CHAPTER—VI

BHOPAL GAS TRAGEDY. AIR POLLUTION AND THE LAW

A.Introduction

The biggest ever environmental dis&ster that

history has recorded so far due to leakage of a 'Kilar Gas’ (MIC)

from the Union Carbide Pesticide Plant, early in the morning of

2nd December 1984, got clamped down on otherwise quite township

of Bhopal. The tragedy was large in magnitude as more than 3000

persons died instantaneously and lakhs of people suffered from

different ailments including blindness, abortion and respiratory

troubles etc. Even the medical institutions were in a 'fix’ that

what to do or not? It appears that there was complete lack of

knowledge to the doctors in our country regarding the possible

treatment of MIC gassasination and its after effects.

8. Bhopal Gas Tragedy: 'Bhoposhima of India*

The gravity and magnitude of the tragedy can be

further Inferred from some of the 'Headlines’ reported in the

National Dallies during the month of December,1984. Some.of these

are reproduced below :~

"POISON GAS KILLS 300

4 factory men arrested1.

"POISONOUS GAS KILLS 350 IN BHOPAL

1. The Tribune (Chandigarh) Dec. 4, 1984.

348
 o
Tragedy due to leak from factory tank"™
"GAS/MsAGLDY TOLL CROSSES 1000"3

gv%?j£)&ly a minute-and no claimants"4

" Union Carbide to check plant safety"5

"Horror at Bhopal"6

"More victims hospitalized”

Gas Poisoning toll mounts to 160Q"8

Carbide bluffed authorities"8

CBI Seizes papers from gas plant,"8

Carbide Chairman refused entry"10

Top Carbide brass held, Andersson released' •11

"Govt.to file 156 bn. dollars suit in U.S.

Court"12

Union Carbide sued for

World biggest ever claim"4''"

Carbide misled doctors on MIC Nature"14

Cured gas Victims suffering relapse"15

Carbide shifts blame on Indians."16

2. The Times of India (New Delhi) Dec. 4, 1984.

3. The Hindustan Times (New Delhi) Dec. 5, 1984.
4. Ibid.
5. The Times of India (New Delhi) Dec. 5, 1984.
6. Supra n. 3.
7. The Times of India (New Delhi) Dec.- 6, 1984.
8. The Hindustan Times (New Delhi) Dec, 7, 1984.
9. The Tribune (Chandigarh) Dec. 7, 1984.
10. Ibid.
11. The Times of India (New Delhi Dec. 8, 1984.
12. The Times of India (New Delhi) Dec. 9, 1984.
13. The Hindustan Times (New Delhi) Dec. 9, 1984.
14. The Times of India (New Delhi) Dec. 11, 1984.
15. Ibid.
16. The Times of India (New Delhi) Dec, 12, 1984.

349
 MASS EXODUS FROM BHOPAL-A11 Round effort
to ensure safety "^

Lawyer "Cashing in" on gas.tragedy“18

The illustrated weekly in its issue of 17th Feb.,

1985 published a " Special Report"19in which the unfortunate

disaster was narrated as under

The G.T. Express rolls almost surrep­

titiously into Bhopal at rise in the morning.
There is no hustle and bustle, instead an eric
silence, as if the entire city is till fast
asleep. Even 40 days after the ghastely trage­
dy, Bhopal has not got back its breath. There
are no coolies to lift, luggage, the railway
station is bang in the middle of the affected
area and scores of- people were killed that
fateful night. THOSE COOLIES WHO HAVE NOT
SINCE LED THE CITY ARE TOO WEAK TO CARRY HEAVY
LOADS.20

The author' of the special Report further

states;~1

I check into the. same hotel where Tapan Bose

and Suhasini Mulay, two independent film
makers have been staying for over a month.
They have shot some 250 minutes of 16mm film
and should shortly have an edited version
ready. The two made, 'AN INDIAN STORY’, a
documentary about the Bhagai pur blindings a
few years ago. This time, they have got neck
deep in the happenings at Bhopal,

17. The Times of India (New Delhi) Dec.' 15, 1984.

18. The Tribune (Chandigarh) Dec. 16, 1984.
19. Darryl D 'Monte’^Breathless in Bhopal", Illustrated Weekly
Feb., 17, 1985.
SO. Ibid
21- Ibid.
22. Ibid.

350
 The Kales Foundation23 came out with a good

work,24 on causes, consequences and constructive solutions for

the Bhopal Gas Tragedy in 1985. The Book stated25 that the cloud,

called appropriately by some Indian newspapers,'the killer

cloud," emerged in full hissing fury close to 1.00 A.M.26 from a

venting tower, after passing through an apparatus designed to

render harmless, the poisonous gas methylisocynate (MIC). ...MIC

has a density twice that of water, yet the cloud, both wind

propelled and self propelled, is responsible for devastation

while training its vapors along the ground.2^

Factual story of the gassasination of Bhopal’s

innocents was published by a news magazine28 that death came life

a thief in the middle of the night when the storage tanks ...

started leaking deadly methylisocyanate gas on December 2, 1984.

Within minutes, a thick fog had engulfed Jayaprakash Nagar, a

vast slum which has sprung up in front of the factory and the

residents starting coughing. First, it was persistant coughing

and Irritation of the eyes and then thousands gasped by air as

the deadly gas, a derivative of cyanide, deactivated the Haemo­

globin In Blood.

23. Kales Foundation C/o C.I.P.A., Simple 9A, 777 United nations
Plaza, New York, 10017, N.Y., U.S.A.
24. De Grazia, Alpred., A Cloud over Bhopal. (1985)
(Chandigarh),
25. Ibid at 11.
26. The Time of leakage is confirmed by The Tribune (Chandigarh)
4th December., 1984 and The Times of India (New Delhi)
4th Dec,., 1984.
27. Supra n. 24. pp. 11-12.
28. Anand R.P., K. Rahmatullah and Bhatt, S. (Edit.) Law.
Science and Environment (1987) pp. 28-29.

351
 By 2.30 a.m. on Monday, December 3, 1984) Bhopal

was in panic. The dead lay unattended as thousands fled their

homes into the cold countryside. Man, women and children were

running away from.the city. Some escaped from the old city to the

new city. Some walked, admirably enough even under such pressure,

as long as 20 Kms. But some failed to reach places of safety.

They died on their way. The affluent rushed out in their Vehicle.

VIP’s were fastest to get out of Bhopal. At the railway station

few survived. The Station Superintendent Harish Durve, died in

his chair in his room where the body of the booking clerk was

also found. The control room had become a gas chamber where all

the employees had fallen uncounscious. All traffic had stopped

and for eight hours the station was like a graveyard.

A pall of gas was over Bhopal followed by a pall

of gloom. The tragedy took a toll29 of over 3000. human lives and

a similar number of cattle. Five thousand people were seriously

affected and over 1,00,000 were fallen ill. The majority of the

victims were children. A large number of pregnant woman lost

their babies.30 Many thousands became blind....31 of Bhopal’s

population of 1 million (unofficial figure is 1.2 million) over

5,00,000 had fled in one night. The surrounding towns do not have
'K'y
the facilities to absorb such an exodus,v~

29. See also Supra n. 24. p. 36.

30. Id., at 30 See also 'Gas caused abortion in animals,’
The Tribune (Chandigarh), Dec. 18, .1984.
31. Supra n. 28, p. 194.
32. Ibid. See also, The Hindustan Times (New Delhi)
Dec.5, 1984.

352
 The Union Carbide factory had become 'Yama’ for

the citizens of Bhopal, not that they did not have suspicious or

flairs about the chemicals being used in the plant. Earlier also

there had been cases of dangerous gas leakages from the factory.

But the company’s political clout and high level influence had

saved it every time. Ministers, who used to assure the people

©very time about the safety of the city, were the first to aban­
don it.35

The terms are coined and the definitions are told,

but the agony of the people who have suffered can not be measured
by way of any calculus. Justice V.R. Krishna Iyer has stated34

the disaster in following words :

The ghastly assasination of Indira Gandhi and

the ghastlier gassasinition of Bhopal’s
innocents were two treacherous tragedies of
terror and horror too macabre for Indians to
suffer in succession. The lattei— I call it
*Bhoposhima’ being a chemical mini-Hiroshima-
inflicted by a multinational corporation based
in the united states, sprayed savage death on
those macabre city as its denizens by dead
asleep in freezing slums; and when they suffo­
catingly awoke at past mid-night, there arose
a scene of woe like of which, in the world’s
industrial chronicle, no eye had seen, no
heart conceived and no human tongue could
adequately tell....35

A tank of MIC (Methyl Iso-cynate)gas Is

no less than a neutron bomb capable of fusion
and explosion if water is mixed in It. People
are killed and property remain unaffected.

33. Supra n. 28, p. 194, See also, The Hindustan Times

(New Delhi) Dec, 7, 1984.
34. Anand, R.P. and Others, op.cit. Supra, n. 28.
35. Ibid.

353
 "It is a wonder that terrorist’s have not
targetted MIC installations, but perhaps
untrained employees in charge of unsafe sys­
tems can also do the job".w°

Methyl© Iso Cynate (CH^HCq) is an ester of

Iso-cyanic Acid. It is highly volatile and slightly heavy than

air and is soluble in water. It Is prepared from phosgene (com­

monly known as wartime gas). MIC is an important raw material for

the manufacturing of pesticides. It is reported37 that inhalation

of a dose of one-tenth of a gram of MIC is sufficient to kill a

man.

C. Medical Controversies regarding Treatment of Gas-

affected victims:

But the scene is not going to be completed, If the

later half of the story is not told. There were reported news

that no body know how the patients who were suffering from MIC

can be cured.

To quote08 the after-break story:

Every one had to conclude: there is no speci­

fic antidote for MIC poisoning and the Chief

Medical Officer of Union Carbide (India)

Limited and the plant manager were unprepared

for any care, let alone a quarter of million

cases, of MIC poisoning seems to have become

evident in the beginning of the crises. "An

36. Supra n. 24. p. 14.

37. Dev Kumar, C., 'The Killer Gas,’ The Hindustan Times.
(New Delhi) Dec. 7, 1984.
38. Supra n. 24, p. 27.

354
 irritant", a potent tear gas", there were the

type of pharases applied, not only in India

but also in the United States, when the dead

begar to pile up, they could not believe their

own knowledge of what the tank contained. They

wondered aloid whether some strange contami-

tant or reactant had somehow found its way

into the tank and had proved to be highly

toxic.

Amidst confusions and controversies

enquiries were made by UCC(I) Ltd., Bhopal

from U.C.L. America, regarding treatment of

patients, A return telex was received which is

reproduced4^ below."

From Dr. Avashia, Medical Director Institute

Plant: urgent pass this into, to doctors in

Bhopal,

1. Treat patients with respiratory problems from rnethyle

isocynate by intravenous injection of hydrocortisone of predisone

Igm immediately and 24 hour. After also give oxygen and suppor­
tive treatment.4^

2. -If cyanide poisoning is present administer sodium

39. Ibid. See also "Carbide Misled Doctors on MIC Nature"

The Times of India (New Delhi) Dec., 11, 1984.
40. Supra n. 24, p. 27.
41. Ibid.

355
nitrite and sodium thiosulphate; If the patient does not respond

to the above nitrite administration, or If severe exposure is

• 49
suspected, administer intravenously 0.3 gm. sodium nitrite...

•Bhopal after the tragedy became a good site of

research in the fields of Toxicology and Biochemistry. Doctors

were decided on both the symptoms of MIC Cyanide poisoning and

the treatment. The Union Carbide authorities were tightlipped and

rather bluffed45 the people which further increased the agony of

the sufferers.

The Indian Express, (New Delhi) reported44 on the

first anniversary of the disaster :

Thousand died immediately after the disaster and

hundred continued to succumb in the days that

followed. It is.now clear that most of these

deaths could have been prevented if prompt

action has been taken by Medical authorities.

But_instead.the.entire medical ...establishment

got emnodled in a controversy .which has had

drastic and even fatal representation for the

gas hit population.45

42. Ibid.
43. Supra n. 14.
44. Prakash, Padma, "Anniversary of a 'Disaster’", Indian
Express. (New Delhi) Dec. 1, 1985.
45. Ibid. See also the Report of the "Looking Beyond",
MAINSTREAM (New Delhi Jan. 5, 1985.

356
 The controversy on the issue of the treatment of

toxic effects of MIC began when a group of doctors doubled the

use of -sodium thiosulphate therapy on the basis of an advice

tendered by a German Doctor. However, the Indian council of

Medical Research (ICMR) came out with conclusive proof regarding

the usefulness of sodium thiosulphate for the gas affected peo­

ple .

Frankly speaking, there was confusion among the

Govt, as well as the non-governmental bodies for taking out the

people from the horror spread after tragedy. The people of Bhopal

were caught between conflicting medical theories, confused volun­

tary agencies confronted by administrative roadblocks at every

step towards relief and rehabitation.46

D. Aftes—Effects of Methyl Iso-cvnate Gassasination:

A number of complications and aftei—effects of MIC

gassasination are scared. A few of them are reported below :

1■ On Human Beings:

Followings are certain effects on human beings;

(a) Cerebral odema

As a result of oxygen deficiency, the persons

affected by gas developed cerebral odema. The children were

severely affected as they had developed neurological disorders.

46. See "Experts divided on disposal of NIC, The Times of India

(New Delhi) Dec.t10, 1984. See also 'Professionals Unfamil­
iar with gas dissater’ The Hindustan Times (New Delhi)
Jan. 4, 1985.

357
Some children also suffered from among other things, jaundice4"7.

(b) MIC.Causes.Abortion:

A study by Me Gill University pharmacologists

reveals that the effect of MIC poisoning may cause recurrent

breathlessness and conjunctivities, the loss of appetite and

taste, the abdominal swellings and the discordination of physical

movement, severe disruption of menstruation in many women and the

occurence of spontaneous abortions. An expert Gynaecologist from

Bombay Shri C.L. Jhaveri expressed views to the various authori­

ties to make available immediately ultrasonography machines and

donplers to dispel fears of delivering malformed babies by preg­

nant mothers affected by MIC48.

The Industrial Toxicology Research Centre

(I.T.R.C.) also feared about the MIC effects on pregnant woman

and therefore came out with certain plans to study the various
aspects of gas poisoning on foetus49.

According to Dr.P.B. Sharma50, several cases of

abortion among animals were reported after MIC poisoning. A

number of' other complications like swollen liver and lymph

glands,, enlarged blood Vessels in brain, enlarged kidney and

47. 'Widespread scare about after effects’. The Times of India

(New Delhi), Dec. 10, 1990. See also Devakumar, C„, "The
Killer Gas, The Hindustan Times (New Delhi) Dec. 7, 1984 and
"Cured gas victims suffering relapse", The Times of India
(New Delhi) Dec. 11, 1984.
48. "Tests on pregnant Women Urge'd", The Hindustan Times (New
Delhi) Jan. 28, 1985.
49. Ibid. See also ^aqui, L.H., "Bhopal Tragedy and After"
The Tribune (Chandigarh) Dec. 7, 1984.
50. Director, State Veterinary Department Bhopal (M.P.).

358
heart with necrotic patches were also found in the autopsy find­
ing of the animals5-*-.

Furthermore, two controversial points were raised

at a 'National Seminar’ held on 17th Feb.,1985 on the theme,

"Lessons from Bhopal" by the, "Poisonous Gas tragedy Front" with

respect to abortion. These are as under52:

(a) Should pregnant mothers in the gas affected localities

in Bhopal be advised to go in for medical termination

of pregnancy55?

(b) Will it be a sound medical advice keeping in view the

possible hazards created by the toxic MIC gas54?

In the opening session of the Seminar, a girl

participant, who claimed to have met a large number of women In

her survey, in the gas affected areas, pointed out that a number

of babies born in January, 95 had problem of a paralysed

limb.Some other children had a bleeding toe and yet a few with

burning eyes. Views were expressed by other participants that

keeping in view the alarming deformities, it may be proper to

advice the pregnant women to go for M.T.P. rather to carry a

retarded or handicapped baby55.

51. 'Gas Caused abortion in Animals’, The Tribune (Chandigarh)

Dec. 18, 1984. See also "Carbide bluffed authorities", The
Hindustan Times (New Delhi) Dec. 3, 1984. "Gas Victims Died
of Drowning", Indian Express (New Delhi) Dec. 7, 1984.
52. 'Focus on hazards to gas victims’, The Hindustan Times (New
Delhi) Feb., 19, 1985.
53. Ibid.
54. Ibid.
55. Ibid. See also, "Gas-hit women urged to undergo MTP, Indian
Express (New Delhi), Feb. 19, 1985.

359
(c) MIC Effects on Eves and Lungs:

According to a report published in the Indian

Express56, more than 100057persons have been blinded by the

poisonous gas which leaked the Union Carbide Plant, Bhopal. The

report Is based upon a door-to-door survey conducted by the Tata

Institute of Social Sciences. The surveyors counted 1064 blind

persons including some cases of partial impairment of vision58.

However, the Madhya Pradesh Government has denied

the reports that the methyl Iso-cynat© gas had blinded any one in

Bhopal. According to an official release, a survey was sponsored

by Govt, and conducted by experts concluded that the report

submitted by the Tata Institute is misfounded and they did not

find even a single case of blindings5^.

An English Daily Newspaper60reported that 28 out

of every 100 survivors above the age of 14 residing In the

vicinity of carbide plant In Bhopal have damaged the lungs be­

cause of MIC exposure on Dec. 2,1984. According to a survey

carried.out by Dr. Ramesh Durawasula a lung expert at the Barods

Medical College (sponsored by Medico Friends Circle, a voluntary

organisation), the lung damage to the residents of Jayaparkash

Nagar (the worst affected area in the Tragedy) was of the 're

56. 'Gas blinded over 1000 people5, Indian Express (New

Delhi) Feb. 15, 1985.
57. Ibid.
58- Ibid.
59. 'Bhopal gas Tragedy damaged lungs of 28 p.c. population5,
The Hindustan Times (New Delhi) May 4, 1985.
60. Ibid.

360
strictive type’ as marked by their inability to fully exhale the
air, Dr. Duravasula further said6i:

The restrictive type of lung damage could

have followed fibrosis (degeneration)of lung
tissues or tiny air sacs (alveols) due to
irritant effect of NIC from cases of pneumo­
nia62 .

2. On Plants and Vegetation:

Dr. R.H. Riccharia, former director of the Rice

Research Institute is of the view that the Bhopal tragedy is

bound to affect growth as well as heredity of the crop and garden

plants because of massive MIC pollution. He further emphasised

that 'nuclear abnormality could occur in growing plants reducing

their size. It was suggested by Dr, Riccharia that it may be

worthwile to conduct a study to test the effects of MIC combina­

tion with oxygen and carbon monoxide on plants63.

E. Causes of the Tragedy

It appears that though the American multinationals

started functioning as early as 1905, the UC(I) Limited was

established under the name Eveready (India)as a Private company.

Its name was changed to National Carbon Company (India) Ltd. in

1941 and to Union Carbide (India) Ltd. in 1959. In 1979, the

company started manufacturing hazardous chemicals like Phosgene,

chiomine Carbonmonoxide and methyl isocynate. In the early

61. Ibid.
62. Ibid.
63. Ibid.
period most of the chemicals were imported from the parent con­

cern in the United States. But later on the company started

manufacturing of these chemicals in Bhopal. The licence was

issued by the Ministry of Industries and Civil Supplies, Govern­

ment of india on grounds of import saving and self sufficiency on

October 31,1975. Certain agreements between Union Carbide of

India Limited and Union carbide Corporation, U.S., were signed to

provide technical knowhow and for the supply of the plant and

machinery for manufacture of MIC-based pesticides. The necessary

permission' under Foreign Exchange Regulation Act was also issued

to the company by the Reserve Bank of India and ultimately in

1980, the plant was actually put into operation.

The plant started posing problems immediately

after its operation on the very first year. But the management,

in order to overcome these problems appointed a few trained

personnel to operate the plant. Very often minor leakages used to

take place. For example, on December 26,1981, a plant operator

died as a result of an accidental leakage of phosgene. Similiarly

on Feb., 9, 1982 again there was phosgene leak and 24 people

horered between life and death for months.

In 1982, a team of Union Carbide experts from the

U.S. highlighted, a series of alarming safety problems in the

Bhopal pesticide plant. The report of these experts, referred,

among other things to the danger of leakage of methyl isocynate.

The Union Carbide (India) Ltd and the Madhya Pradesh Government

362
were accordingly informed. But it appears, that no action was

taken so as to ensure that no further leakages took place by

renovating the plant. There are conflicting views regarding the

causes of the disaster. These are briefly discussed below.

1- Company’s Views:

Mr. Warren Anderson, the top brass of the Union

Carbide blamed the management of union Carbide (India) Limited

for ignoring the measures suggested by the experts of the Union

Carbide (USA) for ensuring plant safety. Mr. Anderson while

releasing the details of the report of experts pointed out that

the team as far back as in June,1982 had pointed out as follows:-

a) That the instrumentation in the plant was inadequate.

b) Feed pipes and safety valves were poor with a high

potential for developing leaks6'**'.

It was alleged by Mr, Anderson that the Bhopal

plant continued the production of pesticides without rectifying

the measures suggested by the Union Carbide (USA) experts. A copy

of the report of the experts was also submitted to the Govt, of

Madhya Pradesh but apparently no action was taken by the Govt, on

the report65.

Furthermore, the State Govt, was again in trouble

when the question of clearance of Carbide plant site was raised

with reference to Bhopal Catastrophe.

64. Ibid.
65. Keswani, R.K., 'Bhopal’s Killer Plant’ Indian Express (New
Delhi) Dec. 9, 1984. See also, 'Unskilled Workers had
cleaned Tank’, The Hindustan Times (New Delhi) Dec. 4, 1984.

363
The documents relating to the permission for site clearance

reveals that the responsibility for location and site clearance

may be fixed on the Town and Country Planning Department as the

hazardous plant was located in apparently residential areas. The

departmental failure can be further established by the fact that

the Union Carbide plant was hot identified as hazardous and

obnoxious to be shifted or relocated to an alternative site

outside the city when the Bhopal Master Plan was approved in

November,1975.

Antesham Qureshy further reports66;

What is more intriguing as revealed by offi­
cial sources, is that the State Department of
Town and Country Planning headed by Mr. M.N.
Such (who recently took premature retirement
as Principle Secretary) was aware of the fact
that the Union Carbide wanted to manufacture
the product based on methyl isocyanate. The
building lay out submitted by the project
officer of Union carbide to the Department of
Town and Country planning in May 1973 clearly
showed the location of the MIC unit and the
MIC storage tanks, besides other structures67.

2. M.P. Pollution Board’s Views:

The M.P. pollution Board, it appears, had granted

the necessary clearance certificate (environmental clearance

certificate) to the Union Carbide, Bhopal, a few weeks before the

tragedy. It was however, alleged, by a top official of the Board

66. 'Did Buch Okay Carbide Plant Site? The Hindustan Times
(New Delhi) Feb. 13, 1985.
67. Ibid.

364
that methyl isocynate (the killer gas) was not a normal.emission
of the carbide.plant and.therefore not monitored at all6®.

Shri V.K. Tiwari, Chairman of the Board revealed

that the normal and regular emission were almost nothing and

possibly it was an accident.

In any case, it is submitted that the responsibil­

ities for the tragedy can be fixed both on the Union Carbide as
well as on the Govt, because of the following facts69;

1. The Government did not take much interest on the report

submitted to it in 1982 by UC (America) wherein it was stated

that the plant does not have proper safety mechanism,

2. Clearance for plant location was Issued by the Government69.

3. Accident earlier occured in the Union Carbide plant were

perhaps not properly Investigated.

4. Following lapses are reported from the UC(I) Limited:

I) Employees who discovered a leak of methyl isocynate

reported it to a supervisor but it was ignored,

ii) In violation of plant procedures, a refrigeration

unit designed to keep the methylisocynate plant cool

and inhibit reactions Involving the chemicals was

68, The Hindustan Times (New Delhi), 3rd Feb., 1985. Sea also,
'Guidelines were voilated’ Indian Express (Hew Delhi) Dec. 4
1984 and Safety Measures were 'lax’, The Hindustan Times
(New Delhi) Dec., 12, 1984.
69. See "Plant Location Violated Rules", The Hindustan Times
(New Delhi) Dec,, 8, 1984. See also "Government Ignored
Warning", Indian Express (New Delhi) Dec., 4, 1984.

365
 shut down by the management several months before the

accident.

iii) There were no effective public warnings of the

disaster. The alarm used in the night of the accident

.was similar or identical to alarms sounded as many as

20 times a week for practice drills and other non­

urgent activities'7^.

iv) Training levels and experience requirements for plant

workers were cut back for budgetary reasons.

v) One of the three safety systems at the plant had been

inoperable for several days and a record was taken

out of service for maintenance several weeks

T • 71
earlier *x.

F. Litigations and the Settlement

The unprecedented leakage of the poisonous gas,

methyl isocyanate (MIC) from the Union Carbide plant at Bhopal

which has caused untold suffering to a number of persons, the

litigation in this behalf and the settlement arrived at, raises

legal questions of far reaching importance. There are briefly

discussed below.

70. B.Praful, "The Alcv/m Without Alert", The Times of India (New
Delhi) Dec. 9, 1984. See also "Two colosalsafety lapses at
plant" The Times of India (New Delhi) Dec. 10, 1984.
71. "Blocking of Control Valve Caused leak" Indian Express
(New Delhi) Dec. 6, 1984.

366
1. Nature of Liability:

The preventive measures could have been taken by

the company in terms of the Air (prevention and control)of pollu­

tion) Act,1981 and the Insectisides Act,1968. Possibly, all that

was needed was to enforce these provisions strictly. In any case,

the State Government could Itself get the measures taken through

its own agencies and recover the cost from the company. The State

Government is also empowered to prosecute the company and Its

Directors and other officers, as all these are constructively

liable under the clause; " Offences by the Company" under the

aforesaid two statutes.

First of all, therefore, the Government officials,

who were responsible for ensuring compliance of these statutory

provisions, but due to inefficiency or negligence, they allowed

the breach- to take place ultimately resulting into gas disaster,

must have been punished,. The course is to be decided by the

Government that is whether the Government wants to proceed under

disciplinary rules or under the criminal law In force. However,

*70
Magraw fixes the responsibility of the disaster on the follow­

ing ' parties.

1. Union carbide India Ltd., on the basis of theory of strict

liability as the company was negligent in operating the plant.

2. The shareholders of the union Carbide (I) Ltd., including

the Carbide (US), as the parent company was negligent with

72. Magraw, "The Bhopal Disaster : Structuring a Solution," 87

University of Columbia Law Review 835 (1986).

367
respect to training of personnel to operate the plant and failing

to a potential warning. The Carbide U.S. is also liable as the

company has to bear the losses of its subsidiary.

3. Some of the victims are liable as they were at fault as they

were living in the vicinity of a dangerous plant.

4. The Union, of India and Government of M.P. and other

regulatory authorities who allowed the company to develop and

carry out its activities in the Town and also for 'not applying

and enforcing the safety standards against the company for

political interference. However, the Union of India may be

shielded by 'Sovereign Immunity’ cover73.

The prime facia liability of the company is dis­

cussed above. Claims of damages are generally founded on certain

rules of common law which have become a part of our law of land.

One of these rules is applicable to hazardous or dangerous arti­

cles such as fire arms, explosives, poison etc, A special duty is

imposed upon those who send forth, make , leaves around such

dangerous articles to takes necessary precautions that they shall

not do any damage to persons who happen to contact with them7^.

A similar rule is based on the land mark decision

of House of Lords in Ry la rids V. Flatchsr75 ■- According to

73. Ibid.
74. Dominion Natural Gas Co. v. Collins and Perkins 1909
AC 640.
75. (1869) LR 3 HL 330.

368
this rule, any person who for his own purposes brings on his land

and collects and keeps there, any thing likely to do mischief if

it escapes, must keep it in at his peril and is answerable for

the damages which is the consequence of its escape.

Followings are the possible exceptions to the

rule^6.

1. Consent of the plaintiff.

2. Common benefit.

3. Act of God.

4. Act of Stranger.

5. Act of Plaintiff.

6. Statutory authority.
In Shriram Case77 the Supreme Court of India has

also discussed the aforesaid rule and has ruled that the afore­

said exceptions are not applicable in India and the hazardous

units are not allowed to plead these exceptions and there.is an

absolute.liability of.these units.

2. Litigation in America:

The Bhopal tragedy is one of the naked drama on

part of the multinational corporation in the third world coun­

tries. Since the number of victims of the tragedy was very high,

76. Winfield & Jolowitz, Tort (1984) pp. 438-448, See also
Bakshi, P.M., Tort Law, Pollution and Corporations, Char
tered Secretary. Feb., 1988, pp. 88-92.
77. M-C. Mehta v. Union of India & Others AIR 1987
SC 1086, at 1099. .
See also Ghosh S. "The Neglected Issues", The Hindustan
Times (New Delhi) Jan. 29, 1935.

369
a number78 of claims were lodged in the fedral district courts of

the United States. After consolidation, these claims were placed

for hearing before Judge John F. Keenan in the Southern District

of New York.

The Judge ruled78;

To retain the litigation in this forum, as
the plaintiffs, (represented by the Union of
India) request, would be yet another example
or imperialism, another situation in which an
established Sovereign inflicted its rules, Its
standards and values on a developing nation80.

Judge John Kenan also criticised the role played by

American lawyers. He Remarked8-1-;

Suffice it to say that those members of'the

American Bar who travelled the 8200 miles to
Bhopal in those months did little to better
the American image In the Third world-or any
i
where , 82 .
elsea

On appeal before the second circuit court of

ApApeals in January,1987, UCC (America) raised an issue that the.

Indian Government has violated the domestic a "minimal due pro­

cess" requirements in freezing its assets during' a planned finan­

cial restructuring of corporation88.

78. 1) Total No. of claimants Examined = 3,34,874.

2) Total number of claims filed :
a) Injured or affected = 6,02,672
b) Live-stock = 539
c) Business loss = 4716
d) Death = 5,673
e) Firms engaged in documentation ~ 84
The data Is based upon the official Information of
Directorate of Gas Claims, 8 ho pa 1 , Ibid
79. Raymond M. Dasis, "The Bhopal Litigation, 29 JILI, .(1987)
p. 330 at 331.
80. Ibid,.
81. Ibid.
82. Ibid.
83 Ibid.

370
3. Litigation in India:

In 1985, the Parliament of India replaced an

ordinance Issued by the President of India i.e. Bhopal Gas Leak

Disaster (Processing of claims) ordinance by an Act84. The Pream­

ble of the Act reads :

" An Act to confer certain powers on the

Central Government to secure that claims
arising out of or connected with the 8hopal
Gas Disaster are dealt with speedily,
effectively, equitably and to best advantages
of the claimants and for matters incidental
thereto."

The Act gives wide range of powers to the Central

Government like representation of victims of the tragedy85 filing

and withdra'wl of suit or proceeding in any court or authority86,

entering into a compromise87, use the powers of a civil courts88,

appointment of Commissioner89, delegation of Union powers to the

state of M.P.90, framing of schemes for registration and process­

ing of claims, disbursal of amounts of compensations91 etc.

In accordance with the laws of land and also the

ruling of the New York District Court, the case came for hearing

before the Bhopal District Court in 1986. The immediate issue for

84. Bhopal Gas Leak Disaster (Processing of Claims) Act., 1985.

85. Id. Section 3 (i).
86. Section 3(2) (a).
87. Id. , Section 3(2)(b), See also section 4 of the Act for
restrictions on the right of representation of parties.
88. Id. Section 5.
89. Id. Section 6.
90. Id. Section 7.
91 . Id. Section 9.

371
the consideration of the court was the interim relief. Initially

the UCC was offering notional sums for the help or nitrine bu

later on the company came out with certain defences and tried t
shift the blame on Indians92. The District Court of Bhopal

keeping in view the above projections, directed the UCC to pay

sum of Rs.350 Crores as interim compensation for the welfare o

the gas victims exercising its Inherent powers under section 15

of Civil Procedure Code.

On revision before the Jabalpur High Court (M.P.

the High Court reduced the. amount of Interim compensation to Rs

250 Crores. Following question were raised before the High Court

(a) That whether the District Court had the jurisdiction t

award interim compensation even before deciding the question a

to liability of the defendant In an action for damages;

(b) That whether the court can award such interim compensatic

under section 151 of the Cods of Civil Procedure.

The High Court gave answer in affirmation so ' fc

as the first question is concerned but In negative regarding t\~

second ques tion„

An appeal was filed on behalf of the UCC agains

the High Court Judgement in the Supreme Court. A cross appeal w£

92. "Carbide shifts blame on Indians", The Times of India (Ns

Delhi) Dec., 12, 1984, "Claim will be dismissed says carbic
chief", The Hindustan Times (New Delhi) Ja. 13, 1985, Unic
Carbide Chief pleads not guilty The Hindustan Times (Ns
Delhi) Feb., 27, 1985. UCC not at fault feels Andersc
Indian Express (Mew Delhi) Feb. 27, 1985; Carbide removir
vital Evidence; The Hindustan Times (New Delhi) March, 2c
1985, 'Carbide blames workers for gas leakage’, The Hindus
tan Times (New Delhi) March 29, 1985.

372
also preferred by the Union of India for the restoration of the

earlier orders relating to interim compensation of Rs. 350

crores. Attorney General, Mr, K. Parasaran appeared on behalf of

Union of India and the UCC was represented by Mr. F.S. Nariman.

4. Order of Settlement:

However, before the hearing could be completed by

a Five Judge Supreme Court. Bench93, a settlement was reached

between the parties. In accordanced with this settlement the

.Government of India accepted $470 m. (Rs, 750 Crores approx. )in

full and final satisfaction of all claims against UCC in the

Supreme Court premises.

The Supreme Court’s order reads9^:

Hearing given our careful consideration for

these several days to the facts and
circumstances of the case placed before us by
the parties in these proceeding, including the
pleading of the parties, the mass of the data
placed before us, the material relating to the
proceeding in the courts in.the United States
of America, the offers and counter-offers made
between the parties at different stages during
the various proceedings,as well as the complex
issues of law and fact raised before us and
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 case is preeminently fit for an overall
settlement between the parties covering all

93. The Bench was consisting of the then chief Justice R.S.
pathak, Justice E.S. Venkataramiah, Justice Rangnath
Mishra and Justice N.O. Ohja (Justice M.H. Kania with­
drew himself as he was holding, Shares of the Company).
94. Union Carbide Corporation v. Union of India & others
1939 (I) SCALE 380.

373
 litigations, claims, rights and liabilities
related to'and arising out of the disaster and
we hold it just, equitable and reasonable to
pass the following order:

We order:

(a) The Union Carbide corporation shall pay a

sum of US Dollars 470 million to the Union of
India in full settlement of all claims, rights
and liabilities relatedqcto and arising out of
the Bhopal Gas disaster -

(b) The aforesaid sum shall be paid by the

Union Carbide Corporation to the Union of
India on or before 31st March,198996.

(c) To enable the effectuation of the

settlement, all civil proceedings related to
and arising out of the Bhopal Gas disaster
shall hereby stand transferred to this court
and shall stand concluded in terms of the
settlement and all criminal proceedings
related to and arising out of the disaster
shall stand quashed wherever these may be
pending97.

A memorandum of settlement shall be filed

before us tomorrow setting forth all details
of the settlement to enable consequential
directions, If any, to issue9”.

2. We may record that we are deeply indebted

to learned counsel for the parties, for the
dedicated assistance and sincere co-operation
they have offered the court during the hearing
of the case and for the manifest reasonable­
ness they have shown In accpeting the terms of
settlement suggested by this.court99.

The Union Carbide Corporation and the Union of

India signed the memorandum of settlement before the Supreme

95. Ibid.
96. Ibid.
97. Ibid.
98. Ibid.
99. Ibid.

374
Court on 23rd March, 1989 in accordance with which the UCC was

required to pay the amount of US $470m.

In accordance with the terms of settlement, all

proceedings pending in or before various courts and authorities

against the UCC stand quashed.

5. Settlement supported in view of delayed Justice

in India.

If the litigation was to proceed on merits in the

District Court of Bhopal, the judge said, it would have taken at

least eight to ten years. Then, an appeal to the High'Court and a

further appeal to the Supreme Court would taken another 10 years.

"We can therefore fairly assume that litigation in India would

have taken around 20 years to reach the finality", the judge said

while upholding the settlement. Under the prevailing circumstanc­

es when the UCC was open to challenge the India court’s decree

before the US court, the relief to the victims would only be

possible in 2010-after 26 years of the tragedy100.

Saying that the court had always taken a pragmatic

approach in dealing with the Bhopal case, the Chief Justice

recalled a US Judge’s saying that " life is not logic but experi­

ence". The judges of his court are men and their hears also bleed
when calamities like the Bhopal occur", he said101.

100. Infra, n. 114 p. 681.

101. Ibid.

375
 Lastly, the court came down heavily on "those who

clamoured for a judgement on merits". There might be some inno­

cent victims who came before the court but were not aware of the

"regmarole of the legal process" the court said," They have been

led to a situation without appreciating their own interest. This

would not be the first instance where people with nothing at

stake have traded in the misery of other"

6. Criticism of the Settlement:

The settlement arrived at between UCI (Limited)

and the Union of India, and approved by the apex court is severe­

ly criticised on the following counts.

(a) Inadequate Compensation:

The judgement of the Supreme Court of India and

the role of Government of India came under heavy criticism on

various grounds. The Government which has put forward a solid

claim of US dollars 3 billion on behalf of the victims and had

refused to enter into an out-of-court settlement to the tune of

US dollar 600m., would have to explain the rationale behind the

decision to arrive at this sudden settlement103.

102. Id... at 681-82 It may be mentioned here that the Bhopal gas
leak matter has been heard by four different constitutional
Bench, These are as under : -
1. Chief Justice Pathak, Venkataramiah, Misra, Venkatacha-
liah and Ojha jj(24 days).
2. Chief Justice Mukharji, Singh, Ranganathan, Ahmadi and
Saikai jj, (27 days).
3. Chief Justice Mukharji, Misra, Singh, Venkatachaliah
and Ojha jj.(18 days) Thereafter unfortunately C.J.
Mukherji passed away.
4. Chief Justice Rangnath Misra, Singh, Venkatachaliah Ahmadi
and Oj ha jj.
103. "Surrender to Multinational"; MAIN STREAM(New Delhi)
Feb. 18, 1989, p. 3 See also Bakshi P.M. "Tort, Law, Pollu­
tion and Corporation Chartered Secretary (Feb. 85)
pp. 88-92.

376
 The than Chief Justice P.N. Bhagwati had asserted

with reference to this amount of comepensation (600 m) offered by

UCC as 'wholly inadequate in relation to victims’ and supported

his argument by comparing this amount with the offer of US dol­

lars 2.5 billion by Mansille Corporation for anestimated 60,000

claim for damage caused by asbestos; payment of US dollar 520 m.

by A.H. Robind company for setting 9450 claims relating to inju­

ries from Daikon Shield in 1986; provision of Rs. 85,000 each to

relatives of those killed in the Air India Crash in June,1984, He

further commanted^;

To compromise the case on an arbitrary undis­

closed basis for an inadequate amount on the
ground that the victims are too poor to sus­
tain themselves through litigation would
amount to inflicting a double injustice on
theft5.

The Government has, possibly, gone for such type

of settlement only in haste and that prolonged legal proceedings

on the issue of liability would have caused unfold suffering to

the victims who would have thus been denied monetary relief for a

considerable length of time. But even this-stand of

104. Ibid.
105. Ibid. Earlier, views were expressed in the USA that the
claims may wreck the UC finances. See "Claims may wreck
firm’s finances". The Hindustan Times (Hew Delhi) Dec. 7,
1984. See also, "2 families file $ 156 billion suit in US"
The Times of India (New Delhi) Dec. 8, 1984 union Carbide
Faces staggering Claims” The Hindustan Times (New Delhi)
Dec.8, 1984 Lovis, B. Asul, union Carbides Sued for $ 156
bn. World’s biggest evern claim" The Hindustan Times
(New Delhi) Dec., 8, 1984.

377
the Government is not justified as the amount of Rs. 715 Crores

is not adequate to rehabilitate the MIC victims and furthermore,

the survivors would get only Rs. 5000/- per person after distrib­

uting the damages to the families of those who died in the trage­

dy .

Commenting upon the verdict of the Supreme Court

in this case, critique^1^ says;

The most depressing aspect of these events Is

that they provide conclusive proof that the
poor in this country have little lobbying
power even when the sympathies of the ordinary
people around the world are with them, Nani
Palki-Wala is.reported to.have stated:_ It is
eminently in the Interest of India." Univit-
tingly, he has given greater credence to
Sharad Joshi’s India Vs. Bharat’ thesis: We
don’t really need any learned analysis to
discover whether the US dollars 470 m are
adequate or not. The capitalist world has
given us the most meaningful signal that the
Union Carbide’s shares jumped 10 percent. The
shareholders obviously expected the Indian
Supreme Court to award a much high amount as
compensation. The damage has been don© by a US
multinational company seems to have much clout
in India then its own citizens. The Supreme
Court has lost credibility. The Government
seen by the people as working against their
best interests. Worst of all, poor people are
being convinced that their lives don’t
matterAV/.

106. Mohan Dinesh 'Bhopal After Supreme Court Verdict; MAIN

STREAM (New Delhi) Feb. 18, 1989 p.6„ See also Divan &
Resencranz, "The Bhopal settlement, 19 Environment
Policy and Law 166 (1989) Baxi, Upendra, "Union Carbide
Must Honour Verdict" Indian Express (New Delhi) April
21, 1988.
'107. Ibid.

378
 Prof..Upendra Baxi feels that the judgement of the

appeal court amount to a license to multinationals to terrorise

the Masses108.

Mr.Prashant.Bhushan, a senior advocate of the

Supreme Court is of the view that some 'secret deal’ has taken

place between the parties in the premises of the Supreme

Court. Mr..Soli.Sorab.ii . another senior advocate of the Supreme

Court alleged that the Victims of the Bhopal Gas Tragedy or their

representatives were not taken in confidence at the time of

settlement,. Furthermore, the Government and the Supreme Court are

not justified in letting guilty persons free from the criminal

liability109.

(b) Liability of the Multinational:

The Government had .failed rather abandoned to

establish the civil and criminal liability of the multinational.

It may be mentioned that UCC is a multinational company of Ameri­

ca having wo MIC based pesticide production plants (one at Bhopal

and other at West Virginia, America). Both are identical except

their instrumentation systems. UCC operates in more than 50

countries and is holding 50.9% Equity capital of UC(I) Ltd.,

Bhopal. Therefore, it employed complete control over the UC(I)

Ltd. Bhopal. So, for the acts and ommissions done by the subsidi­

ary are concerned the management of the main comapany UCC can be

108. Indian Express (Mew Delhi) Feb. 19, 1989. See also Singh
Jai, "Bhopal Settlement or Sell Out, The Lawyers (Bombay)
March 1989, p. 4.
109. Indian Express (Mew Delhi) Feb., 17, 1989. See also Sahay,
"The Verdict is shocking," The Hindustan Times (New Delhi)
Feb,,, 20, 1989.

379
held responsible under the Factories Act,1948, the Air (Preven­

tion and Control of Pollution) Act,1981 and the Insectesides Act,

1968. Similarly, under section 32 of the Industrial Disputes

Act,1947, all the Directors, Managers, Secretaries, Agents and

other officials who are controlling the affairs of the Industry

would be deemed to be guilty for the offences committed by the

company, unless, it is defended by such officials on the grounds

of want of knowledge or consent.

Under company laws also, the foreign companies

which are employing control over the subsidiary companies situat­

ed in India would be amenable and exposed to ordinary law of land

like other Indian companies-*-'1-0.

But. the Supreme Court has not gone on merits and

exonerated the multinational from criminal liability too. So UCL

has won the case on both civil as well as criminal accounts^-*-1.

■(c) Constitutionality of the Gas Disaster Act.1985:

The Bhopal gas disaster (Processing of claims)

Act,1985 was declared constitutional after a detailed debate on a

110. See Raj, G.S., Offences under Prevention and Control of

Pollution Laws - liability of Company Directors and Secre­
taries, Chartered Secretary. (Feb 1985) pp. 106-109. and
Chenoy, K.M., "Industrial Policy and Multinational In India,
(Vol. 13, Ho. 3) Social Scientist March, 1985, pp. 16-31.
See also Bhopal Declaration on Transnationals" (Document)
Main Strem (New Delhi) December 14, 1985, and Patwardhan,
M.S., "The Image and Role of Multinations in India" Com­
merce. Jan. 19, 1985 pp. 11-18.
111. See Dharam, "On Carbide Terms," Indian Post (Bombay) May 12,
1989.

380
writ petition filed in the Supreme Court challenging the right of

the Union Government to represent the parties for filing

claims1-1- .

Though, the court acknowledged that the victims

under the Act were given a right to notice and be heard but no

such notice was given to the victims, and the court, in the

interest of Justice, remarked and rationalised its view by de­

claring, " To do a great right, after all, it is permissible

sometimes to do a little wrong'*--1-'5.

G. Review Petitions:

A Five Judge constitutional Bench of the Supreme

Court heard the review of the $470 million settlement in the

Bhopal gas leak tragedy in which about 3,600 persons were killed

and lakhs incapaciated on various grounds which are discussed

below1-1-^.

1. Grounds of Review:

The_contentions. urged_in._support of_Review .petitions

are.as.under1-1'5;

1. The proceedings before this Court were merely in the

nature of appeals against an interlocutory order pertaining to

112. Charan Lai Sahu v. Union of India AIR 1990 SC 1480.

113. Id. at 1545.
114. Union Carbide Etc. Etc, v. Union of India Etc. Etc. 1991
(2) SCALE, p. 675.
115. Id. at 689-91.

381
the interim-compensation. Consistent with the limited scope and

subject-matter of the appeals, the main suits themselves could

not be finally disposed of by the settlement.

The jurisdiction of this court to withdraw or transfer a

suit or proceeding to itself is exhausted by Article 139-A of the

Constitution. Such transfer implicit in the final disposal of the

suits having been impermissible, suits were not before the Court

so as to amenable to final disposal by recording a settlement.

The settlement is, therefore, without jurisdiction-*-^.

2. Likewise, the pending criminal prosecution was a sepa­

rate and distinct proceeding unconnected with the suit from the

interlocutory order in which the appeals before this Court arose.

The criminal proceedings were not under or relatable to the

'Act5, The Court had no power to withdraw to itself those crimi­

nal proceedings and quash them. The orders of the Court dated

14th and 15th of February 1989, in so far as they pertain to the

quashing of criminal proceedings are without jurisdiction-*--1-7.

3, ‘ The 'Court Assisted-settlement’ was between and

confined to, the Union of India on the on© hand and UCC & UCIL on

the other. The Original Suit No, 1113 of 1986 was really and in

substance a representative suit for purposes and within the

meaning of Order XXII Rule 38 C.P.C. inasmuch as any order

116. Id. at 689.

117. Ibid.

382
made therein would affect persons not impleaded parties to the

suit. Any settlement reached without notice to the persons so

affected without complying with the proceedural drill or Order

XXIII Rule 38 is a nulity^18.

4. The termination of the pending criminal proceed­

ings brought about by the orders dated 14th and 15th of

February,1989 is bad in law and would require to be reviewed and

set aside on grounds that (i) if the orders are construed as

permitting a compounding of offences, they run in the teeth of

the statutory prohibition contained in section 320(9) of the Code

of Criminal Procedure: (ii) if the orders are construed as

permitting a withdrawal of the prosecution under section 482 of

the Code of Criminal Procedure, grounds for such quashing did not
obtain in the case11^.

5. The effect of the orders under review indicting

and prohibiting future criminal proceedings against any person or

persons whatsoever in relation to or arising out of the Bhopal

Gas Leak Disaster, in effect and substance, amount to conferment

of an immunity from criminal proceedings. Grant of immunity Is

essentially a legislative function and cannot be made by a judi­

cial act'^0.

At all events, grant of such immunity is opposed to public policy

and prevents the investigation of serious offences in relation to

118. Ibid.
119. Ibid.
120. Id. at 690.

383
this horrendous industrial disaster where UCC had intei—alia

alleged sabotage as cause of the disaster. Criminal investigation

was necessary in public interest not only to punish the guilty

1 Ol
but to prevent any recurrence of such calamities in future-1'*1 .

6. The memorandum of settlement and the orders of the

Court thereon, properly construed make the inference inescapable

that a part of the consideration for the payment of 470 million

Q.S. Dollar was the stifling of the criminal prosecutions which

is opposed to public-policy. This vitiates the agreement on which

the settlement is based for unlawfulness of the consideration.

The consent order has no higher sanctity than the legality and
validity of the agreement on which it rests'1'22.

7. The process of settlement of a mass tort action

has its own complexities and that a 'fairness hearing’ must

precede the approval of any settlement by the court as fair

reasonable and adequate. In concluding that the settlement was

just and reasonable the Court omitted to take into account and

provide for certain important heads of compensation such as the

need for and the costs of medical surveillance of a large section

of population which, though asymptomatic for the present, was

likely to become, symptomatic later, having regard to the

character and the potentiality of the risks of exposure and the

likely future damages resulting from long-term effects and to

121. Ibid.
122,. Ibid.

384
build-in a 're-opener’ clause. The settlement is bad for not

indicating appropriate break-down of the amount amongst the

various classes of victim-group. There were no criteria to go by

at all to decide the fairness and adequacy of the settlement.

8. Even if the settlement is reviewed, and set aside,

there is no compulsion or obligation to refund and restore to the

UCC the funds brought in by it, as such restitution is discre­

tionary and in exercising this discretion in the interest of the

victims be kept in mind and restitution denied. At all events, if

restitution is to be allowed, whether UCC would not be required

to act upon and effectuate its undertaking dated 27th

November,1986 on the basis of which order dated 30th

November,1986 of the Bhopal District Court vacating the injunc­

tion against it was made123.

9. Notice to the affected-person implicit in section

4 of the Act was .imperative before reaching a settlement and that

as admittedly no such opportunity was given to the affected-

person either by the Union of India before entering into the

settlement or by the Court before approving it, the settlement is

void, violative of natural justice. Sufficiency of natural jus­

tice at any later stage can not cure the effects of earlier

insufficiency and does not bring life back to a purported settle­

ment which was, in its inception, void124.

123. Id. at 691.

124. Ibid.

385
2. Judgement of the Apex Court on Review Petition:

In a l9S~page verdict, the court set aside the

part of the settlement order on February 15,1989 by which another

constitution bench headed by the then Chief Justice, Mr. Justice

R.S. Pathak, had granted immunity to the officers of the

delinquent multinational corporation of all its present and

future criminal liabilities arisen due to the gas leak tragedy.

Following massive leakage of lethal MIC gas from

the Bhopal based plant of UCC on December 2 and December 3,1984,

criminal cases were registered against the then Chairman of UCC,

Mr. Warren Anderson and other officers for causing death of a

large number of persons and injuring lakhs. With the settlement

order approved by the apex court on February 15,1989, these,

delinquent officers were let off by the court as the multination­

al corporation had arrived at $470 million settlement with the

Central Govt. Maintaining.that the.court__was.empowered.. under

Article.142 to.quash..criminal.proceedings in any..matter to do

complete_justice, the_Judges._however .__pointed out__that

withdrawal.of_criminal.cases_must_be.j ustif ied.on_proper_and

relevant.grounds,..But.the.settlement.bench.did..not..indicate.any

grounds.o...r..criterion.justifying.the..withdrawal.of..the_prosecu-
, . 125

The court, which passed several directions on

properly administering the Rs. 1,200 crore settlement fund for

125.. Id. at 700 & 733.

386
the benefit of victims and also directed the Central Government

to "make good the deficiency" if the settlement fund was found to

be insufficient*26.

3. Monitoring of Fund:

The court gave followings directions*22 for moni­

toring the settlement fund;

First, the claims commissioners, while awarding

compensation to the minor victims, must ensure that the amount is

invested in fixed deposit till the date he attains maturity. A

close friend or the minor’s guardian may be permitted to withdraw

money to cover his expenses*28.

Second directive is that a similar procedure be

adopted when compensation is paid to an illiterate claimant..If,

a large amount is required by the claimant to purchase any immov­

able or movable asset, the claims commissioner may consider such

a request and ensure that the amount is actually spent on the

■ assets .

Another directive is that, in the case of semi­

literate claimants, the claims commissioner should also ensure

that the amount required by the claimant is spent on expanding

his business so that he can earn his livelihood*'30.

126. Id- at 733.-

127. Id. at 732.
128. Ibid.,
129. Ibid.
130. Ibid.

387
 The fourth directive asks the claims commissioner

to abide by the guidelines meant for the minors, illiterate and

semi-illiterate claimants*1-3-1-.

If, further treatment is necessary in the personal

injury cases, the claims commissioner may allow withdrawal- of

required amount for better treatment, according to the fifth

1
di restive-10*-.

In all cases where investment in long term fixed

deposits is made, it should be on the condition that the bank

concerned will not permit any loan or advance on the fixed

deposit. According to the Sixth directive interest on the amount

invested is paid directly to the claimant. It should be stipulat­

ed that the fixed deposit receipts shall carry a note on the face

of the document that no loan or advance will be allowed on the

security without express permission1-33.

The seventh directive says that claimants will

have the liberty to withdraw funds in case of any emergency-1-34.

4- Medical Aid to Victims:

The judges also asked UCC and its subsidiary,

Union Carbide India Limited (UCIL), to allocate Rs. 50 Crore for

setting up a 500-bed hospital equipped with advanced medical

131. Id- at 733.

132. Ibid.
133. Ibid.
134. Ibid.

388
facilities in Bhopal within 18 months for the victims of the gas
tragedy-1-35.

The Government has been directed to allot land for

the construction of the proposed hospital free of cost. Both

symptomatic and asymptomatic victims of the tragedy would be able

to have free of cost medical survellance in the Hospital100.

The Government has been directed to formulate an

appropriate medical group insurance cover from the LIC or the

General Insurance Corporation for compensation to those who,

though presently asymptomatic and have not filed any claim, might

become symptomatic m future1 .

The scheme should also cover the future children

who might manifest congenital or prental MIC- related

afflictions. There shall not be any upper monetary limit for the

insurance liability. The period of insurance cover shall be for

eight years. At least one-lakh persons should be covered by the

insurance cover. And, most importantly, the premia shall be paid

from the settlement fund1-35.

5. Application of Red Cross Society Dismissed:.

In a separate order1-3*5, Mr. Justice M.N, Venka-

135. Ibid.
136. Ibid.
137. Id. at 733-34.
138. Id. at 734.
139. Union Carbide Corporation etc, etc, v. Union of Indian etc.
1991 (2) SCALE p. 734.

389
tachaliah, dismissed14^an application by the Indian Red Cross

Society which sought to exclude $ 5 million from the settlement

amount. The American Red Cross had advanced the amount which had

been paid by the UCC to its Indian counterpart on the direction

by the US Judge, Mr. Keenan, for providing interim relief to the

8hopal gas victims.

The UCC, on the other hand, said that the $ 5

million was a part of the $ 470 million settlement. The court

directed the registrar of the apex court to 'call up’ the fund

with the Indian Red Cross Society which stood unutilised till
Fe b rua ry 25,1989141.

Of $ .470 million, UCC paid $ 420 million in

foreign exchange and $ 45 million in Indian rupees (Rs. 68

Crore). The settlement which had been brought in within the

stipulated period of one month, was 'later invested in Government

securities.

6. Dissenting and Separate Judgements

However, one of the five judges, Mr..Justice A.M.

Ahmadi in.a separate judgement..disagreed.with the.majority. He

Is against the judgement which "saddles the Union of India with

the liability to make good the shortfall" by imposing an addi­

tional term in the settlement without the former’s consent142.

140. Id. at 740

141. Id. at 738.
142. Id. at 734.

390
 "It is impermissible in law to impose the burden

of making good the shortfall on the Union of India and thereby

saddle the Indian tax payer with the tortfeasor’s liability", Mr.

Justice Ahmadi protested. " If I had come to the conclusion that

the settlement fund was inadequate, I would have done the only

logical thing of reviewing the settlement and would have left the

parties to work put a fresh settlement or go to trial in the

pending suit (at Bhopal)",, the judge added"'1'43.

In.his.separate.:iudgement..the Chief Jus11 ce,__Mr,..

Justice.Ranganath.Misra..said.that.the.court.was.concerned.with

the absolute.liability.principle.laid.down.bv the.former.Chief

Justice..Mr.,.J us t ice.P.N. Bhaqwatl..The.principle.envisages that

the.more.prosperous.a.company..is...higher..the.liability.if..an
iniurv.is caused.due.to.its hazardous.activi1ies ^ 44.

• " We. have to remain cognizant of the fact that the

Indian assets of the UCC and UCIL are around Rs. 100 Crore. For

any decree In excess to that amount, execution has to be taken in

the United States" where the defence of due process would be

available to the delinquent company-1-43.

If th© compensation was determined on the strict

liability basis, the decree would be open to attack and may not
be executable In the US, Mr. Justice Misra pointed out14°.

143., Id. at 733

144. Supra, at 114 at 680.
145. Id. at 680-81
146. Id. at 681

391
(IX) Critical Analysis of Verdict on Review Petition

The Supreme Court has upheld the controversial $

470 million February 1989 Bhopal Settlement but hedged it with a

number of conditions which have the effect of ■ opening up the

deal, at least partially, to review. Most important, the court

has unanimously struck down a major component of the settlement,

viz. the extinguishing of criminal liability of Union Carbide

Corporation, its Indian subsidiary, and their officials. In this

ruling, the apex court of the country has pronounced that all

immunities granted to the US multinational and its subsidiary

would also go. This will allow future claims against UCC and thus

remove the seal of finality from the settlement which many ob­

servers had claimed to be wholly inadquate. As it happens, almost

12 years after the world’s worst industrial disaster, its victims

continue to suffer from such a horrifying range of disabilities

and diseases that it is impossible to determine what might con­

stitute sufficient compensation in the long run. Although the

verdict does not define future claims, it at least leaves open

the question of compensation for long-term injury.

However, a second, and less-than-positive side of

the verdict is that it has failed to deal adequately with the

important question of the legality of reaching a settlement on

behalf of the victims without giving them notice or consulting

them. This is Important in view of the exclusive powers of legal

representation acquired by the Government under the special

Bhopal claims Act; surely, such powers must be subject to consul­

tation. The court has ruled that any inadsquancy In the settle-

392 .
merit amount must be made good by the Govt, not because it is

liable for the disaster but because it has acquired the special

powers inquestion. In practical terms, this is a positive deve­

lopment as is the court’s provision of more medical and insurance

facilities. However, this has been done without hearing substan­

tive medical evidence. This is a lacuna that can be made up only

by the setting up of an expert medical commission.

H. Review

To sum up, the 8hopal Gas Tragedy is one of worst

industrial disaster in the history of the modern world which has

claimed more than 3600 lives and affected over one lakh popula­

tion of the town. The leakage of Methyl Isocynate (MIC) has been
rightly termed as the "Killer clound"147 and the tragedy as the

'Bhoposhima’of India by the critics in view of the vast

damage inflicted on the innocent victims. Methyl Iso cynate Is

highly volatile, toxic and slightly heavy than air and is pre­

pared from phosgene (war time Gas). It Is an important raw mate­

rial in the manufacturing of pesticides and the inhalation of one

tenth of a gram of MIC is sufficient to cause death in sec­

onds149.

Medical experts were reported to be in a 'fix’150

147. Supra n. 25.

148. Supra n. 34.
149. Supra n. 37.
150. Supra n. 39 & 40.

393
in the .treatment of gas-affected victims which further aggrarated

the damage. Amidst confusions and controversies, the

enqui ries150Awere made in America for seeking guidance in the

matters of treatment of patients of MIC poisoning. There was

confusion among the Administrators and voluntary bodies for

taking out the people from the borrow spread after tragedy and

the people of Bhopal were caught between conflicting medical

theories, confused' voluntary agencies confronted by administra­

tive road-blocks at every step cowards relief and

rehabilitation151. It is further reported that MIC poisoning has

wide spread aftei—effect including cerebral odema152, abortion in

pregnant woman155,malformations of foetus15*1, eyes and lungs

burning155 etc.

The top brass of the Union Carbide Warren Anderson

blamed155 the management of the UCC(I) Limited for ignoring the

safety measures suggested by the experts. Instead of- taking these

measures and renovation of the plant as far back as In 1982, the

company continued the production of pesticides resulting into

collapse on the ill-fated day in Dec.1984. It was further allged

by Mr. Anderson that a copy of the aforesaid measures .suggested

by the experts was also forwarded to M.P. State Government but of

no avail .

150A Ibid
151. Supra n. 46,
152. Supra n. 47.
153. Supra n. 48.
154. Ibid.
155. Supra nn 58 & 60.
156. Supra n. 64.
157. Supra n. 65.

394
The M.P. State Government too, appears to be negligent in giving

clearance to the carbide plant site- in a locality which is a

apparently residential area. The Government failures can be

further established by the fact that the Union Carbide plant was

not identified as hazardous and obnoxious to be shifted or relo­

cated to an ' alternate site. The M.P. Pollution Board granted

the necessary environmental clearance certificate’ to the company

just a week before the tragedy and want to defend itself by

saying that MIC was not a normal emission of the Factory and,
therefore, the same was not monitored188. However, In any case,

preventive measures should have been taken by the Board and the

State Government under various laws Including the Air (Prevention

and control of Pollution) Act,1981 and the Insectrisides Act,1968

to avert the unfortunate disaster. Therefore, prima facie, the

officials who are responsible for ensuring the compliance of the

Statutory safeguards are responsible for their negligent acts. In

addition to this, UCC(l) Limited is also liable under the theory

of strict liability. Some of the victims, too, appears to be

negligent as they were living in the vicinity of the dangerous

plant. The UCC (America) is also liable for the wrong of its
subsidiary189.

To claim compensation and other remedies, a number

of claims were lodged in the Fedral District Court of New York.

158. Supra n. 68.

159. Supra n. 72.

395
After a brief hearing, the court dismissed these claims on the

grounds of lack of 'proper forum’ and asked the plaintiffs to

reach the court of appropriate-jurisdiction in India for seeking

the requisite remedies16*''*. Ultimately, the cases were lodged in

the Bhopal District Court by the Union of India (to represent the

victims) and others. The District Court of Bhopal directed the

UCC(l) Ltd. to pay Rs. 350 Crores as interim relief pending final

hearing. On revision, the M.P. High Court reduced the interim

relief’ to Rs. 250 crores. An appeal was preferred by the UCC(l)

Ltd. in' the apex court against the orders of M.P. High Court. A

Five Judge Bench was constituted to hear the appeal but pending

appeal, a 'settlement’ was arrived at between the Union of India,

UCC(l) Ltd. and the UCC (America) which was approved by the apex
court^-1. In terms of the settlement, the UCC paid U.S. 470

million to Union of India in full and final settlement of all

claims and liabilities both civil and criminal, arising out of

and connected with the disaster'1'62. Accordingly, all the proceed­

ings pending in or before various courts and authorities became

infructuous.

The 'settlement’ was supported in view of the

delayed justice162121, complexity of legal issues166, and the

pressing urgency to provide immediate relief164 to victims to

prevent further victimization. However, the order of settlement

130. Supra n. 79.

161. Supra n. 94.
162. Ibid
162A Supra nn. 100-102.
163. Supra n. 94.
164. Ibid

396
came under a severe criticism on various counts Including inade­
quate .compensation165, arbitrary*66, without any legal basis*67.

license to multinational to terrorise the masses 168 secret

deal 169 and letting the guilty persons free from criminal lia­
bility*70. The apex court’s order was further criticised on the

ground of not deciding the matter on merits and also upholding

the constitutionality of the Gas Disester Act,1985 in which right

to representation of all the victims was taken over by the Union

of India without giving the proper notice and hearing of the

interested parties, a mandatory requirement under the Actx' .

Review petitions were pre.fered In the apex court

on various grounds*7^ for the review of US $470 million settle­

ment and immunity granted to the delinquent officers of the Union

Carbide Corporation. The court set-aside the part of the settle­

ment order so far as it deals with the grant of criminal immunity

from present and future liabilities and thereby cleared the

hurdles for initiating prosecution of the negligent officers of

the company*73. Further directions were given by the apex court

to the effect that the Central Government should properly admin­

ister and invest the 'fund’ and to make good the 'shortfall’ in

case the settlement fund was found to be inadequate or insuf

165. Supra nn 103-105

166. Supra n. 105
167. Ibid .
168. Supra n. 108
169. Supra n. 109
170. Ibid
171. Supra n. 112-113
172. Supra n, 115
173. Supra n. 125.

397
ficient174, The court issued further directions regarding the

monitoring and distribution of the fund among victims'1*75, medical

aid to victims including opening up of a 500-bed specialised

hospital for medical survellance of symptomatic as well as asymp­

tomatic victims176etc. An application of the Indian Red Cross

Society was dismissed-**77 which sought to exclude US $ 5 million

from the settlement amount. The American Red Cross had advanced

the said amount of US $ 5 million to UCC (America) to be paid to

its Indian counterpart. Similarly, a fresh review petition with

'new’ grounds was not admitted and dismissed by the court***7®.

Justice A.M. Ahmadi, in a separate judgement

disagreed179 with the other judges of the Bench which heard

review petition. He is apparently against the judgement which

saddles the Union of India with the liability 'to make good the

shortfall’ by imposing a new term in the settlement without

formers consent. In his separate judgement180, Justice R.N.

Mishra said that the court was concerned with absolute liability

principle. This principle also envisages that more prosperous a

company is higher, the liability if an injury is caused due to

its hazardous activities.

174. Ibid .
175. Supra nn. 127-134
176. Supra nn. 135 & 136
177. Supra n. 140
178. Charan Lai Sahu v. Union of India & Others (vol. II No.15)
1991(2) SCALE 841.
179. Supra nn. 142-143
180. Supra nn. 144-147

398
 It appears that the judgement of the apex court on

review was strongly influenced by the public criticism of the

settlement order specially with reference to the grant of crimi­

nal Immenity to the negligent company and the officials. The

review order allows the.criminal proceedings against the .company

and its deliquent officials. The CBI is proceeding with that

matter in the District and Sessions Court of Bhopal, separately.

The most unfortunate part of the whole episode is

that the victims are still awaiting the payment of compensation

arid their claims are under process. The basic justification for

entering into a settlement for providing immediate relief’ to

victims is, therefore, completely washed away. The role of the

foreign advocates was shameful*8* as they tried to cash on the

tragady by enticing away the victims or their representatives

whereas the role of Indian Advocates and Solicitors was praised

by the apex court*82.

The Parliament has passed the Public Liability

Insurance Act,1991, in order to overcome certain difficulties

being experienced in this case regarding 'Immediate relief’ and

compensation in the matters of handling of hazardous substances.

181. Supra n. 81.

132. Supra n. 99.

399