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- I entirely agree with my noble and learned Brother
Venkatachaliah and hope and trust that the judgment he has produced is the epitaph
on the litigation. I usually avoid multiple judgments but this seems to be a matter
where something more than what is said in the main judgment perhaps should be said. - Several suits were filed in the United States of America for damages by the local
representatives of the deceased and by many of the affected persons. The Union of
India under the Bhopal Gas Leak Disaster (Processing of Claims) Act of 1985 took
upon itself the right to sue for compensation on behalf of the affected parties and filed
a suit for realisation of compensation. The suits were consolidated and Judge Keenan
by his order dated 12th May, 1988, dismissed them on the ground of forum non
conveniens, subject, inter alia, to the following conditions:
1) Union Carbide shall consent to submit to the jurisdiction of the Courts of India
and shall continue to waive defences based on the statute of limitations, and
2) Union Carbide shall agree to satisfy any judgment rendered against it in an
Indian Court, and if appealable, upheld by any appellate court in that country,
whether such judgment and affirmance comport with the minimal
requirements of due process. - The United States Court of Appeals for the Second Circuit by its decision of
January 14, 1987, upheld the first condition and in respect of the second one stated:
In requiring that UCC consent to enforceability of an Indian judgment against it, the
district court proceeded at least in part on the erroneous assumption that, absent such
a requirement, the plaintiff’s, if they should succeed in obtaining an Indian judgment
against UCC, might not be able to enforce it against UCC in the United States. The
law, however, is to the contrary. Under New York law, which governs actions brought
in New York to enforce foreign judgments…foreign-country judgment that is final,
conclusive and enforceable where rendered must be recognised and will be enforced
as “conclusive between the parties to the extent that it grants or denies recovery of a
sum of money” except that it is not deemed to be conclusive if:
1) The judgment was rendered under a system which does not provide impartial
tribunals or procedures, compatible with the requirements of due process of
law;
2) The foreign court did not have personal jurisdiction over the defendant. - After Judge Keenan made the order of 12th of May, 1986, in September of that
year Union of India in exercise of its power under the Act filed a suit in the District
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Court at Bhopal. In the plaint it was stated that death toll upto then was 2,660 and
serious injuries had been suffered by several thousand persons and in all more than 5
lakh persons had sought damages upto then. But the extent and nature of the injuries
or the aftereffect thereof suffered by victims of the disaster had not yet been fully
ascertained though survey and scientific and medical studies had already been
undertaken. The suit asked for a decree for damages for such amount as may be
appropriate under the facts and the law and as may be determined by the Court so as
to fully, fairly and finally compensate all persons and authorities who had suffered as
a result of the disaster and were having claims against the UCC. It also asked for a
decree for effective damages in an amount sufficient to deter the defendant and other
multi-national corporations involved in business activities from committing wilful and
malicious and wanton disregard of the rights and safety of the citizens of India. While
the litigations were pending in the US Courts an offer of 350 million dollars had been
made for settlement of the claim. When the dispute arising out of interim
compensation ordered by the District Court of Bhopal came before the High Court,
efforts for settlement were continued. When the High Court reduced the quantum of
interim compensation from Rs. 350 crores to a sum of Rs. 250 crores, both UCC and
Union of India challenged the decision of the High Court by filing special leave
petitions. It is in these cases that the matter was settled by two orders dated 14th and
15th of February, 1989. On May 4, 1989, the Constitution Bench which had recorded
the settlement proceeded to set out brief reasons on three aspects:
(a) How did this Court arrive at the sum of 470 million US dollars for an overall settlement?
(b) Why did the Court consider this sum of 470 million US dollars as ‘just,
equitable and reasonable?
(c) Why did the Court not pronounce on certain important legal questions of
far-reaching importance said to arise in the appeals as to the principles of
liability of monolithics, economically entrenched multi-national companies
operating with inherently dangerous technologies in the developing countries
of the third world – questions said to be of great contemporary relevance to the
democracies of the third-world? - It is interesting to note that there has been no final adjudication in a mass tort
action anywhere. The several instances which counsel for the parties placed before us
were cases where compensation had been paid by consent or where settlement was
reached either directly or through a circuitous process. Such an alternate procedure
has been adopted over the years on account of the fact that trial in a case of this type
would be protracted and may not yield any social benefit. Assessment of
compensation in cases of this type has generally been by a rough and ready process.
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In fact, every assessment of compensation to some extent is by such process and the
concept of just compensation is an attempt to approximate compensation to the loss
suffered. We have pointed out in our order of May 4, 1989, that ‘the estimate in the
very nature of things cannot share the accuracy of an adjudication’. I would humbly
add that even an adjudication would only be an attempt at approximation. - The main foundation of the challenge was two-fold:
(i) The criminal cases could not have been compounded or quashed and
immunity against criminal action could not be granted; and
(ii) the quantum of compensation settled was grossly low.
So far as the first aspect is concerned, the main judgment squarely deals with it and
nothing more need be said. As far as the second aspect goes, the argument has been
that the principle enunciated by this Court in M.C. Mehta v. Union of India,
MANU/SC/0092/1986 : [1987]1SCR819 should have been adopted. The rule in
Rylands v. Fletcher [1868] 3 HL 330 has been the universally accepted authority in
the matter of determining compensation in tort cases of this type. - In M.C. Mehta’s case no compensation was awarded as this Court could not reach
the conclusion that Shriram (the delinquent company) came within the meaning of
“State” in Article 12 so as to be liable to the discipline of Article 21 and to be
subjected to a proceeding under Article 32 of the Constitution. Thus what was said
essentially obiter. - The extracted part of the conservation from M.C. Mehta’s case perhaps is a good
guideline for working out compensation in the cases to which the ratio is intended to
apply. The statement of the law ex-fade makes a departure from the accepted legal
position in Rylands v. Fletcher. We have not been shown any binding precedent from
the American Supreme Court where the ratio of M.C. Mehta’s decision has in terms
been applied. In fact Bhagwati, CJ clearly indicates in the judgment that his view is a
departure from the law applicable to the western countries. guideline for working out
compensation in the cases to which the ratio is intended to apply. The statement of the
law ex-fade makes a departure from the accepted legal position in Rylands v.
Fletcher. We have not been shown any binding precedent from the American
Supreme Court where the ratio of M.C. Mehta’s decision has in terms been applied. In
fact Bhagwati, CJ clearly indicates in the judgment that his view is a departure from
the law applicable to the western countries. - We are not concerned in the present case as to whether the ratio of M.C. Mehta
should be applied to cases of the type referred to in it in India. We have to remain
cognizant of the fact that the Indian assets of UCC through UCIL are around Rs. 100
crores or so. For any decree in excess of that amount, execution has to be taken in the
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United States and one has to remember the observation of the U.S. Court of Appeals
that the defence of due process would be available to be raised in the execution
proceedings. The decree to be obtained in the Bhopal suit would have been a money
decree and it would have been subject to the law referred to in the judgment of the
U.S. Court of Appeals. If the compensation is determined on the basis of strict
liability-a foundation different from the accepted basis in the United States-the decree
would be open to attack and may not be executable. - If the litigation was to go on merits in the Bhopal Court it would have perhaps
taken at least 8 to 10 years; an appeal to the High Court and a further appeal to this
Court would have taken in all around another spell of 10 years with steps for
expedition taken. We can, therefore, fairly assume that litigation in India would have
taken around 20 years to reach finality. From 1986, the year when the suit was
instituted, that would have taken us to the beginning of the next century and then steps
would have been made for its execution in the United States. On the basis that it was a
foreign judgment, the law applicable to the New York Court should have been
applicable and the ‘due process’ clause would have become relevant. That litigation in
the minimum would have taken some 8-10 years to be finalised. Thus, relief would
have been available to the victims at the earliest around 2010. In the event the U.S.
Courts would have been of the view that strict liability was foreign to the American
jurisprudence and contrary to U.S. public policy, the decree would not have been
executed in the United States and apart from the Indian assets of UCIL, there would
have been no scope for satisfaction of the decree. - When dealing with this case this Court has always taken a pragmatic approach.
The oft-quoted saying of the great American Judge that ‘life is not logic but
experience’ has been remembered. Judges of this Court are men and their hearts also
bleed when calamities like the Bhopal gas leak incident occur. Under the
constitutional discipline determination of disputes has been left to the hierarchical
system of Courts and this Court at its apex has the highest concern to ensure that Rule
of Law works effectively and the cause of justice in no way suffers. To have a decree
after struggling for a quarter of a century with the apprehension that the decree may
be ultimately found not to be executable would certainly not have been a situation
which this Court could countenance. - In the order of May 4, 1989, this Court had clearly indicated that it is our
obligation to uphold the rights of the citizens and to bring to them a judicial fitment as
available in accordance with the laws. There have been several instances where this
Court has gone out of its way to evolve principles and make directions which would
meet the demands of justice in a given situation. This, however, is not an occasion
when such an experiment could have been undertaken to formulate the Mehta
principle of strict liability at the eventual risk of ultimately losing the legal battle.
216 - Those who have clamoured for a judgment on merit were perhaps not alive to this
aspect of the matter. If they were and yet so clamoured, they are not true
representatives of the cause of the victims, and if they are not, they were certainly
misleading the poor victims. It may be right that some people challenging the
settlement who have come before the Court are the real victims. I assume that they are
innocent and unaware of the rigmarole of the legal process. They have been led into a
situation without appreciating their own interest. This would not be the first instance
where people with nothing as stake have traded in the misery of others.
24 . In the facts and circumstances indicated and for the reasons adopted by my noble
brother in the judgment. I am of the view that the decree obtained on consent terms
for compensation does not call for review. - I agree with the majority view.
M.N. Venkatachaliah, J.: On 14th February, 1989 this Court recorded an over-all
settlement of the claims in the suit for 470 million U.S. Dollars and the consequential
termination of all civil and criminal proceedings. The relevant portions of the order of
this Court dated 14th February, 1989 provide:
1) The Union Carbide Corporation shall pay a sum of U.S. Dollars 470 millions
(Four hundred and seventy Millions) to the Union of India in full settlement of
all claims, rights and liabilities related to and arising out of the Bhopal Gas
disaster.
2) The aforesaid sum shall be paid by the Union Carbide Corporation to the
Union of India on or before 31st March, 1989.
3) 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 pending.
A memorandum of settlement shall be filed before us tomorrow setting forth all the
details of the settlement to enable consequential directions, if any, to issue. - The settlement is assailed in these Review Petitions and Writ Petitions on various
grounds. The arguments of the petitioners in the case have covered a wide range and
have invoked every persuasion-jurisdictional, legal, humanitarian and those based on
considerations of public-policy. It is urged that the Union of India had surrendered the
interests of the victims before the might of multinational cartels and that what are in
issue in the case are matters of great moment to developing countries in general.
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31 . Before we examine the grounds of challenge to the settlement we might, perhaps,
refer to three events. The first is that the Central Bureau of Investigation, Government
of India, brought criminal charges under Sections 304, 324, 326, 429 read with
Section 35 of the Indian Penal Code against Mr. Warren Anderson, the then Chairman
of the UCC and several other persons including some of the officers incharge of the
affairs of the UCIL. On 7th December, 1984 Mr. Warren Anderson came to India to
see for himself the situation at Bhopal. He was arrested and later released on bail. One
of the points seriously urged in these petitions is the validity of the effect of the order
of this Court which terminated those criminal proceedings.
The second event is that on 17th of November, 1986 the District Court at Bhopal, on
the motion of the plaintiff- Union of India, made an order restraining the UCC by an
interlocutory injunction, from selling its assets, paying dividends, buying back debts,
etc. during the pendency of the suit. On 30th of November, 1986 the District Court
vacated that injunction on the written assurance and undertaking dated 27th November
1986 filed by the UCC to maintain unencumbered assets of three billion U.S. Dollars.
One of the points argued in the course of the hearing of these petitions is whether, in
the event the order recording the settlement is reviewed and the settlement set aside,
the UCC and UCIL would become entitled to the restitution of the funds that they
deposited in Court pursuant to and in performance of their obligations under the
settlement. The UCC deposited 420 million U.S. Dollars and the UCIL the rupee
equivalent of 45 million U.S. Dollars. 5 million U.S. Dollars directed by Judge
Keenan to be paid to the International Red Cross was given credit to. The petitioners
urge that even after setting aside of the settlement, there is no compulsion or
obligation to restore to the UCC the amounts brought into Court by it as such a step
would prejudicially affect the interests of the victims. The other cognate question is
whether, if UCC is held entitled to such restitution, should it not, as a pre-condition,
be held to be under a corresponding obligation to restore and effectuate its prior
undertaking dated 27th November 1987 to maintain unencumbered assets of three
billion U.S. Dollars, accepting which the order dated 30th November, 1987 of the
District Court Bhopal came to be made.
The third event is that subsequent to the recording of the settlement a Constitution
Bench of this Court dealt with and disposed of writ-petitions challenging the
constitutionality of the ‘Act’ on various grounds in what is known as Charanlal Sahu’s
case and connected matters. The Constitution Bench upheld its constitutionality and in
the course of the Court’s opinion Chief Justice Mukharji made certain observations as
to the validity of the settlement and the effect of the denial of a right of being heard to
the victims before the settlement, a right held to be implicit in Section 4 of the Act.
Both sides have heavily relied on certain observations in that pronouncement in
support of the rival submissions.
218 - The contentions urged at the hearing in support of these petitions admit of the
following formulations:
Contention (A): The proceedings before this Court were merely in the nature of
appeals against an interlocutory order pertaining to the interimcompensation.
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
139A 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 be amenable to
final disposal by recording a settlement. The settlement is, therefore, without
jurisdiction.
Contention (B): Likewise the pending criminal prosecution was a separate 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 ‘Act’. The Court had no power to withdraw to itself those criminal 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.
Contention (C): The ‘Court-assisted-settlement’ was as between, and confined to, the
Union of India on the one 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 XXIII Rule 3B C.P.C. inasmuch as any order made therein
would affect persons not economic parties to the suit. Any settlement reached without
notice to the persons so affected without complying with the procedural drill of Order
XXIII Rule 3B is a nullity. That the present suit is such a representative suit; that the
order under review did affect the interests of third parties and that the legal effects and
consequences of non-compliance with Rule 3B are attracted to case are concluded by
the pronouncement of the Constitution Bench in Charanlal Sahu’s case.
Contention (D): The termination of the pending criminal proceedings 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 CrPC; (ii) if the orders are construed as
permitting a withdrawal of the prosecution underSection 321 Cr. P.C. they would,
again, be bad as violative of settled principles guiding withdrawal of prosecutions;
and (Hi) if the orders amounted to a quashing of the proceedings under Section 482 of
the CrPC, grounds for such quashing did not obtain in the case.
Contention (E): The effect of the orders under review interdicting and prohibiting
future criminal proceedings against any person or persons whatsoever in relation to or
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arising out of the Bhopal Gas Leak Disaster, in effect and substance, amounts to
conferment of an immunity from criminal proceedings. Grant of immunity is
essentially a legislative function and cannot be made by a judicial act. At all events,
grant of such immunity is opposed to public policy and prevents the investigation of
serious offences in relation to this horrendous industrial disaster where UCC had
inter-alia alleged sabotage as cause of the disaster. Criminal investigation was
necessary in public interest not only to punish the guilty but to prevent any recurrence
of such calamitous events in future.
Contention (F): 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 U.S. Dollars was the stifling of the criminalprosecutions
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.
Contention (G): 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 symptomatic 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 build-in a ‘reopener’ clause. The settlement is bad for not
affording a fairness-hearing and for not incorporating a “re-opener” clause. The
settlement is bad for not indicating appropriate break-down of the amount amongst
the various classes of victim-groups. There were no criteria to go by at all to decide
the fairness and adequacy of the settlement.
Contention (H): 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 discretionary and in exercising this discretion the interests 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 injunction against it was
made.
Contention (I): 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
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settlement or by the Court before approving it, the settlement is void as violative of
natural justice. Sufficiency of natural justice at any later stage cannot cure the effects
of earlier insufficiency and does not bring life back to a purported settlement which
was in its inception void. The observations of the Constitution Bench in Charanlal
Sahu’s case suggesting that a hearing was available at the review stage and should be
sufficient compliance with natural justice, are mere obiter-dicta and do not alter the
true legal position.
Point (j): Does the settlement require to be set aside and the Original Suit No. 1113 of
1986 directed to be proceeded with on the merits? If not, what other reliefs require to
be granted and what other directions require to be issued?
Re: Contentions (A) and (B) - The contention articulated with strong emphasis is that the court had no
jurisdiction to withdraw and dispose of the main suits and the criminal proceedings in
the course of hearing of appeals arising out of an interlocutory order in the suits. The
disposal of the suits would require and imply their transfer and withdrawal to this
Court for which, it is contended, the Court had no power under law. It is urged that
there is no power to withdraw the suits or proceedings dehors. Article 139A and the
conditions enabling the application of Article 139A do not, admittedly, exist. It is,
therefore, contended that the withdrawal of the suits, implicit in the order of their final
disposal pursuant to the settlement, is a nullity. It is urged that Article 139A is
exhaustive of the powers of the Court to withdraw suits or other proceedings to itself.
It is not disputed that Article 139A in terms does not apply in the facts of the case.
The appeals were by special leave under Article 136 of the Constitution against an
interlocutory order. If Article 139A exhausts the power of transfer or withdrawal of
proceedings, then the contention has substance. But is that so?
This Court had occasion to point out that Article 136 is worded in the widest terms
possible. It vests in the Supreme Court a plenary jurisdiction in the matter of
entertaining and hearing of appeals by granting special leave against any kind of
judgment or order made by a Court or Tribunal in any cause of matter and the powers
can be exercised in spite of the limitations under the specific provisions for appeal
contained in the Constitution or other laws. The powers given by Article 136 are,
however, in the nature of special or residuary powers which are exercisable outside
the purview of the ordinary laws in cases where the needs of justice demand
interference by the Supreme Court.
Any limited interpretation of the expression “cause or matter” having regard to the
wide and sweeping powers under Article 136 which Article 142(1) seeks to
effectuate, limiting it only 10 the short compass of the actual dispute before the Court
221
and not to what might necessarily and reasonably be connected with or related to such
matter in such a way that their withdrawal to the Apex Court would enable the court
to do “complete justice”, would stultify the very wide constitutional powers. Take, for
instance, a case where an interlocutory order in a matrimonial cause pending in the
trial court comes up before the apex court. The parties agree to have the main matter
itself either decided on the merits or disposed of by a compromise. If the argument is
correct this Court would be powerless to withdraw the main matter and dispose it of
finally even if it be on consent of both sides. Take also a similar situation where some
criminal proceedings are also pending between the litigating spouses. If all disputes
are settled, can the court not call up to itself the connected criminal litigation for a
final disposal? If matters are disposed of by consent of the parties, can any one of
them later turn around and say that the apex court’s order was a nullity as one without
jurisdiction and that the consent does not confer jurisdiction? This is not the way in
which jurisdiction with such wide constitutional powers is to be construed. While it is
neither possible nor advisable to enumerate exhaustively the multitudinous ways in
which such situations may present themselves before the court where the court with
the aid of the powers under Article 142(1) could bring about a finality to the matters,
it is common experience that day-in-andday- out such matters are taken up and
decided in this Court. It is true that mere practice, however long, will not legitimize
issues of jurisdiction. But the argument, pushed to its logical conclusions, would
mean that when an interlocutory appeal comes up before this Court by special leave,
even with the consent of the parties, the main matter cannot be finally disposed of by
this Court as such a step would imply an impermissible transfer of the main matter.
Such technicalities do not belong to the content and interpretation of constitutional
powers.
To the extent power of withdrawal and transfer of cases to the apex court is, in the
opinion of the Court, necessary for the purpose of effectuating the high purpose
ofArticles 136 and 142(1), the power under Article 139A, must be held not to exhaust
The power of withdrawal and transfer.
Article 139A it is relevant to mention here, was introduced as part of the scheme of
the 42nd Constitutional Amendment. That amendment proposed to invest the
Supreme Court with exclusive jurisdiction to determine the constitutional validity
ofcentral laws by inserting Articles 131A, 139A arid 144A. But Articles 131A, and
144A were omitted by the 43rd Amendment Act 1977, leaving Article 139A intact.
That article enables the litigants to approach the Apex-Court for transfer of
proceedings if the conditions envisaged in that Article are satisfied. Article 139A was
not intended, nor does it operate, to whittle down the existing wide powers under
Article 136 and 142 of the Constitution.
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We find absolutely no merit in this hypertechnical submission of the petitioners’
learned Counsel. We reject the argument as unsound.
A similar ground is urged in support of contention [B] in relation to such withdrawal
implicit in the quashing of the criminal proceedings. On the merits of the contention
whether such quashing of the proceedings was, in the circumstances of the case,
justified or not we have reached a decision on Contentions [D] and [E]. But on the
power of the court to withdraw the proceedings, the contention must fail.
We, accordingly, reject both Contentions [A] and [B].
Re: Contention (D) - This concerns the validity of that part of the orders of the 14th and 15th of
February, 1989 quashing and terminating the criminal proceedings. In the order dated
14th February 1989 Clause (3) of the order provides:
…and all criminal proceedings related to and arising out of the disaster shall stand
quashed wherever these may be pending.
Para 3 of the order dated 15th February, 1989 reads:
Upon full payment of the sum referred to in paragraph 2 above:
(a) The Union of India and the State of Madhya Pradesh shall take all steps which
may in future become necessary in order to implement and give effect to this order
including but not limited to ensuring that any suits, claims or civil or criminal
complaints which may be filed in future against any Corporation, Company or person
referred to in this settlement are defended by them and disposed of in terms of this
order.
(b) Any such suits, claims or civil or criminal proceedings filed or to be filed before
any court or authority are hereby enjoined and shall not be proceeded with before
such court or authority except for dismissal or quashing in terms of this order. - The two contentions of the petitioners, first, in regard to the legality and validity
of the termination of the criminal proceedings and secondly, the validity of the
protection or immunity from future proceedings, are distinct. They are dealt with also
separately. The first – which is considered here – is in relation to the termination of
pending criminal proceedings. - Petitioners’ learned Counsel strenuously contend that the orders of 14th and 15th of
February, 1989, quashing the pending criminal proceedings which were serious noncompoundable offences under Sections 304, 324, 326 etc. of the Indian Penal Code
are not supportable either as amounting to withdrawal of the prosecution under
Section 321 CrPC, the legal tests of permissibility of which are well settled or as
223
amounting to a compounding of the offences under Section 320 Criminal Procedure
Code as, indeed, Sub-section (9) of Section 320 Cr. P.C. imposes a prohibition on
such compounding. It is also urged that the inherent powers of the Court preserved
under Section 482 Cr. P.C. could not be pressed into service as the principles guiding
the administration of the inherent power could, by no stretch of imagination, be said
to accommodate the present case. So far as Article 142(1) of the Constitution is
concerned, it is urged, that the power to do “complete justice” does not enable any
order “inconsistent with the express statutory provisions of substantive law, much
less, inconsistent with any constitutional provisions” as observed by this Court in
Prem Chand Garg v. Excise Commissioner, U.P., Allahabad MANU/SC/0082/1962 :
[1963] 1 SCR 885. - Shri Nariman, however, sought to point out that in Prem Chand Garg’s case the
words of limitation of the power under Article 142(1) with reference to the “express
statutory provisions of substantive law” were a mere obiter and were not necessary for
the decision of that case. Shri Nariman contended that neither in Garg’s case nor in the
subsequent decision in A.R. Antulay v. R.S. Nayak and Anr. MANU/SC/0002/1988:
1988CriLJ1661 where the above observations in Garg’s case were approved, any
question of inconsistency with the express statutory provisions of substantive law
arose and in both the cases the challenge had been on the ground of violation of
fundamental rights. Shri Nariman said that the powers under Articles 136 and 142(1)
are overriding constitutional powers and that while it is quite understandable that the
exercise of these powers, however wide, should not violateany other constitutional
provision, it would, however, be denying the wide sweep of these constitutional
powers if their legitimate plenitude is whittled down by statutory provisions. Shri
Nariman said that the very constitutional purpose of Article 142 is to empower the
Apex Court to do complete justice and that if in that process the compelling needs of
justice in a particular case and provisions of some law are not on speaking terms, it
was the constitutional intendment that the needs of justice should prevail over a
provision of law. Shri Nariman submitted that if the statement in Garg’s case to the
contrary passes into law it would wrongly alter the constitutional scheme. Shri
Nariman referred to a number of decisions of this Court to indicate that in all of them
the operative result would not strictly square with the provisions of some law or the
other. Shri Nariman referred to the decisions of this Court where even noncompoundable offences were permitted to be compounded in the interests of complete
justice; where even after conviction under Section 302 sentence was reduced to one
which was less than that statutorily prescribed; where even after declaring certain
taxation laws unconstitutional for lack of legislative competence this Court directed
that the tax already collected under the void law need not be refunded etc. Shri
Nariman also referred to the Sanchaita case. where this Court, having regard to the
large issues of public interest involved in the matter, conferred the power of
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adjudication of claims exclusively on one forum irrespective of jurisdictional
prescriptions. - Learned Attorney General submitted that the matter had been placed beyond
doubt in Antulay’s case where the court had invoked and applied the dictum in Garg’s
case to a situation where the invalidity of a judicial-direction which, “was contrary to
the statutory provision, namely Section 7(2) of the Criminal Law (Amendment) Act,
1952 and as such violative of Article 21 of the Constitution” was raised and the court
held that such a direction was invalid. Learned Attorney General said that the power
under Article 142(1) could not be exercised if it was against an express substantive
statutory provision containing a prohibition against such exercise. This, he said, is as
it should be because justice dispensed by the Apex Court also should be according to
law.
The order terminating the pending criminal proceedings is not supportable on the
strict terms of Sections 320 or 321 or 482 Cr. P.C. Conscious of this, Shri Nariman
submitted that if the Union of India as the Dominus litis through its Attorney-General
invited the court to quash the criminal proceedings and the court accepting the request
quashed them, the power to do so was clearly referable to Article 142(1) read with the
principle of Section 321 Cr. P.C. which enables the Government through its publicprosecutor to withdraw a prosecution. Shri Nariman suggested that what this Court
did on the invitation of the Union of India as Dominus Litis was a mere procedural
departure adopting the expedient of “quashing” as an alternative to or substitute for
“withdrawal”. There were only procedural and terminological departures and the
Union of India as a party inviting the order could not, according to Shri Nariman,
challenge the jurisdiction to make it, Shri Nariman submitted that the State as the
Dominus Litis may seek leave to withdraw as long as such a course was not an
attempt to interfere with the normal course of justice for illegal reasons. - It is necessary to set at rest certain misconceptions in the arguments touching the
scope of the powers of this Court under Article 142(1) of the Constitution. These
issues are matters of serious public importance. The proposition that a provision in
any ordinary law irrespective of the importance of the public policy on which it is
founded, operates to limit the powers of the Apex Court under Article 142(1) is
unsound and erroneous. In both Garg’s as well as Antulay’s case the point was one of
violation of constitutional provisions and constitutional rights. The observations as to
the effect of inconsistency with statutory provisions were really unnecessary in those
cases as the decisions in the ultimate analysis turned on the breach of constitutional
rights. We agree with Shri Nariman that the power of the Court under Article 142 in
so far as quashing of criminal proceedings are concerned is not exhausted by Sections
320 or 321 or 482 Cr. P.C. or all of them put together. The power under Article 142 is
at an entirely different level and of a different quality.
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Prohibitions or limitations or provisions contained in ordinary laws cannot, ipsofacto,
act as prohibitions or limitations on the constitutional powers under Article 142. Such
prohibitions or limitations in the statutes might embody and reflect the scheme of a
particular law, taking into account the nature and status of the authority or the court
on which conferment of powers – limited in some appropriate way – is contemplated.
The limitations may not necessarily reflect or be based on any fundamental
considerations of public policy. Sri Sorabjee, learned Attorney-General, referring to
Garg’s case, said that limitation on the powers under Article 142 arising from
“inconsistency with express statutory provisions of substantive law” must really mean
and be understood as some express prohibition contained in any substantive statutory
law. He suggested that if the expression ‘prohibition’ is read in place of ‘provision’ that
would perhaps convey the appropriate idea. But we think that such prohibition should
also be shown to be based on some underlying fundamental and general issues of
public-policy and not merely incidental to a particular statutory scheme or pattern. It
will again be wholly incorrect to say that powers under Article 142 are subject to such
express statutory prohibitions. That would convey the idea that statutory provisions
override a constitutional provision. Perhaps, the proper way of expressing the idea is
that in exercising powers under Article 142 and in assessing the needs of “complete
justice” of a cause or matter, the apex court will take note of the express prohibitions
in any substantive statutory provision based on some fundamental principles of
public-policy and regulate the exercise of its power and discretion accordingly. The
proposition does not relate to the powers of the court under Article 142, but only to
what is or is not ‘complete justice’ of a cause or matter and in the ultimate analysis of
the propriety of the exercise of the power. No question of lack of jurisdiction or of
nullity can arise.
Learned Attorney General said that Section 320 Criminal Procedure Code is
“exhaustive of the circumstances and conditions under which composition can be
effected.” [See Sankar Rangayya v. Sankar Ramayya MANU/TN/0508/1915 : AIR
1916 Mad. 463 at 485 and that “the courts cannot go beyond a test laid down by the
Legislature for determining the class of offences that are compoundable and substitute
one of their own.” Learned Attorney General also referred to the following passage in
Biswabahan v. Gopen Chandra MANU/SC/0096/1966 : 1967CriLJ828 :
If a person is charged with an offence, then unless there is some provision for composition of it
the law must take its course and the charge enquired into resulting either in conviction or
acquittal.
He said that “if a criminal case is declared to be non-compoundable, then it is against
public policy to compound it, and any agreement to that end is wholly void in law.”
(See ILR 40 Cal. 113; and submitted that court “cannot make that legal which the law
condemns”. Learned Attorney-General stressed that the criminal case was an
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independent matter and of great public concern and could not be the subject matter of
any compromise or settlement. There is some justification to say that statutory
prohibition against compounding of certain class of serious offences, in which larger
social interests and social security are involved, is based on broader and fundamental
considerations of public policy. But all statutory prohibitions need not necessarily
partake of this quality. The attack on the power of the apex court to quash the crucial
proceedings under Article 142(1) is ill-conceived. But the justification for its exercise
is another matter. - The proposition that State is the dominus Litis in criminal cases, is not an absolute
one. The society for its orderly and peaceful development is interested in the
punishment of the offender. [See A.R. Antulay v. R.S. Nayak and Anr.
MANU/SC/0082/1984 : 1984CriLJ647 , 509 and “If the offence for which a
prosecution is being launched is an offence against the society and not merely an
individual wrong, any member of the society must have locus to initiate a prosecution
as also to resist withdrawal of such prosecution, if initiated.” [See Sheonandan
Paswan v. State of Bihar and Ors. [1987] 1 SCC 289.
But Shri Nariman put it effectively when he said that if the position in relation to the
criminal cases was that the court was invited by the Union of India to permit the
termination of the prosecution and the court consented to it and quashed the criminal
cases, it could not be said that there was some prohibition in some law for such
powers being exercised under Article 142. The mere fact that the word ‘quashing’ was
used did not matter. Essentially, it was a matter of mere form and procedure and not
of substance. The power under Article 142 is exercised with the aid of the principles
of Section 321 Cr. P.C. which enables withdrawal of prosecutions. We cannot accept
the position urged by the learned Attorney-General and learned Counsel for the
petitioners that court had no power or jurisdiction to make that order. We do not
appreciate Union of India which filed the memorandum of 15th February, 1989
raising the plea of want of jurisdiction.
But whether on the merits there were justifiable grounds to quash is a different matter.
There must be grounds to permit a withdrawal of the Prosecution. It is really not so
much a question of the existence of the power as one of justification for its exercise.
A prosecution is not quashed for no other reason than that the Court has the power to
do so. The withdrawal must be justified on grounds and principles recognised as
proper and relevant. There is no indication as to the grounds and criteria justifying the
withdrawal of the prosecution. The considerations that guide the exercise of power of
withdrawal by Government could be and are many and varied. Government must
indicate what those considerations are. This Court in State of Punjab v. Union of India
MANU/SC/0218/1986 : 1987CriLJ151 said that in the matter of power to withdraw
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prosecution the “broad ends of public justice may well include appropriate social,
economic and political purposes”. In the present case, no such endeavour was made.
Indeed, the stand of the UCC in these review petitions is not specific as to the court to
permit a withdrawal. Even the stand of the Union of India has not been consistent. On
the question whether Union of India itself invited the order quashing the criminal
cases, its subsequent stand in the course of the arguments in Sahu case as noticed by
the court appears to have been this:
… The Government as such had nothing to do with the quashing of the criminal proceedings and
it was not representing the victims in respect of the criminal liability of the UCC or UCIL to the
victims. He further submitted that quashing of criminal proceedings was done by the Court in
exercise of plenary powers under Articles 136 and 142 of the Constitution…
The guiding principle in according permission for withdrawal of a prosecution were
stated by this Court in M.N. Sankarayanan Nair v. P.V. Balakrishnan and Ors. [1972]
2 SCC 599:
…Nevertheless it is the duty of the Court also to see in furtherance of justice that the permission
is not sought on grounds extraneous to the interest of justice or that offences which are offences
against the State go unpunished merely because the Government as a matter of general policy or
expediency unconnected with its duty to prosecute offenders under the law, directs the public
prosecutor to withdraw from the prosecution and the Public Prosecutor merely does so at the
behest.
Learned Counsel for the petitioners submitted that the case involved the allegation of
commission of serious offences in the investigation of which the society was vitally
interested and that considerations of public interest, instead of supporting a
withdrawal, indicate the very opposite.
The offences relate to and arise out of a terrible and ghastly tragedy. Nearly 4,000
lives were lost and tens of thousands of citizens have suffered injuries in various
degrees of severity. Indeed at one point of time UCC itself recognized the possibility
of the accident having been the result of acts of sabotage. It is a matter of importance
that offences alleged in the context of a disaster of such gravity and magnitude should
not remain uninvestigated. The shifting stand of the Union of India on the point
should not by itself lead to any miscarriage of justice.
We hold that no specific ground or grounds for withdrawal of the prosecutions having
been set out at that stage the quashing of the prosecutions requires to be set aside. - There is, however, one aspect on which we should pronounce. Learned AttorneyGeneral showed us some correspondence pertaining to a letter Rogatory in the
criminal investigation for discovery and inspection of the UCC’s plant in the United
States for purposes of comparison of the safety standards. The inspection was to be
conducted during the middle of February, 1989. The settlement, which took place on
the 14th of February, 1989, it is alleged, was intended to circumvent that inspection
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we have gone through the correspondence on the point. The documents relied upon do
not support such an allegation. That apart, we must confess our inability to appreciate
this suggestion coming as it does from the Government of India which was a party to
the settlement. - However, on Contention (D) we hold that the quashing and termination of the
criminal proceedings brought about by the orders dated 14th and 15th February, 1989
require to be, and are, hereby reviewed and set aside.
Re: Contention (E) - The written memorandum setting out the terms of the settlement filed by the
Union of India and the U.C.C. contains certain terms which are susceptible of being
construed as conferring a general future immunity from prosecution. The order dated
15th February, 1989 provides in Clause 3[a] and 3[b]:
…that any suits, claims or civil or criminal complaints which may be filed in future against any
Corporation, Company or person referred to in this settlement are defended by them and
disposed of in terms of this order”.
Any such suits, claims or civil or criminal proceedings filed or to be filed before any court or
authority or hereby enjoined and shall not be proceeded with before such court or Authority
except for dismissed or quashing in terms of this order.
These provisions, learned Attorney General contends, amount to conferment of
immunity from the operation of the criminal law in the future respecting matters not
already the subject matter of pending cases and therefore, partake of the character of a
blanket criminal immunity which is essentially a legislative function. There is no
power or jurisdiction in the courts, says learned Attorney-General, to confer immunity
for criminal prosecution and punishment. Learned Attorney General also contends
that grant of immunity to a particular person or persons may amount to a preferential
treatment violative of the equality clause.
This position seems to be correct… - However, in view of our finding on contention (D) that the quashing of criminal
proceedings was not justified and that the orders dated 14th and 15th of February,
1989 in that behalf require to be reviewed and set-aside, the present contention does
not survive because as a logical corollary and consequence of such further directions
as to future prosecutions earlier require to be deleted. We, therefore, direct that all
portions in the orders of this Court which relate to the incompetence of any future
prosecutions be deleted. - The effect of our order on Contentions [D] and [E] is that all portions of orders
dated 14th and 15th February, 1989, touching the quashing of the pending prosecution
as well as impermissibility of future criminal liability are set-aside. However, in so far
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as the dropping of the proceedings in contempt envisaged by Clause (b) of para 4 of
the order dated 15th February, 1989 is concerned, the same is left undisturbed.
Contention (E) is answered accordingly. - We might now sum up the conclusions reached, the findings recorded and
directions issued on the various contentions:
1) The contention that the Apex Court had no jurisdiction to withdraw to itself
the original suits pending in the District Court at Bhopal and dispose of the
same in terms of the settlement and the further contention that, similarly, the
Court had no jurisdiction to withdraw the criminal proceedings are rejected. It
is held that under Article 142(1) of the Constitution, the Court had the
necessary jurisdiction and power to do so. Accordingly, contentions (A) and
(B) are held and answered against the petitioners.
2) The contention that the settlement is void for non-compliance with the
requirements of Order XXIII Rule 3B, CPC is rejected. Contention (C) is held
and answered against the petitioners.
3) The contention that the Court had no jurisdiction to quash the criminal
proceedings in exercise of power under Article 142(1) is rejected. But, in the
particular facts and circumstances, it is held that the quashing of the criminal
proceedings was not justified. The criminal proceedings are, accordingly,
directed to be proceeded with. Contention (D) is answered accordingly.
4) The orders dated 14th /15th of February, 1989 in so far as they seek to prohibit
future criminal proceedings are held not to amount to a conferment of criminal
immunity; but are held to be merely consequential to the quashing of the
criminal proceedings. Now that the quashing is reviewed, this part of the order
is also set aside. Contention (E) is answered accordingly.
5) The contention (F) that the settlement, and the orders of the Court thereon, are
void as opposed to public policy and as amounting to a stifling of criminal
proceedings is rejected.
6) Having regard to the scheme of the Bhopal Gas Leak Disaster (Processing of
Claims) Act, 1985, the incidents and imperatives of the American Procedure
of ‘Fairness Hearing’ is not strictly attracted to the Court’s sanctioning of a
settlement. Likewise, the absence of a “Re-opener” clause does not, ipso facto,
vitiate the settlement. Contention (G) is rejected.
7) It is held, per invitium, that if the settlement is set aside the UCC shall be
entitled to the restitution of the US 420 million dollars brought in by it
pursuant to the orders of this Court. But, such restitution shall be subject to the
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compliance with and proof of satisfaction of the terms of the order dated 30th
November 1986, made by the Bhopal District Court. Contention (H) is
rejected subject to the condition aforesaid.
8) The settlement is not vitiated for not affording the victims and victimgroups an
opportunity of being heard. However, if the settlement-fund is found to be
insufficient, the deficiency is to be made good by the Union of India as
indicated in paragraph 72. Contention (I) is disposed of accordingly.
9) On point (J), the following findings are recorded and directions issued:
a) For an expeditious disposal of the claims a time-bound consideration and
determination of the claims are necessary. Directions are issued as
indicated in paragraph 77.
b) In the matter of administration and disbursement of the compensation
amounts determined, the guide-lines contained in the judgment of the
Gujarat High Court in Muljibhai v. United India Insurance Co, are
required to be taken into account and, wherever apposite, applied. Union
of India is also directed to examine whether an appropriate scheme under
the Unit Trust of India Act could be evolved for the benefit of the Bhopal
victims.
c) For a period of 8 years facilities for medical surveillance of the population
of the Bhopal exposed to MIC should be provided by periodical medical
check-up. For this purpose a hospital with at least 500 beds strength, with
the best of equipment and facilities should be established. The facilities
shall be provided free of cost to the victims at least for a period of 8 years
from now. The state Government shall provide suitable land free of cost.
d) In respect of the population of the affected wards, [excluding those who
have filed claims], Government of India shall take out an appropriate
medical group insurance cover from the Life Insurance Corporation of
India or the General Insurance Corporation of India for compensation to
those who, though presently symptomatic and filed no claims for
compensation, might become symptomatic in future and to those later-born
children who might manifest congenital or prenatal MIC related
afflictions. There shall be no upper individual monetary limit for the
insurance liability. The period of insurance shall be for a period of eight
years in future. The number of persons to be covered by this group shall be
about one lakh persons. The premia shall be paid out of the settlement
fund.
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e) On humanitarian consideration and in fulfilment of the offer made earlier,
the UCC and UCIL should agree to bear the financial burden for the
establishment and equipment of a hospital, and its operational expenses for
a period of eight years.
