UNION CARBIDE CORPORATION ETC. ETC. versus UNION OF INDIA ETC. ETC

Citation: [1991] SUPP. 1 S.C.R. 251 · Decided: 03-10-1991 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Disposed off

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Judgment (excerpt)

UNION CARBIDE CORPORATION ETC. ETC. 
A 
v. 
UNION OF INDIA ETC. ETC. 
OCTOBER 3, 1991 
[RANGANATH MISRA, CJ, K.N. SINGH, M.N. 
'B 
VENKATACHALIAH, A.M. AHMADI AND N.D. OJHA, JJ.} 
Bhopal Gas Disaster (Processing of Claims) Act, 1985: 
' 
~ 
Sections 3, 4, 9: Settlement of claims before lite Apex Cou11-Not afford-
ing 'Faimess Heari11g'-Non-incorporation of re-opener clause-Whether C 
vitiates the settlement- Review of settlement-If set aside by Court~1ether 
Court has inhere11t jurisdiction to order restitutio11 of the fend to tlte com-
panJ-:;-Review proceedings - Court would not refuse to afford opportunity to 
parties on rigid technical grounds-In case funds found inadequate in fu-
ture-Wlzether Union of India as ·Welfare State to make good the deficien-
cy--Whether settlement could be set aside on mere possibility that medical D 
documentation and categorisation were faulty and figures of various ki11ds 
of injuries and disableinent were undependable-Liability of tort-
feasor--Award of compensation--To be proportionate to economic supe-
riority of the off ender. 
Constitution of India, 1950: 
Article 136, 137, 139-A, 142, 145: Inherent jurisdiction under Articles 
136 and 142 to withdraw or transfer and finally dispose of the main suits 
and pending Criminal proceedings in the course of hearing of appeals arising 
out of interlocutory orders in suits-Whether taken away by Article 139-
A--Words 'Cause"Or matter' appearing in Article 142---Meaning and scope 
of--Apex Court's power to quash criminal proceedings--Court's order 
recording settlement between parties-:-Such agreement if opposed to public 
polic_y- Whether void and order of settlement liagle to be set aside--Special 
Nave jurisdiction-Nature and scope of-Main object-To meet ends of jus-
tic~ven specific provision for appeal under the Constitlllion of other laws 
not to limit the j11risdictio11-'Stifli11g of prosecution d9.ctrine' -Whether at-
tracted where the motive is to drop Criminai ai also Civil proceed: 
ings-Doctrine of resti1111ion~1ether applicable to appeals under Article 
136-Confennent of immunity from crimihal proceedings~1etlzer legisla-
tive ft111ctio11~1ether amounts to preferential treatment-Settlement of 
claims recorded-Review. of~iether settlement could be set aside on 
251 
E 
F 
G 
H 
252 
SUPREME COURT REPORTS 
(1991} SUPP. 1 ·s. C.R. 
A ground of insufficiency of settlement fund-In the event of funds being found 
¥. 
insufficient to meet the compensation detennined-Wlzether Union of India 
as Welfare State to make good the deficiency. 
Civil Procedure Code, 1908: 
Order XX/II, Rule 3B; Sections 112 and 114: Settlement recorded by 
B Court-Principles of natural justice-Persons whose interests affected not 
made co-nomine parties--Order recording settlement not preceded by notice 
to such persons-Whether renders the proceedings void-Doctrine of restitu-
' 
tion---Applicability of. 
,.Ar-_ 
Law of Torts: 
C 
Mass tort actio~ourt assisted settlement-Non-affording of pre-
settlement 'Fairness Hearing' and non-incorporation of 'reopener' clause in 
tlze settlement-Whether vitiate the settlement-Assessment of once and for 
· all damages in personal injury actions--Unf oreseen but likely future manif es-
tation of the injmy--.4.11 important factor to be kept in mind. 
D 
Administrative Law: 
E 
. Principles of Natural Justice~Audi alteram partem rule-Non-com-
pliance with the rule--:-Effect of-To be viewed in circumstamial flexibility. 
Practice & Procedure: 
Plea of invaliditj based on public policy-Not ban'ed by rule of estop-
pel. 
Procedural teclm~calities-· -To yield to paramount considerations of 
justice and fairness where matter involves moral and humanitorian con-
siderations. 
The ~nion Carbide (India) Ltd •. (UCIL), a sister concern of Union 
F Carbide Corporation (UCC) owned and operated in Bhopal, a chemical 
plant manufacturing pesticides, one ·of the ingredients in the composition 
being Methyl Isocyanat~ (MIC), considered to be the most toxie chemical 
in industrial use. 
G 
On the 2nd December, 1984 night there was escape of MIC from the 
tanks in which it was stored. And the fumes blew into the hutments 
abutting the plant premises affecting the residents as also the flora and 
fauna. About 4000 people lost their lives and the health of tens of 
thousands of people was affected in various degrees of seriousness. 
H 
The Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 was 
,. 
UNION CARBIDE v. U.O.I. 
253 
passe

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