Citation: Union of India v. Union Carbide Corporation
2023 SCC OnLine SC 264, pronounced on 14-03-2023

Jurisdiction: Supreme Court of India
Bench Strength:

• 5 Judges: Justice Sanjay Kishan Kaul, Justice Sanjiv Khanna, Justice Abhay S. Oka, Justice Vikram Nath, Justice J.K. Maheshwari

Case Type/Origin:

• Curative Petition

Case Status:

• Dismissed

Brief Facts:

• In December 1984, the Bhopal Gas Tragedy occurred due to a catastrophic release of Methyl Isocyanate (MIC) gas from the Union Carbide Corporation (UCC) plant, leading to thousands of deaths and numerous cases of disability.
• In 1989, a settlement was reached wherein UCC agreed to pay $470 million, which was deposited with the Supreme Court Registrar.
• The Union of India (UoI) filed a curative petition in 2010, seeking enhanced compensation.
• The UoI contended that the compensation awarded was based on incorrect assumptions and data, which led to an insufficient amount for the victims.
• The petition argued that there was a significant discrepancy between the compensation provided and the actual needs, citing underestimation in the number of victims and extent of injuries.

Issue:

• Whether the settlement amount of $470 million was insufficient and if the Supreme Court should enhance the compensation awarded to the victims of the Bhopal Gas Tragedy.

Arguments:

• Petitioner (Union of India): The UoI argued that the initial settlement amount was inadequate given the number of victims and the severity of the injuries. It claimed that the Court's earlier judgments were flawed due to incorrect data and assumptions. The petition emphasized that there was a shortage in compensation which the State should rectify.
• Respondent (Union Carbide Corporation): UCC argued that the settlement had been finalised and that no legal principle justified reopening it for additional compensation. UCC contended that the issues raised by the UoI were not based on fraud and that the settlement was meant to be final and comprehensive.

Decision:
The Supreme Court dismissed the curative petition, reaffirming the validity of the settlement amount. The Court noted:

• Sufficiency of Settlement: The Court observed that the settlement amount had been deemed sufficient in earlier proceedings and that the claimants had been reasonably compensated. The settlement was found to be in excess of the actual requirement based on the 2004 order.
   
• Negligence of the State: The Court criticized the UoI for failing to obtain insurance to cover potential deficiencies, a requirement outlined in the review judgment. The absence of such insurance was deemed a gross negligence on the part of the State.
   
• No Basis for Enhancement: The Court rejected the notion of "top-up" compensation, stating that settlements are either upheld or set aside if vitiated by fraud—no such fraud was alleged here. The argument that new figures of victims and injuries should lead to additional compensation lacked legal foundation.
   
• Liability for Environmental Damage: The Court concurred with UCC's argument that both the Union and State governments failed to properly manage and mitigate the environmental impact post-tragedy. However, this did not provide grounds for altering the settlement.
   
• Utilization of Funds: The Court ordered that Rs 50 crore, already held with the Reserve Bank of India, be used to address any pending claims under the Bhopal Gas Leak Disaster Act, 1985.
   
• Closure: The Court emphasized the importance of providing closure to prolonged litigation, reflecting the challenges of delay in the Indian judicial system.

Conclusion:
The judgment in Union of India v. Union Carbide Corporation reinforces the principle of finality in settlements while highlighting the responsibilities of the State in managing large-scale disasters. The Court's dismissal of the curative petition underscores its stance that settlements should not be revisited based on evolving figures or administrative oversights unless fraud or other significant legal defects are proven.

The decision reflects a balance between the need for adequate compensation and the finality of judicial settlements, ensuring that litigations do not drag on indefinitely. By directing the use of existing funds for pending claims, the Court aimed to provide relief within the framework of existing legal structures while closing the chapter on this long-standing litigation.