UNION CARBIDE CORPORATION vs UNION OF INDIA & ORS.

Author: Richa Bohra, 3rd Year, BBA LL.B (H), Amity Law School, Amity University Rajasthan

Petitioner:  Union Carbide Corporation

Respondent:  Union Of India

Court: Supreme Court of India

Equivalent citations: 1990 AIR 273, 1989 SCC (2) 540, I (1990) ACC 214, JT 1989 (2) SC 454, (1989) 3 SCC 38, 1989 3 SCR 128, 1989 (2) UJ 285 SC

Date of Judgement:  04/05/1989

Bench/Quorum:  Pathak, R.S. (Cj), Venkataramiah, E.S. (J), Misra Rangnath, Venkatachalliah, M.N. (J), Ojha, N.D. (J)

INTRODUCTION:

More than thirty-two years have passed since the dreadful night of 3rd December 1984 when a gas leak killed thousands of individuals and permanently disabled the survivors. The Bhopal Gas leak disaster remains freshly preserved within the minds of all those who survived and are familiar with the suffering of their predecessors. Till date, it is the world’s worst industrial disaster. The tragedy was a result of the leak of the methyl isocyanate (MIC) gas from the Union Carbide India Ltd. (UCIL) plant that made factory-made pesticides. On the night of 2nd and 3rd December 1984, there was a leak of the MIC gas which is taken into account to be the foremost poisonous chemical in industrial use. The people in Bhopal were exposed to the poisonous gas and the immediate effects of the gas were coughing, vomiting, severe eye irritation and a sense of suffocation. This led to the evolution of the principle of Absolute Liability.

FACTS OF THE CASE:

In 1934, Union Carbide India Ltd in India manufactures the batteries, chemicals, pesticides and different industrial merchandise. The Union carbide was 51 percent holder within the company. In 1970, a brand new chemical plant was started by UCIL in a very densely populated area of Bhopal (Madhya Pradesh).

Despite repetitive complaints relating to the security measures of the pesticide plant by the agronomic engineer of the plant, UCIL ignored these complaints on manufacturing dangerous & hazardous chemicals within the plant. On the prevailing night of 02nd-3rd Dec 1984, the methyl isocyanate (MIC) gas (approx. forty tons) leaked out of UCIL in the surroundings of Bhopal. Because of the natural event of this of 1984 in Bhopal as many as 2600 individuals straight off died and also the cost rose to a massive of 8000 people inside two weeks, whereas tens of thousands were displaced, and affected. The residents of Bhopal are suffering even nowadays because of this ghastly catastrophe that happened because of the negligence of an international company.

Due to increase in a large number of cases in the courts the government of India decides to produce speedy justice to the victims and therefore, enacted Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (the Bhopal Act)[1] creating the Union of India representative of the victims by the virtue of the philosophical system of “Parens patriae”. The government-owned 49% stake at UCIL, which would make it partially liable for the Bhopal Gas Leak. However, the constitutional validity of this act was challenged in the Supreme Court in Union Carbide Corporation v. Union of India on the bottom that since the Union of India was additionally the owner of minority shareholders, they’re additionally chargeable for the disaster. However, the court by applying CharanlalSahu v. Union of India[2] justified the act and upheld its validity.

However, the Union of India shockingly set out to litigate the case in foreign courts rather than fighting it in Indian courts. The Union of India to support its stance of selecting American courts contended the following:

  • Indian system isn’t applicable to entertain such a massive matter as well as the failings of considerable backlogs within the cases.
  • Both Indian Lawyers and Indian law isn’t well versed with the laws of Torts so, because of the gap in the law, it’s probable that justice won’t be delivered.

Therefore, all the appeals against Union carbide were clubbed into one single petition before Keenan’s court. The Keenan’s Court directly discharged the case on the grounds of forum non-conveniens. The American court was of the view that concerning everyone, the relevant evidence is among the jurisdiction of India, therefore, it commands that Indian courts are a higher forum for this matter.

PETITIONER’S ARGUMENT: 

The petitioner’s contended that the claim of compensation for the damages caused by the respondent. It is well-known that in fatal-accident-actions where children are concerned, the compensation awardable is in conventional sums ranging from Rs. 15,000/- to Rs. 30,000/- in each case. In the present case, a large number of children of very young age died. Even in the case of adults, according to the general run of damages in comparable cases, the damages assessed on the usual multiplier-method in the case of income groups compared to those of the deceased-persons would be anywhere between Rs. 80,000/- and Rs. 1,00,000/-. The quantum of compensation awarded by the High Court was very less.

RESPONDENTS ARGUMENT:

The respondents argued that the Union of India should also be made partially made liable for the compensation as American giant Union Carbide with Union of India has started “Union Carbide India Limited” where the share of Union Carbide was 51%  and rest was of Government of India.

JUDGMENT:

Union of India representing the victims secured 470 million USD as compensation from the Union Carbide Corporation. In September 1986 Union of India initiated proceedings against Union Carbide Corporation in Bhopal District Court. The District Court asked Union Carbide Corporation to deposit as the addition of 350 million as interim compensation. The Union Carbide Corporation appealed the judgement of the District Court to the High Court, where the High Court reduced the compensation amount to 250 million.

Finally, Union Carbide Corporation reached SC. Union Carbide on February 14, 1989, was ordered to pay a hefty compensation of US $470 Million before March 31, 1989. The amount which was given as compensation is slight in comparison to the damage which was caused. Due to the occurrence of this event, a number of legislations were enacted such as the Environment Protection Act, 1986[3], Public Insurance Act,1991[4] etc. This led to the evolution of the principle of Absolute Liability. More strict regulations have been made but still lack enforcement, although the situations have improved. But if we have a look at the economic process, the unregulated industries prove to be a threat to public safety and the environment.

ANALYSIS

One of the biggest problems that the Bhopal Gas tragedy raised was the issue of absolute liability. This issue was mentioned in the case of M.C Mehta v Union of India[5]. The principle of absolute liability states that when an enterprise is engaged in hazardous or inherently dangerous industry and if any damage leads to an account of such activity then the enterprise is completely liable to compensate such damage, further the enterprise cannot claim that it took reasonable care and there was no negligence on its part.

This is the principle of absolute liability and liability will be mounted even if there’s no negligence on the part of the suspect. Within the case of absolute liability, even the defences offered below strict liability wouldn’t apply. Although the accident is a freak incident, liability would still be mounted. In such a case, it might not be a defence to argue that the proximate reason behind the accident or the proceedings, caused the accident which wasn’t carrying such risky activity, however, it really is an Act of God or that it’s because of some third-party intervention. Even the corporation had taken extreme precautions to confirm that such events don’t occur, responsibility would still be mounted on them. This principle of absolute liability in India evolved primarily owing to the arousal that the Bhopal Gas Disaster and also the Oleum Gas Leak case gave.

The Bhopal Gas Tragedy is additionally during an approach, answerable for the passing of the general public insurance Act, 1991 that provides for mandatory insurance of any unit or mill endeavour a risky activity. Apart from all of this, the tragedy has recently been a lot mentioned within the light-weight of the Nuclear Liability Bill. This bill encompasses a heap of polemic provisions that aim at capping the overall liability just in case of a nuclear accident. The bill conjointly prohibits the victims from suing the suppliers directly and permits them to recover solely from the operators. The bill conjointly lays a cap on the number that an operator will pass through the suppliers. In the series of the events that followed Bhopal, it’s clear that there’s a necessity for a correct mechanism of compensation and it’s necessary that any reasonable cap on liability ought to be removed because it would be unconstitutional.


[1] Bhopal Gas Leak Disaster (Processing Of Claims) Act, 1985 ACT NO. 21 OF 1985 

[2] 1990 AIR 1480.

[3] THE ENVIRONMENT (PROTECTION) ACT, 1986. No. 29 OF 1986.

[4] THE PUBLIC LIABILITY INSURANCE ACT, 1991 ACT NO. 6 OF1991. 

[5] AIR 1987 S.C 1086.


Editorial Credits: Sanjali Das

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