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1991 Supreme(SC) 533

SUPREME COURT OF INDIA
RANGANATH MISRA, CJI., K.N. SINGH, M.N. VENKATACHALIAH, A.M. AHMADI, N.D. OJHA, JJ.
Union Carbide Corporation, etc., etc, Petitioners
Versus
Union of India, etc. etc., Respondents
Civil Misc. Petns. Nos. 29377-A of 1988, 7942-43, 16093, 17965 of 1989, Review Petns. Nos. 229 & 623-24 of 1989, In Civil Appeal Nos. 3187-88 of 1988, (with W.P. Nos. 257, 297, 354, 379, 293, 399, 420, 231, 300, 378 & 382 of 1989) In C.A. Nos. 3187-88 of 1988 I.A. No. 1 of 1990 (in W.P. Nos. 281 of 1989), W.P. Nos. 741 of 1990 & 3461 of 1989), D/-3-10-1991.
Advocates appeared,
Mr. Soli J, Sorabjee, Attorney General, Mr. Shanti Bhushan, Ms. Indira Jaising, Mr. R.K. Garg, Mr. Danial Latif, Mr. B.R. L. Iyengar, Mr. P. P. Rao, Mr. Ashwani Kumar, Mr. D. N. M. Ghatate, Mr F.S. Nariman, Mr. Anil B. Dewan, Mr. Rajinder Singh, Sr. Advocates, Mr. Prashant Bhusan, Mrs. Kamini Jaiswal, Mr. C.L. Sahu, Mr. Anil Nauriya, Mr. Vibhuti Jha, Mrs. A. Mathur, Mrs. A. Mariarputham, Mr R.P. Saxena, Mr. R. Venkataramani, Mr. P.K. Manohar, Mr. Madan Lokur, Mr. A.L. Trehan, Ms. C.L. Latitha, Mr. Harish Uppal appeared in person, Mrs. K. Hingorani, Mr. R.B. Mehrotra, Ms. Lalitha Kaushik, Mr. D. K. Garg, Mr. Raju Ramachandran, Mr. Mukul Mudgal, Mr. S.R. Bhat, Mr. M.S. Ganesh, Mr. V.B. Mishra, Mr. A. M. Khanwilkar, Ms. Madhu Khatri, Mr. P. Parmeswaran, Mr. Sakesh Kumar, Mr. Satish Agnihotri, Mr. K. Kachwaha, Mrs. A. K. Verma, Mr. Ashok Sagar, Mr. Dadachanji, Vijay Gupta, Ms. A. Subhashini, Mr. C.S. Vaidyanathan, Ashok Singh Advocates with them, for the appearing Parties.

Headnote:

Constitution of India,1950 - Article 53 - Suit for realization of compensation - Grants or denies recovery of a sum of money - Incident was large in magnitude people died instantaneously and quite a good number of inhabitants of town suffered from several ailments - In some cases reaction manifested contemporaneously and in others effect was to manifest itself much later - Union Carbide Corporation a multi-national one has diverse and extensive international operations in countries like India Canada West Asia Far East African countries Latin America and Europe - It has a sister concern known as Union Carbide India Limited - In early hours of December - There was a massive escape of lethal gas from the MIC Storage Tank of the plant into the atmosphere which led to calamity - Held, Union of India has not agreed to bear this liability - And why should it burden the Indian tax-payer with this liability when it is neither held liable in tort nor is it shown to have acted negligently in entering upon settlement - Court has to reach a definite conclusion on the question whether the compensation fixed under agreement is adequate or otherwise and based thereon decide whether or not to convert it into a decree But on a mere possibility of there being a shortfall, a possibility not supported by any realistic appraisal of the material on record but on a mere apprehension quia time it would not be proper to saddle the Union of India with liability to make good the shortfall by imposing an additional term in settlement without its consent in exercise of power under Article 142 of Constitution or any statute or on premises of its duty as a welfare State - To court mind therefore it is impermissible in law to impose the burden of making good the shortfall on the Union of India and thereby saddle Indian tax-payer with the tort favors liability if at all – Petition Allowed

JUDGMENT

RANGANATH MISRA, C.J.I. :- I entirely agree with my noble and learned Brother Venkatachaliah and hope and trust that the judgment he was produced is the epitaph on the litigation. 1 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.

2. Early in the morning of December 3, 1984, one of the greatest industrial tragedies that history has recorded got clamped down on the otherwise quiet township of Bhopal, the capital of Madhya Pradesh. The incident was large in magnitude 2,660 people died instantaneously and quite a good number of the inhabitants of the town suffered from several ailments. In some cases the reaction manifested contemporaneously and in others the effect was to manifest itself much later.

3. Union Carbide Corporation (UCC for short), a multi-national one, has diverse and extensive international operations in countries like India, Canada, West Asia, the Far East, African countries, Latin America and Europe. It has a sister concern known as Union Carbide India Limited (UCIL for short). In the early hours of the 3rd of December, 1984, there was a massive escape of lethal gas from the MIC Storage Tank of the plant into the atmosphere which led to the calamity.

4. Several suits were filed in the United States of America for damages by the 1egal 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 of May, 1986, 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.

5. 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 plaintiffs, 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" 257 except that it is not deemed to be conclusive if :

"1. the judgment was rendered under a system which does not provide impartial tribunals of procedures compatible with the requirements of due process of law;

2. the foreign court did not have personal jurisdiction over the defendant."

Art. 53. Recognition of Foreign Country Money judgments. Although 5304 further provides that under certain specified conditions a foreign country judgment need not be recognized, none of these conditions would apply to the present cases except for the possibility of failure to provide UCC with sufficient notice of proceedings or the existence of fraud in obtaining the judgment, which do not presently exist but conceivably could occur in the future."

The Court rejected the plea advanced by UCC of breach of due process by non-observance of proper standards and ultimately stated:

"Any










































































































































































































































































































































































































































































































































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