Centre’s plea for additional compensation for Bhopal Gas Tragedy victims rejected by the Supreme Court

The Supreme Court rejected a curative petition filed by the Central government seeking additional compensation to be paid by American chemical company, Union Carbide Corporation (UCC) to the victims of the 1984 Bhopal gas tragedy.

The Bhopal Tragedy, also known as the Bhopal Gas Disaster, remains one of the most devastating industrial disasters in history. It occurred on the night of December 2-3, 1984, in Bhopal, a city located in the central state of Madhya Pradesh, India. The disaster unfolded when a deadly gas leak occurred at the Union Carbide India Limited (UCIL) pesticide plant, causing widespread death, injury, and long-term health consequences for the affected population.

The Bhopal Tragedy was triggered by the release of a highly toxic gas called methyl isocyanate (MIC) from a storage tank at the UCIL pesticide plant. The leak resulted from a combination of factors, including inadequate safety measures, poor maintenance, and cost-cutting measures implemented by Union Carbide Corporation (UCC), the parent company based in the United States. The gas spread rapidly through the surrounding residential areas, affecting thousands of people in the immediate vicinity.

The immediate impact of the Bhopal Tragedy was catastrophic. Thousands of people died within days of the gas leak, primarily due to respiratory failure and other gas-related injuries. The exact death toll remains a subject of debate, with estimates ranging from several thousand to as high as 25,000. Additionally, hundreds of thousands of individuals were injured, many suffering from lifelong health complications such as respiratory disorders, eye problems, and reproductive issues. The tragedy also had severe environmental consequences, contaminating soil and water sources in the surrounding areas.

The legal aftermath of the Bhopal Tragedy has been protracted and complex. Following the disaster, numerous legal cases were filed against Union Carbide Corporation and its officials, both in India and the United States. The Indian government filed a lawsuit against UCC, seeking compensation for the victims and holding the company accountable for the disaster. In 1989, UCC reached a settlement with the Indian government, agreeing to pay $470 million as compensation, a figure widely criticized as inadequate given the scale of the tragedy. Further, the Indian government enacted the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985, which granted the government the exclusive right to represent and act on behalf of the victims in seeking compensation. The Act also allowed the government to initiate legal proceedings and reach settlements. Under this Act, the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme, 1985, was established to outline the procedure for filing and processing compensation claims.

The handling of the Bhopal Tragedy by both Union Carbide and the Indian government drew significant criticism. Union Carbide was accused of negligence, failing to implement adequate safety measures, and prioritizing cost-cutting over the welfare of its employees and the surrounding community. The Indian government faced criticism for its handling of the relief efforts, the delay in providing medical assistance to the victims, and the settlement reached with Union Carbide, which many believed to be grossly insufficient.

The Urgency and Reasonableness of the Settlement Amount

The court in the present petition observed that the settlement reached between Union Carbide Corporation (UCC) and the Indian government in the aftermath of the Bhopal Tragedy was driven by the urgent need for relief for the thousands of destitute victims.

The settlement amount of US $470 million was not arrived at through meticulous adjudication, but rather as a broad and general estimate to ensure swift compensation and avoid delays and uncertainties. The court emphasized that the question of reasonableness should not solely be based on precise calculations but rather on the ability to provide immediate relief to the victims.

The court took into account the prima facie figures presented, including approximately 3,000 fatal cases and around 30,000 cases of grievous and serious injuries. These numbers, supported by hospital records, formed the basis for determining the settlement amount. The allocation also considered specialized medical treatment and provisions for cases involving minor injuries, loss of personal belongings, and loss of livestock.

While the actual determination of compensation fell under the authority of the relevant bodies under the Bhopal Gas Leak Disaster (Processing of Claims) Act, the court emphasized that if the number of death or disability cases grew significantly and undermined the basic assumptions of the settlement, it reserved the right to review the settlement and exercise its powers accordingly.

However, when certain endeavours were made on behalf of victims from time to time to open up the settlement, these were opposed by the Union of India and were not successful. Moreover, even before this, certain private organisations had filed interlocutory applications for disbursal of the surplus amount left from the settlement fund wherein it was observed that approximately Rs. 1,503.01 crores from the settlement fund were available as of that date, and thus ordered that this amount be distributed on pro-rata basis to those persons whose claims had been settled.

Centre’s Plea

The Union of India claims that the quantum of the settlement made regarding the Bhopal gas tragedy was based on incorrect assumptions of facts and data. Further, there were errors in the computation of death cases, temporary injury cases, and minor injury cases.

UCC’s submission

1. A preliminary objection was raised regarding the maintainability of curative petitions after two decades of the settlement. The objection argued that it went against the limited scope of curative jurisdiction outlined in the Rupa Ashok Hurra v. Ashok Hurra & Anr.

“51. Nevertheless, we think that a petitioner is entitled to relief ex debito justitiae if he establishes (1) violation of principles of natural justice in that he was not a party to the lis but the judgement adversely affected his interests or, if he was a party to the lis, he was not served with notice of the proceedings and the matter proceeded as if he had notice and (2) where in the proceedings a learned Judge failed to disclose his connection with the subject-matter or the parties giving scope for an apprehension of bias and the judgment adversely affects the petitioner.”

2. If the settlement were to be set aside, it would revive the lawsuit. Consequently, the Union of India would need to present evidence to establish Union Carbide Corporation’s (UCC) liability, and UCC would be entitled to have the settlement amount of US $470 million returned with interest.
3. In 2007, attempts were made by private organizations to seek an enhancement of the settlement fund through interlocutory applications. However, the court rejected this request in the Bhopal Gas Peedith Mahila Udyog Sangathan case, stating that the settlement had already been decided. Any concerns regarding individual compensation should be addressed to the relevant authorities established under the Bhopal Gas Leak Disaster (Processing of Claims) Act. The Union of India had opposed the plea of the private parties and affirmed that claims had been adjudicated and compensation had been paid according to the scheme under the Act.

Supreme Court’s Decision

1. Questioning the Maintainability of Curative Petitions:

The maintainability of curative petitions after a significant time lapse was challenged, citing the limited scope of the court’s curative jurisdiction. The argument emphasized that the settlement had already undergone review, and the Union of India’s attempt to reopen the settlement was inconsistent with its previous stance. Granting such relief through curative petitions was deemed inappropriate and against the established principles of law.

2. Merits of the Settlement and Adequacy of Compensation:

While acknowledging the tragedy and sympathizing with the victims, it was argued that settled legal principles should not be disregarded, especially at the curative stage. The basis of the original settlement was to provide immediate relief to the victims, and the court had repeatedly affirmed this. The allocation of compensation was found to be in excess for all categories, with a significant amount remaining undisbursed. The Union’s negligence in not securing relevant insurance policies was highlighted, shifting the responsibility unfairly onto Union Carbide Corporation (UCC).

3. Invalid Grounds for Seeking Top-Up:

The Union of India’s claim for a “top-up” settlement was deemed unfounded and unsupported by legal principles. The settlement could only be set aside if fraud was proven, which was not the case here. The additional claims and costs presented by the Union were considered foreseeable at the time of settlement, including the provision of medical facilities and environmental concerns. Seeking annulment of the compromise would hinder closure and exacerbate delays, which was not in the best interest of the beneficiaries who required immediate relief after the tragedy.

Balancing the need for justice and expeditious resolution, the Supreme Court has taken the right decision to hold that settlement stands as a pragmatic solution which provided immediate succour to the victims. Reopening the settlement at this stage would be unjust and contrary to the interests of the beneficiaries who required timely relief. It is imperative to respect the settlement and focus on comprehensive efforts to support the affected individuals and prevent similar disasters in the future.