopal Gas Leak Disaster (Processing of claims) Act, 1985-Central Govt. representing victims in suitDivesting individual rights to legal remedy-Whether procedure
II
597
A
B
c
D
598
SUPREME COURT REPORTS
[19M9J Supp. 2 S.C.R.
standard and fair-Whether violative of principles of natural justice.
Administrative Law-Principles of Natural Justice: Act of Parliament within legislative competence-applicability of the principles.
Pre-decisional notice not given-Effect of. Central Government
representing victims in a suit against a multinational company-Govt.
having shares in company-Alleged tort-feasor-Whether competent to
represent victims-Doctrine that no man shall be judge of his own
cause-Doctrine of necessity-Doctrine of 'de facto validity'-Doctrine
of bona fide representation-Applicability of.
Statutory construction: Constructive intuition approach-statute
to be read purposefully and meaningfully-Regard to be had to ihe
spirit of the statute and the mischief intended to be cured by it.
Law of Torts: Bhopal Gas Leak Disaster (Processing of claims)
Act, 1985-Grant of interim relief to the victims-Whether inherent in
the Act and the Scheme framed thereunder-Liability of tort-feasorWhether limited to civil liability to compensation-whether includes criminal liability to punitive damages also.
Union Carbide (India) Ltd. (UCIL) is a subsidiary of Union
Carbide Corporation (UCC), a New York Corporation. UCIL was
E incorporated in India in 1954. 50.99% of its shareholding was with UCC
and 22% of the shares were held by Life Insurance Corporation of India
and Unit Trust of India. UCIL owned a chemical plant in Bhopalfor the
manufacture of pesticides using Methyl Isocyanate (MIC) a highly toxic
gas.
F
On the night between 2nd and 3rd December, J 984, there was a
massive escape of lethal gas from the MIC Storage tank at the Bhopal
plant resulting in the tragic death of about 3,000 people. Thousands of
people suffered injuries. The environment also got polluted, badly
affecting the flora and the fauna.
G
On behalf of the victims, many suits were filed in various District
-:
Courts in the United States of America. All such suits were consolidated
by the Judicial Panel on Multi-District Litigation and were assigned to
the U.S. District Court, Southern District of New York and Judge
Keenan was the Presiding Judge throughout. Later, the legal battle
shilled to Indian Courts, as it could not proceed in the U.S. Courts, on
H
the ground of forum non conveniens.
C.l SAHU v. U.0.1
599
Meanwhile, the Bhopal Gas Leak Disaster (Processing of claims)
Ac( 1985 was passed by the Government of India with a view to secure
that the claims arising out of or connected with the Bhopal gas leak
disaster were dealt with speedily, effectively and equitably.
Union of India filed a snit for damages in the District Court of
Bhopal on 5.9.86. However, there were negotiations for a settlement; hut
ultimately the settlement talks had failed.
On 17.12.1987, the District .Jndge ordered interim relief of Rs.350
crores. On appeal, the High Court, on 4.4.88 modified the order of the
District Judge and ordered an interim relief of Rs. 250 crores.
Aggrieved, the UCC as also the Union of India filed petitions for
spechtl leave before this Court. Leave was granted. By its orders dated
14.2.89 and 15.2.89, this Court, on the basis of a settlement arrived at
between the parties, directed UCC to pay a sum of 470 million U.S.
Dollars to the Union of India in full settlement of all claims, rights and
liabilities related to and arising out of the Bhopal gas disaster.
The said orders were passed keeping in view the Bhopal Gas
Disaster (Processing of claims) Act, 1985.
The present Writ Petitions challenge the constitutional validity of
the said Act inter alia on the Rronnds that the Act is violative of the
fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution; that the Act is violative of the Principles of Natural Justice
mainly on the ground that Union of India, being a joint tort-feasor, in
that it has permitted establishment of such factories without necessary
safe2uards, has no locusstandi to compromise on behalf of the victims;
that tne victims and their legal heirs were not given the opportunity of
being heard, before the Act was passed; that in the guise of giving aid,
the State could not destroy the rights inherent in its citizens; nor could it
demand the citizens to surrender their rights to the State; that vesting of
the rights in Central Government was bad and unreasonable because
there was conflict of interest between the Central Government and the
victims. since the Central Government owned 22% share in UCIL, and
that would make the Central Government a Judge in its own cause.
Disposing of the Writ Petitions, this Court,
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600
SUPREME COURT REPORTS
[1989] Supp. 2 S.C.R.
HELD: Sabyasachi Mukharji, CJ and K.N. Saikia, J.-Per CJ:
1. I The Act is constitutionally valid. It proceeds on the hypo·
thesis that until the claims of the victims are realised or obtained from
the delinquents, namely, UCC and UCIL by settlement or by adjudication and until the proceedings in respect thereof continue, the Central
Government must pay interim compensation or maintenance for the
victims. In entering upon the settlement in view of s. 4 of the Act,
regard must be had to the views of the victims and for the purpose of
giving regard to these, appropriate notices before arriving at any settlement, was necessary. In some cases, however, post-decisional notice
might be sufficient but in the facts and the circumstances of the present
case, no useful purpose would be served by giving a post-decisional
hearing having regard to the circumstances mentioned in the order of
this Court dated 4th May, 1989 and having regard to the fact that there
are no further additional data and facts available with the victims which
can be profitably and meaningfully presented to controvert the basis of
the settlement and further having regard to the fact that the victims had
their say, or on their behalf their views had been agitated in these
D proceedings, and will have further opportunity in the pending review
proceedings. [703E-H; 704A]
1.2 Though settlement without notice is not quite proper, on the
materials so far available, it is seen that justice has been done to the
victims but justice has not appeared to have been done. In view of the
E
magnitude of the misery involved and the problems in this case, the
setting aside of the settlement on this ground in view of the facts and the
circumstances of this case keeping the settlement in abeyance and giving
notice to the victims for a post-decisional hearing would not be in the
ultimate interest of justice. It is true that not giving notice was not
proper because principles of natural justice are fundamental in the
F
constitutional set up of this country. No man or no man's right should
be affected without an opportunity to ventilate his views. Justice is a
psychological yearning, in which men seek acceptance of their view
point by having an opportunity of vindication before the forum or the
authority enjoined or obliged to take a decision affecting their right. Yet
in the particular situations, one has to bear in mind how an infraction of
that should be sought to be removed in accordance with justice. "To do
G
a great right" after all. it is permissible sometimes "to do a little
wrong''. In the facts and circumstances of the case, this is.one of those
rare occasions. [701G-H; 702A-C]
2.1 The constitutional validity of the statute would have to be
determined on the basis of its provisions and on the ambit of its operaH lion as reasonably construed. It has to be borne in mind that if so
C.L. SAHU v. U.0.1.
601
jndged it passed the test of reasonableness, then the possibility of the
power conferred being improperly used is no ground for pronouncing
the law itself invalid. [659E-G]
2.2 Conceptually and from the jurisprudential point of view,
especially in the background of the Preamble to the Constitution of
India and the mandate of the Directive Principles, it was possible to
authorise the Central Government to take over the claims of the Victims
to fight against the multinational corporation in respect of the claims.
Because of the situation the victims were under disability in pursuing
their claims in the circumstances of the situation fully and properly. But
there is no prohibition or inhibition, for Indian State taking over the
claims of the victims or for the State acting for the victims as the Act has
sought to provide. !6~0E-HJ
2.3 The Act does provide a special procedure in respect of rights
of the victims and to that extent the Central Govt. takes upon itself the
rights of the victims. It is a special Act providing a special procedure for
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a kind of special class of victims. In view of the enormity of the disaster
D
the victims of the Bhopal gas leak disaster, as they were placed against
the multi-national and a big Indian Corporation and in view of the
presence of foreign contingency lawyers to whom the victims were
exposed, the claimants and victims can legitimately be described as a
class by themselves different and distinct, sufficiently separate and
""
identifiable to be entitled to special treatment for effective, speedy,
E
equitable and best advantageous settlement of their claims. There
indubitably is differentiation. But this differentiation is based on a
principle which has rational nexus with the aim intended to be achieved
by this differentiation. The disaster being unique in its character and in
the recorded history of industrial disaster, situated as the victims were
against a mighty multinational with the presence of foreign contingency
F
lawyers looming on the scene, there were sufficient grounds for such
differentiation and different treatment. in treating the victims of the
gas leak disaster differently and providing them a procedure, which
was just, fair,- reasonable and which was not unwarranted or unauthorised
by the Constitution, Article 14 is not breached. [683E-H; 684A-B]
Collector of Customs, Madras v. Nathella Sampathu Chetty,
[1962] 3 SCR 786; P.J. Irani v. State of Madras, [1962] 1 SCR 169;
D.K. Trivedi v. State of Gujarat, [1986] Suppl. SCC 20, relied on.
Ba/fast Corporation v. O.D. Commission, [1960] AC 490, referG
~~
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SUPREME COURT REPORTS
(1989] Supp. 2 S.C.R.
3.1 The present case is one where the Govt. of India only represented the victims as a party" and did not adjudicate between the
victims and the UCC. It is the court which would adjudicate the rights
of the victims. The representation of the victims by the Government of
India cannot be held to be bad, and there is and there was no scope of
violation of any principle of natural justice. [670B]
3.2 The connotation of the term "parens patria" differs from
country to country, for instance, in England it is the King, in America
it is the people, etc. According to Indian concept parens patria doctrine
recognised King as the protector of all citizens as parent. The Government is within its duty to protect and to control persons under disability. Conceptually, the parens patriae theory is the obligation of the
C
State to protect and take into custody the rights and privileges of its
citizens for discharging its obligations. Our Constitution makes it
imperative for the State to secure to all its citizens the rights
guaranteed by the Costitution and where the citizens are not in a position to assert and secure their rights, the State must come into picture
0
and protect and fight for the right of the citizens. The Preamble to the
Constitution, read with the Directive Principles contained in Articles
38, 39 and 39A enjoins the State to take up these responsibilities. It is
the protective measure to which the social welfare state is committed. It
is necessary for the State to ensure the fundamental rights in conjunction with the Directive Principles of State Policy to effectively discharge
E
its obligation and for this purpose, if necessary, to deprive some rights
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and privileges of the individual victims or their heirs to protect their
rights better and secure these further. [638E-H; 639AJ
3.3 The UCC had to be sued before the American courts. The
tragedy was treated as a national calamity and the Govt. of India had
the right, and indeed the duty, to take care of its citizens, in the exercise
of its parens patriae jurisdiction or on principles analogous thereto.
After having statutorily armed itself in recognition of such parens
patnae right or on principles analogous thereto, it went to the American
Courts. No other person was properly designed for representing the
victims, as a foreign court had to recognise a right of representation.
The Govt. of India was permitted to represent was permitted to represent the victims before the American courts. Private plaintiffs were
also represented by their attorneys. The order of Judge Keenan permitted the Govt. of India to represent the victims. If there was any
remote conflict of interests between the Union of India and the victims
from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice-that no
man should be Judge in his own case. [669C-F]
C.L. SAHU v. U.0.1.
603
3.4 The Act in question has been passed in recognition of the
right of the sovereign to act as parens patriae. The Government of India
in order to effectively safeguard the rights of the victims in the matter of
the conduct of the case was entitled to act as parens patriae, which
position was reinforced by the statutory provisions, namely the Act. It
has to be borne in mind that conceptually and jurisprudentially, the
doctrine of parens patriae is not limited to representation of some of the
victims outside the territories of the country. It is true that the doctrine
has been so utilised in America so far. Where citizens of a country are
victims of a tragedy because of the negligence .of any multinational a
peculiar situation arises which calls for suitable effective machinery to
articulate and effectuate the grievance and demands of the victims, for
which the conventional adversary system would be totally inadequate.
The State in discharge of its sovereign obligation must come forward.
The Indian State becanse of its constitutional commitment is obliged to
take upon itself the claim of the victims and to protect them in their
hour of need. [6588-F)
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3.5 There is no bar on the State to assume responsibilities analogous to parens patriae to discharge the State's obligations under the
Constitution. What the Central Government has done in the instant
case seems to be an expression of its sovereign power. This power is
plenary and inherent in every sovereign state to do all things which
promote the health, peace, moral, education and good order of the
people and tend to increase the wealth and prosperity of the State.
E
Sovereignty is difficult to define. By the nature of things, the State
Sovereignty in these matters cannot be limited. It has to be adjusted to
the conditions touching the common welfare when covered by legislative
enactments. This power is to the public wh~t the law of necessity is to
the individnal. It is comprehended in the maxim sa/us populi suprema
/ex-regard for public welfare is the highest law. It is not a rule, it is an
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evolution. This power has always been as broad as public welfare and as
strong as the arm of the stat~, this can only be measured by the legislative will of the people, subject to the fundamental rights and constitutional limitations. This is an emanation of sovereignty and it is the
obligation of the State to assume such responsibilities and protect its
citizens. l658G-H; 659A-CJ
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3.6 In the instant case, the victims cannot be considered to be any
match to the multinational companies or the Government with whom in
the conditions that the victims or their representatives were after the
disaster physically, mentally, financially, economically and also because
of the position of litigatimi would have to contend. In such a situation of
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604
SUPREME COURT REPORTS
[1989] Supp. 2 S.C.R.
A
predicament the victims can legitimately be considered to be disabled.
They were in no position by themselves to look after their own interest
effectively or purposefully. In that background, they are people who
needed the State's protection and should come within the umbrella of
State's sovereignty to assert, establish and maintain their rights against
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the wrong doers in this mass disaster. In that perspective, it is jurisprudentially possible to apply the principle of parens patriae doctrine to the
victims. But quite apart from that, it bas to be borne in mind that in this
case the State is acting ou the basis of the Statute itself. For the authority of the Central Government to sue for and on behalf of or instead in
place of the victims, no other theory, concept, or any jurisprudential
principle is required than the Act itself. The Act empowers and substitutes the Central Government. The victims have been divested of their
rights to sue and such claims and such rights have been vested in the
Central Government. The victims have been divested because the
victims were disabled. The disablement of the victims vis-a-vis their
adversaries in this matter is a self evident factor. Even if the strict
application of the 'parens patriae' doctrine is not in order, as a concept
D
it is a guide. The jurisdiction of the State's power cannot be circumscribed by the limitations of the traditional concept of parens patriae.
Jurisprudentially it could be utilised to suit or alter or adapt itself to the
changed circumstances. In the situation in which the victims were, the
State had to assume the role of a parent protecting the rights of the
victims who must come within the protective umbrella of the State and
E
the common sovereignity of the Indian people. The act is an exercise of
the sovereign power of the State. It is an appropriate evolution of the
expression of sovereignty in the situation that had arisen. It has to be
accepted as such. [685C-H]
3. 7 The concept of parens patriae can be varied to enable the
F
Government to represent the victims effectively in domestic forum if the
situation so warrants. There is no reason to confine the 'parens patriae'
doctrine to only quasi-sovereign right of the State independent of and
behind the title of the citizen. [692B-C]
3.8 The power to compromise and to conduct the proceedings are
G not uncanalised or arbitrary. These were clearly exercisable only in the
ultimate interests of the victims. The possibility of abuse of a statute
does not impart to it any element of invalidity. [659C-D]
E.P. Royappa v. State of Tamil Nadu, [1974] 2 SCR 348; Menaka
Gandhi v. Union of India, [1978] 2 SCR 621; R.D. Shetty v. InternaH tional Airport Authority of India, [1979] 3 SCR 1014 followed.
C.L. SAHU v. U.U.1.
605
Ram Saroop v. S.P. Sahi, [1969] 2 Suppl. SCR 583 relied ou.
A
Budhkaran Chankhani v. Thakur Prasad Shah, AIR 1942 Col
311; Banku Behari Monda/ v. Banku Behari Hazra, AIR 1943 Cal 203;
Medai Dalavoi T. Kumaraswamy Mudaliar v. Medai Dalavoi Rajammal, AIR 1957 Mad. 563 approved.
B
State of U.P. · v. Poosu, [1978] 3 SCR 1005; K.M. Nanavati v.
State of Bombay, [1961] l SCR 497; Ram Gopal Sarubai v. Smt.
Sarubhai & Ors., [1981] 4 SCC 505; India Mica & Micanite Industries
Ltd. v. State of Bihar & Ors. [1982] 3 SCC 182; Alfred L Snapp &
Soninc. v. Puerto Rico, 458 US 592 73, Ed. 2d 995, 102 s. ct. 3260; Stute
of Georgia v. Tennessee Copper Co., 206 US 230, 51L.Ed.1038 27 s.
,t. 618, referred to.
B.K. Mukherjea on Hindu Religious and Charitable Trusis,
Tagore Law Lectures, Sth Edu. p. 404; Words & Phrases, permanent
Edn. vol. 33 p. 99; Black's Law Dictionary, 5th Edn. 1979, p. 1003;
Weever's Constitutional Law, p. 490; American Costitutional Law by
Lawrence H. Tribe 1978 Edn. para 3.24, referred to.
4.1 Section 3 provides for the substitution of the Central Government with the right to represent and act in place of (whether within or
outside India) every person who has made or is entitled to make, a claim
in respect of the disaster. The State has taken over the rights and claims
of the victims in the exercise of sovereignty in order to discharge the
constitutional obligations as the parent and guardian of the victims who
in the situation as placed needed the umbrella of protection. Thus, the
State has the power and jurisdiction and for this purpose unless the Act
is otherwise unreasonable or violative of the constitutional provisions
no question of giving a hearing to the parties for taking over these rights
by the State arises. For legislation by the Parliament, no prin~iple of
natural justice is attracted provided such legislation is within the competence of the legislature. Indeed the present Act is within the competence of the Parliament. Section 3 makes the Central Government the
dominus litis and it has the carriage of the proceedings, but that does
not solve the problem of by what procedure the proceedings shOuld be
carried. [692A-D]
4.2 Section 4 means and entails that before entering into any
settlement affecting the rights and claims of the victims some kind of
notice or information should be given to the victims. I 699D J
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[ 1989] Supp. 2 S.C.R.
4.3 Sections 3 and 4 are categorical and clear. When the expression is explicit, the expression is conclusive, alike in what it says and in
what it does not say. These give the Central Government an exclnsive
right to act in place of the persons who are entitled to make claim or
have already made claim. The expression 'exclusive' is explicit and
significant. The exclusivity cannot be wittled down or watered down.
The said expression must be given its foll meaning and extent. This is
corroborated by the use of the expression 'claim' for all purposes. If
such duality of rights are given to the Central Government alongwith
the victims in instituting or proceeding for the realisation or the
enforcement of the claims arising out of Bhopal gas leak disaster, then
that would be so cumbersome that it would not be speedy, effective or
equitable and would not be the best or more advantageous procedure
C for securing the claims arising out of the leakage. [683A-C]
4.4 Sections 3 and 4 of the Ad should be read together alongwith
other provisions of the Act and in particular s.ections 9 and II of the
Act. These should be appreciated in the context of the object sought to
D be achieved by the Act as indicated in the Statement of objects and
Reasons and the Preamble to the act. The Act was so designed that the
victims of the disaster a.re fully protected and the claims of compensation or damages for loss of life or personal injuries or in respect of other
matters arising out of or connected with the disaster are processed
speedily, effectively, equitably and to the best advantage of the claimants.
E Section 3 of the Act is subject to other provisions of the Act which includes
Sections 4 and II. Section 4 of the Act opens with non-obstante clause,
vis-a-vis, section 3 and, therefore overrides section 3. [659G-H; 660A-B]
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4.5 In the instant case, the Government 11f India is only capable to
represent the victims as a party. The adjudication of the claims would
be done by the Court. The doctrine of •Bona fide Representation' as
also 'de facto validity' are not applicable to the present case. [690F]
Basheshar v. Income Tax Commissioner, AIR 1959 SC 149; In re Special Courts Bill, [I979] 2 SCR 476; A.R. Antulay v. R.S. Nayak &
A'nr., [1988] 2 SCC 602; Ram Krishna Dalmia v. Tendulkar, [1955]
-
·.
G SCR 279; Ambika Prasad Mishra v. State of U.P. & Ors. etc. [1980] 3
,_,
SCR 1159; Bodhan Chowdhary v. State of Bihar, [1955] 1 SCR 1045;
Lakshmi Kant Pandey v. Union of India, [1984] 2 SCR 795; Mis
Mackinnon Mackenzie & Co. Ltd. v. Audrey D' Costa and Anr.,
[I987] 2 SCC 469; Sheela Barse v. Secretary, Children Aid Society &
Ors., [1987] l SCR 870; Gokaraju Rangaraju v. State of A.P., [1981] 3
H SCR 474; Pushpadevz M. Jatia v. M.L. Wadhwan. [1987] 3 SCC 367;
•
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C.L. SAHU V, IJ.0.1.
607
Mis Beopar Sahayak (P) Ltd. & Ors. v. Vishwanath & Ors., [1987] 3
SCC 693; Dharampal Singh v. Director of Small Industries Services &
Ors., AIR 1980 SC 1888; N.K. Mohammad Sulaiman v. N.C. Mohammed Ismail & Ors., [1966] 1 SCR 937; Malkariun Bin Shidrammappa
Pasare v. Narhari Bin Shivappa & Anr., 27 IA 216, referred to.
Black's Law Dictionary 5th Edn. p. 437, referred to.
5. The restrictions or limitations on the substantive and procedural rights in the Act will have to be judged from the point of view of
the particular Statute in quetion. No abstract rule or standard of
reasonableness can be applied. That question has to be judged having
regard to the nature of the rights alleged to have been infringed in this
case, the extent and urgency of the evil sought to be remedied, disproportionate imposition, prevailing conditions at the time, all these facts
will have to be taken into consideration. Having considered the background, the plight of the impoverished, the urgency of the victims'
need, the presence of the foreign contingency lawyers, the procedure of
settlement in USA in mass action, the strength of the foreign multinationals, the nature of injuries and damages, and the limited but significant right of participation of the victims as contemplated by s. 4 of the
Act, the Act cannot be condemned as unreasonable. [684C-E]
State of Madras v. V. G. Row, [1952] SCR 597, referred to.
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6.1 In view of the principles settled by this Court and accepted all
over the world in a case of this magnitude and nature, when the victims
have been given some say by Section 4 of the Act, in order to make that
opportunity contemplated by section 4 of the Act, meaningful and effective, it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any
F
conclusion in respect of any settlement. How that opportunity should be
given, would depend upon the particular situation. Fair procedure
should be followed in a representative mass tort action. l696E-FJ
6.2 One assumption under which the Act is justified is that the
victims were disabled to defend themselves in an action of this type. If
G
that is so, then the Court cannot presume that the victims were a lot,
capable and informed to be able to have comprehended or contemplated
the settlement. In the aforesaid view of the matter notice was necessary.
The victims at large did not have the notice. The Central Government
as the representative of the victims must have the views of the victims
and place such view before the court in such manner it considers necesH
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SUPREME COURT REPORTS
[1989] Supp. 2 S.C.R.
sary before a settlement is entered into. If the victims want to advert to
certain aspect of the matter during the proceedings under the Act and
settlement indeed is an important stage in the proceedings, opportunities must be given to the victims. Individual notices may not be necessary. The Court can, and should in such situation formulate modalities
of giving notice and public notice can also be. given inviting views of the
victims by me help of mass media. However, it is not necessary that such
views would require the consent of all the victims. [698B-C; 698G-H; 699A]
6,3 One of the important requirements of justice is that people
affected by an action or inaction should have opportunity to have their
say. That opportunity the victims have got when these applications were
heard and they were heard after utmost publicity and they would have
C further opportunity when review application against the settlement
would be heard. [700G-H; 701A]
7. I The Act does not expressty exclude tne application of the
Code of Civil Procedure. Section I I of the Act provides the overriding
D effect indicating that anything inconsistent with the provisions of the
Act or in other laws including-the Civil Procedure Code should be ignored
and the Act should prevail. Strictly speaking, Order I Rule 8 will not
apply to a suit or a proceeding under the Act. It is not a case of one
having common interest with others. Here the plaintiff, the Central
Government has replaced and divested the victims. [696H; 697A-BJ
E
7 .2 In the instant case, there is no question of abandonment as
such of the suit or part of the suit, the provisions of order XXIII Rule I
would also not strictly apply. However, Order XXIII Rule 3H of the
Code is an important and significant pointer and the principles behind
the said provision wrndd apply to this case. The said rule 3B provides
F
that no aweement of compromise in a representative suit shall be
entered into without the leave of the Court expressly recorded in the
proceedings; and sub-rule (2) of rule 3B enjoins that before grantini:
such leave the court shall give notice in such manner as it may think fit
in a representative action. Representative suit has been defined under
Explaination to the said rule vide clause (d) as any other suit in which
G the decree passed may, by virtue of _the provisions this Code or of •ny
other law for the time being in force, bind any person who is not named
as party to the snit. Indubitably the victims would be bound by the
settlement thoul!h not named in the suit. This is a position conceded by
all. If that is so, it would be a representative suit in terms of and for the
purpose of Rule 3H of Order XXIII of the Code. lf the prmciples of this
H
rule are the principles of natural justice then we are of the opinion that
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C.L. SAHU v. U.0.I.
609
the principles behind it would be applicable; and also that section
4 of the Act should be so construed in spite of the difficulties of the
process '!f notice and other difficulties of making "infOrmed decision
making process cumbersome". ,l697C-G]
7 .3 Inasmuch as section 4 of the Act had given a qualified right of
participation to the victims, there cannot be any question of violation of
the principles of natural justice. The scope of the application of the
principles of natural justice cannot be judged by any strait jacket
formula. l662G-HJ
R. Viswanathan v. Rukn-ul-Mulk Syed Abdul Wajid, [1963] 3
SCR 22; M. Narayanan Nambiar v. State of Kerala, [1963] Supp. (2)
724; Chintaharan Chose & Ors. v. Gujaraddi Sheik & Ors., All<
1951 Cat. 456; Ram 'Sarup v. Nanak Ram, AIR 1952 All. 275;
referred to.
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8. The Act has to he understood that it is in respect of the person
responsible, being the person in-charge-of the UCIL and the parent
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company U CC. This interpretation of the Act is further strengthened
hy the fact that a 'claimant" has been defined in clause (c) of Section 2
as a person who is entitled to make a claim and the expression ''person!'
in Section 2(e) in~ludes the Government. TherefOre, the Act proceeded
on the assumption that the Government could be a claimant being a
person as such. [690A-B]
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9. I The fact that the provisions of the principles of natural justice
have to be complied with, is undisputed. This is well-settled by the
various decisions of the Court. The Indian Constitution mandates that
clearly, otherwise the Act and the actions would be violative of Article
14 of the Constitution and would also be destructive of Article l9(l)(g)
F
and negate Article 21 of the Constitution by denying a procedure which
is just, fair and reasonable. [693D-E]
9.2 Rules of natural justice are not embodied rules. Hence, it was
not possible to make an exhaustive catalogue of such rules. Audi
alteram partem Is a highly effective rule devised by the Courts to ensure
G
that a statutory authority arrives at a just decision and it is calculated to
act as a healthy check on the abuse or niisuse of power. The roles of
natural justice can operate only in areas not covered by any law validly
made. The general prineiple as distinguished from an absolute rule of
uniform application is that where a statute does not in terms exclude the
rule of prior hearing but contemplates a post-decisional hearing
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SUPREME COURT REPORTS
[1989] Supp. 2 S.C.R.
amounting to a full review of the original order on merits then such a
statute would be construed as excluding the audi alteram partem rule at
the pre-decisional stage. If the statute conferring the power is silent
with regard to the giving of a pre-decisional hearing to the person
affected the administrative decision after post-decisional hearing was
good. l694A-D]
9.3 In the instant case, no question of violation of the principle of
natural justice arises, and there is no scope for the application of the
principle that no man should be a Judge in his own cause. The Central
Government was not judging any claim, but was fighting and advancing
the claims of the victims. The adjudication would be done by the courts,
and therefore, there is no scope of the violation of any principle of
C
natural justice. [688G-H; 689A-B]
Menaka Gandhi v. Union of India, [1978] 2 SCR 621; Olga Tellis
v. Bombay Municipal Corporation, [1985] Supp. 2 SCR 51; Union of
India v. Tulsi Ram Patel, [1985] Supp. 2 SCR 131; Swadeshi Cotton
D Mills v. Union nf India, [1981] 2 SCR 533, relied on.
Ganga Bai v. Vijay Kumar, [1974] 3 SCR 882; S.L. Kapoor v.
Jagmohan, [1981] l SCR 745; Sangram v. Election Commission, [1955]
2 SCR l, referred to.
E
10. Though not expressly stated, the Act proceeds on 'the major
inarticulate premise'. It is on this promise or premise that the State
would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the
victims on their own. If it is only so read, it can only be held to be
constitutionally valid. It has to be borne in mind that the language of
F
the Act does not militate against this construction but on the contrary.
Sections 9, 10 and the scheme of the Act suggest that the Act contains
such an obligation. If it is so read, then only meat can be put into the
skelton of the Act making it meaningful and purposeful. The Act must,
therefore, be so read. This approach to the interpretation of the Act can
>,
legitimately be called the 'constructive intution' which is a permissible
G mode of viewing the Acts of Parliament. The freedom to search for 'the
spirit of the Act' or the quantity of the mischief at which it is aimed
(both synonymous for the intention of the parliament) opens up the
possibility of liberal interpretation "that delicate and important branch
of judicial power, the concession of which is dangerous, the denial
ruinous". Given this freedom it is a rare opportunity though never to
H
be misused and challenge for the Judges to adopt and give meaning to
C.L. SAHU v. U.0.1.
611
the act, articulate and inarticulate and thus translate the intention of
the Parliament and fulfil the object of the Act. After all, the Act was
passed to give relief to the victims, who, it was thought, were unable to
establish their own rights and fight for themselves. [687E-H; 688AJ
11.1 The circumstances that financial institutions held shares in
the UCIL would not disqualify the Government of India from acting as
parens patriae and in discharging its statutory duties under the Act. The
suit was filed only against the UCC and not against UCIL. On the basis
of the claim made by the Government of India, UCIL was not a necessary party. It was suing only the multinational based on several legal
grounds of liability of. the UCC, inter alia, on the basis of enterprise
liability. If the Government of India had instituted a suit against UCIL
to a certain extent it would have weakened its case a.gainst UCC in view
of the judgment of this Court in M.C. Mehta's case. [668H; 669A-B]
M.C. Mehta v. Union of India, [1987] I SCR 819, referred t~.
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11.2 Even if there was any remote conflict of interests between
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the Union of India and the victims on account of the sharesholding,
doctrine of necessity would override the possible violation of the principles of natural justice. T669FJ
Kasturilal Ralia Ram Jain v. State of UP, [1965] I SCR 375; State
of Rajasthan v. Vidyawati, [1962] 2 Supp. SCR 989; J. Mahapatra &
E
Co. & Anr. v. State of Orissa & Anr., [1984] 4 SCC 103, referred to.
Halsbury's Laws of England, Vol. I, 4th Edn. para 73 Smith's
Judicial Review of Administrative Action, 4th Edn. pp. 276-277;
Natural Justice by G.A. Flick, [1979] Edn. pp. 138-141, referred to.
12. The Act does not create new causes of action or create special
courts. The jurisdiction of the civil coutt to entertain suit would still
arise out of section 9 of the CPC and the substantive cause of action and
the nature of the reliefs available would also continue to remain
unchanged. The only difference produced by the •provisions of the
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.Act would be that instead of the suit being filed by the victims themG
. selves the suit would be filed by the Central Government on their
behalf. [65SFJ
13. Normally, in measuring civil liability,. the law has attached
more importance to the principle of compensation than that of punishment. ·Penal redress, however, involves both compensation to the
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SUPREME COURT REPORTS
[1989] Supp. 2 S.C.R.
person injured and punishment as deterrence. The Act, as such does DOI
abrigde or curtail damage or liability whatever that might be. So the
challenge to the Act on the ground that there has been curtailment or
deprivation of the rights of the victims which is unreasonable in the
situation is unwarranted and cannot be sustained. [680G-H; 68IA-F]
Roshanlal Kuthiala & Ors. v. R.B. Mohan Singh, Oberoi (1975) 2
SCR 491; Nandram Heeralalv. Union of India & Anr., AIR 1978 )\1.P,
209; Ryland v. Flatcher, (1868) Vol 3 LR E & I Appeal Cases 330;
Rookes v. Barnard, [1964] AC 1129, referred to.
Salmond's Law of Torts, 15th Edn. p. 30, referred to.
14. The Act in question does not purport to deal with the criminal
liability, if any, of the parties or persons concerned nor it deals with any
of the consequences flowing from those. This position is clear from the
provisions and the preamble to the Act. [636FJ
IS.