Bangalore Medical Trust v. B. S. Muddappa


Point (J) is disposed of in terms of the foregoing directions. 107

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106. Point (J) is disposed of in terms of the foregoing directions.

107. We might now sum up the conclusion reached, the findings recorded and directions issued on the various contentions:

(i) 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 Art. 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.

(ii) The contention that the settlement is void for non-compliance with the requirements of O. XXIII, R. 3B, C.P.C. is rejected. Contention (C) is held and answered against the petitioners.

(iii) The contention that the Court had no jurisdiction to quash the criminal proceedings in exercise of power under Art. 142 (1) is rejected. But, in the particular facts and circumstances, it is held that the quashing of the criminal proceedings was not justified.

(iv) 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.

(v) The Contentions (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.

(vi) 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.

(vii) It is held, per invitim, 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 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.

(viii) The settlement is not vitiated for not affording the victims and victim-groups and 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 (Para 98 of Report). Contention (I) is disposed off accordingly.

(ix) 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 (Para 103 of Report).

(b) In the matter of administration and disbursement of the compensation amounts determined, the guide-lines contained in the judgement of the Gujarat High Court in Mulkibhai v. United India Insurance Co., (1982) (1) 23 Guj LR 756) 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 of 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 about one lakh persons. The premia shall be paid out of the settlement fund.

(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.


108. In the result, the Review Petitions are allowed in part and all the contentions raised in the Review Petitions and the I. As in the civil appeals are disposed of in term of the findings recorded against the respective contentions. In the light of the disposal of the Review-Petitions, the question raised in the writ-petitions does not survive. The writ-petitions are dismissed accordingly without any order as to costs.

Ahmadi, J.:- 109. I have carefully gone through the elaborate judgement prepared by me learned Brother Venkatachaliah, J. and I am by and large in agreement with his conclusions except on a couple of aspects which I will presently indicate.

110. The points which arise for determination on the pleadings, documents and submission made at the Bar in the course of the hearing of these petitions have been formulated at points (A) to (J) in paragraph 8 of my learned Brother's judgment and the conclusions reached by him have been summarised and set out in the penultimate paragraph of his judgment at (i) to (ix), with their sub-paragraphs. I am in agreement with the conclusions at (i) to (vii) which answer Contentions (A) to (H). So far as conclusion (viii) pertaining Contention (I) is concerned, I agree that the settlement is not vitiated for not affording the victims or victim-groups and opportunity of being heard but I find it difficult to persuade myself to the view that if the Settlement Fund is found to be insufficient the shortfall must be made good by the Union of India. For reasons which I will presently state I am unable to comprehend how the Union of India can be directed to suffer the burden of the shortfall, if any, without finding the Union of India liable in damages on any count.

As regards conclusion (ix) referable to Contention (J) I am in agreement with sub-paragraphs (a), (b) and (d) thereof but so far as sub-paragraphs (c) and (e) are concerned I agree with the directions therein as I understand them to the only recommendatory in nature and not linked with the settlement.



111. In Charan Lal Sahu's case (1990) 1 SCC 613: (AIR 1990 SC 1480) this Court upheld the constitutional validity of the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (hereinafter called 'the Act'). In that case although the question referred to the Bench was in regard to the constitutional validity of the said enactment, submissions were made on the question whether the impugned settlement was liable to be set aside on the ground that it was in flagrant violation of the principles of natural justice, in that, the victims as well as the victim-groups had no opportunity to examine the terms of the settlement and express their views thereon. Mukharji, C.J. who spoke for the majority (Ranganathan, J.) and myself expressing separately observed that on the materials available "the victims have not been able to show at all any other point or material which would go to impeach the validity of the settlement". It was felt that though the settlement without notice to the victims was not quite proper, justice had in fact been done to the victims but did not appear to have been done. Taking the view that in entering upon the settlement regard should have been had to the views of the victims and for that purpose notice should have been issued before arriving at the settlement, the majority held that "post decisional notice might be sufficient but in the facts and circumstances of this case, no useful purpose would be served by giving regard to the fact that there are no further additional data and facts available with the victims which can profitably and meaningfully be presented to controvert the basis of the settlement and further having regard to the fact that the victims had their say or on their benefit their views have been agitated in the proceedings and will have further opportunity in the pending review proceedings". It would, therefore, appear that the majority had applied its mind fully to the terms of the settlement in the light of the data as well as the facts and circumstances placed before it and was satisfied that the settlement was a fair and reasonable one and a post-decisional hearing would not be of much avail. Referring to the order of May 4, 1989 carrying the Court's assurance that it will be only too glad to consider any aspect which may have been overlooked in consideration the terms of the settlement, Mukharji, C.J., opined that the further hearing which the victims will receive at the time of the hearing of the review petitions will satisfy the requirement of the principles of natural justice. K. N. Singh, J. while agreeing with the view expressed by Mukharji, C. J. did not express any opinion on the question of inadequacy of the settlement. In the circumstances it was held that there was not failure of justice necessitating the setting aside of the settlement as violative of fundamental rights. After stating this, the learned Chief Justice observed that while justice had in fact been done, a feeling persisted in the minds of the victims that they did not have a full opportunity to ventilate their grievances in regard to the settlement. In his view this deficiency would be adequately met in the hearing on the Review Petitions (the present petitions).After taking notice of the aforesaid view expressed by the learned Chief Justice, Ranganathan, J. (myself concurring) observed as under (AIR 1990 SC 1480 at Pp. 1561-62) :

"Though we are prima facie inclined to agree with him that there are good reasons why the settlement should not be set aside on the ground that the principles of natural justice have been violated quite apart from the practical complications that may arise as a result of such an order, we would not express any final opinion on the validity of the settlement but would leave it open to be agitated to the extent permissible in law in the review petition pending before this Court."


It is therefore, manifest from the above that the Sahu Bench was 'prima facie' of the view that the settlement was not liable to be set aside on the ground that the principles of natural justice had been violated. Mukharji, C.J. went on to say that no useful purpose would be served by as post-decisional hearing and that the settlement was quite reasonable and fair. Of course K. N. Singh, J. did not express any opinion on the inadequacy of the settlement amount but he was otherwise in agreement with the view expressed by Mukharji, C.J. on all the other points. The view of Ranganathan, J. and myself is evident from the passage extracted above.

112. This case has gone through several twists and turns. One of the world's worst disasters occurred on the night between 2nd and 3rd December, 1984 choking several to death and injuring thousand of residents living near about the industrial plant of UCIL. Litigation was initiated on behalf of some of the victims in the U.S. District Court. Southern District of New York presided over by Judge Keenan. After the enactment of the Act on 29th March, 1985, the Union of India also approached Judge Keenan with a complaint. Judge Keenan ultimately terminated the proceedings before him on the ground of 'forum-non-convenience'. There after the Union of India representing the victims filed a suit for damages in the Bhopal District Court against the UCIL as well as the UCC in which an order for interim compensation was made against which an appeal was filed in the High Court. The matter was brought to this Court against the High Court order. It was during the hearing of the said matter that a Court assisted settlement was struck and orders were passed recording the same on 14th/15th February, 1989. On 4th May, 1989 this Court gave its reason for the settlement. Soon a hue and cry was raised against the settlement by certain victims and victim groups. In the meantime petitions were filed in this Court challenging the constitutional validity of the Act on diverse grounds. In the course of the hearing of the cases raising the question of validity of the Act submissions were also made regarding the validity of the settlement. The hearing continued from 18th March, 1989 to 3rd May, 1989 and the same received wide publication in the media. The judgment in the said case was pronounced on 22nd December, 1989 upholding the validity of the Act. In the meantime petitions were filed under Art. 137 of the Constitution to review the settlement. Several writ petitions under Art. 32 also came to be filed. These came up for hearing before a Constitution Bench prescribed over by Mukharji, C.J. The hearing continued for more than two weeks and media carried reports of the day to day Court proceedings throughout the country. Unfortunately, before the judgement could be pronounced a tragic event took place. Mukharji, C.J. passed away necessitating a rehearing by a Constitution Bench presided over by Misra, C.J. This hearing lasted for about 18 to 19 days and received the same wide coverage in the press, etc. In fact considerable heat was generated throughout the Court hearings and the press also was none too kind on the Court. It is, therefore, difficult to imagine that all those who were interested in the review of the settlement were unaware of the proceedings. Mr Nariman has placed on record a number of press-clippings to make good his point that newspapers having large circulation throughout the country carried news regarding the settlement and subsequent attempts to challenge the same. Can it then be said that the victims were unaware of the proceedings before this Court? To say so would be to ignore the obvious.

113. In view of the observations in Sahu's case (AIR 1990 SC 1480), the scope of the inquiry in the present petitions can be said to be a narrow one. One way of approaching the problem is to ask what the Court could have done if a pre-decisional hearing was afforded to the victims. The option obviously would have been either to approve the terms of the compromise, or to refuse to super add the Court's seal to the settlement and leave the parties to go to trial. The Court could not have altered, varied or modified the terms of the settlement without the express consent of the contracting parties. If it were to find the compensation amount payable under the settlement inadequate, the only option left to it would have been to refuse to approve the settlement and turn it into a decree of the Court. It could not have unilaterally imposed any additional liability on any of the contracting parties. If it found the settlement acceptable it could turn it into a Court's decree. According to the interpretation put by the majority in Sahu's case on the scope of Ss. 3 and 4 of the Act, a pre-decisional hearing ought to have been given but failure to do so cannot vitiate the settlement as according to the majority the lapse could be cured by a post-decisional hearing. The scope of the review petitions cannot be any different at the post-decisional stage also. Even at that stage the Court can either approve of the settlement or disapprove of it but it cannot, without the consent of the concerned party, impose any new or additional financial obligation of it. At the post-decisional stage it must be satisfied that the victims are informed of or alive to the process of hearing, individually or through press report, and if it is so satisfied it can apply its mind to the fairness and reasonableness of the settlement and either endorse it or refuse to do so. In the present case the majority speaking through Brother Venkatachaliah, J. has not come to the conclusion that the settlement does not deserve to be approved nor has it held that the settlement-fund is inadequate. Merely on the apprehended possibility that the settlement fund way may prove to be inadequate, the majority has sought to saddle the Union of India with the liability to make good the deficit, if any. The 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 the settlement? The Court has to reach a definite conclusion on the question whether the compensation fixed under the 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, quja timet, it would not be proper to saddle the Union of India with the liability to make good the shortfall by imposing an additional term in the settlement without its consent in exercise of power under Art. 142 of the Constitution or any statute or on the premises of its duty as a welfare State. To my mind, therefore, it is impermissible in law to impose the burden of making good the shortfall on the Union of India and thereby saddle the Indian tax-payer with the tort-feasor's liability, if at all. If I had come to the conclusion that the settlement-fund was inadequate, I would have done the only logical thing of reviewing the settlement and would have left the parties to work out a fresh settlement or go to trial in the pending suit. In Sahu's case as pointed out by Mukharji, C.J. the victims had not been able to show any material which would vitiate the settlement. The voluminous documentary evidence placed on the record of the present proceedings also does not make out a case of inadequacy of the amount, necessitating a review of the settlement. In the circumstances I do not think that the Union of India can be saddled with the liability to make good the deficit, if any, particularly when it is not found to be a tort-feasor. It's liability as a tort-feasor, if at all, would have to be gone into in a separate proceeding and not in the present petitions. These, in brief, are my reasons for my inability to agree with the latter part of conclusion (viii) imposing a liability on the Union of India to make good the deficit, if any.


114. One word about the shifting stand of the Union of India. It entered into a Court assisted settlement but when the review applications came up for hearing it supported the review petitioners without seeking the Court's leave to withdraw from the settlement on permissible grounds or itself filing a review petition. To say the least this conduct is indeed surprising.

115. I would have liked to reason out my view in greater detail but the constraint of time does not permit me to do so. The draft of the main judgement was finalised only yesterday by noon time and since the matter was already listed for judgement today, I had only a few hours to state my views. I had, therefore, no time to write a detailed judgment but just a little time to indicate in brief the crux of some of the reasons for my inability to agree with the view expressed in the judgement of Brother Venkatachaliah, J. on the question of Union of India's liability to make good the deficiency, if any.

Order accordingly.





V. Lakshmipathy v. State of Karnataka

AIR 1992 Karnataka 57

Writ Petition No. 23138 of 1980, D/-9-4-1991

H. G. Balakrishna, J.

Constitution of India, Arts. 226, 21 – Environment - Protection of - Outline Development plan of City earmarking area for residential purpose - Industrialists establishing industries in said area in violation of provisions under various Acts - Persistent pollution thereby detrimental to public health - Authorities neither denying existence of pollution nor explained measures taken to control it - Change of use of land; held, illegal - Operation of industrial units directed to be stopped.


Karnataka Town and Country Planning Act (1961), Ss. 9, 14.

Karnataka Municipal Corporation Act (1976), Ss. 35, 505.

Urban Land (Ceiling and Regulation) Act (1976), Ss. 6, 10.

Bangalore Development Authority Act (1976), S. 32.

Environment - Protection of - Use of earmarked residential area for industries - Pollution thereby - Industries directed to be stopped.

Pollution control - Industries set up in residential area - Directed to be stopped.

(Paras 28, 29, 30)

Cases Referred: Chronological Paras

AIR 1988 SC 1037: (1987) 4 SCC 463 26

AIR 1988 1115: (1988) 1 SCC 471 26

AIR 1987 SC 1086 26

(1966) 1 QB 380: (1965) 3 WLR 426: (1965) 2

All ER 836, R. v. Paddingtan Valuation Officer

Ex. P. Peachery Property Corporation Ltd 28

(1957) 55 LGR 129, R. v. Thomes Magistrate's



Court Ex. P. Greenbaum 28

Order:- The petitioners, who are the residents of Banashankari Extension I Stage, Block-I, which includes a part of N. R. Colony and Ashokanagar, have embarked on public interest litigation actuated by common cause in defence of public interest. The petitioners are aggrieved by the location and operation of industries and industrial enterprises in a residential area in alleged gross violation of the provisions of the Karnataka Town and Country Planning Act. The petitioners are questioning industrial activity in residential locality by establishing and running factories, work-shops, factory sheds, manufacture of greases and lubricating oils by distillation process and also production of inflammable products by respondents-17 to 49. According to the petitioners, these questionable activities are being carried on in the area comprising of Sy. Nos. 39/1, 39/2A and 39/2B of Yediyur Nagasandra village, Bangalore. The land situate in Sy. No. 39/1 is called "Vajapeyam Terrace Gardens" and the land in Sy. Nos. 39/2A and 39/2B are known as 'Kalyani Gardens'. It appears that in respect of these areas, agreements were executed between the erstwhile City Improvement Trust Board (C.I.T.B) and their owners and successors for the purpose of formation of a lay-out in accordance with law, but the agreements were not implemented for reasons best known to the said Board. It is stated that the Health and Municipal Administration Department of the State of Karnataka issued a direction bearing No. HMA 35 MNX 72 dated 4-7-1972 to the erstwhile C.I.T.B. to handover the said areas to the Corporation of the City of Bangalore (Respondent-14 herein). However, it appears that the direction was not acted upon and these areas were not handed over to the Corporation. Nevertheless in spite of the fact that the said areas were not handed over to the Corporation, taxes as being imposed and collected by the Corporation. The petitioners have stated that there are portions which are not converted though they are reserved Kharab land granted in accordance with the Land Grant Rules falling within the jurisdiction of the revenue authorities and strangely enough the revenue authorities have failed to exercise jurisdiction and control over these portions and have not enforced the provisions of relevant law, rules and regulations in respect of these lands. In other words, the entire area falling in Sy. Nos. 39/1, 39/2A and 39/2B became virtually "no man's land" because of alleged inaction and abdication of power and control by the development authority including the erstwhile C.I.T.B., the Bangalore Development Authority, the Corporation of the City of Bangalore and the revenue authorities of the State Government thereby resulting in betrayal of public interest on account of imperviousness to duty, callousness, non-feasance and utter lack of supervisory, administrative and regulatory control over the area in question. The petitioners have also complained of the serious threat to public health on account of environmental hazards posed by the industries and industrial activity. According to the petitioners, the provisions of the Karnataka Town and Country Planning Act., 1961 have been violated and the establishment and running of the industries in the area are contrary to the Outline Development Plan and zoning of land use as dictated by statute. It is specifically alleged that some of the industries have been floated under licenses said to have been issued by the Village Panchayat of Kathiraguppe even though the said area falls within the village Yediyur Nagasandra beyond the limits of Kathiraguppe village and, therefore, beyond jurisdiction. However, it is pointed out that these industrial units have succeeded in securing public services and utilities such as electricity, water etc., from respondents 12 and 13 to which they are not legally entitled. It is also stated that in the light of Section 14 of the Karnataka Town and Country Planning Act, there could be no change in land use contrary to the Act and no authority could grant any license for use of the land contrary to what the said provision earmarks. In short, the allegation is that the establishment of these industrial units is ab initio illegal. In regard to Sy No. 39/1, the petitioners have impeached that various orders and directions issued by the competent authorities for the purpose of execution of agreements with the erstwhile C.I.T.B. in order to obtain sanction of building plans etc., have been flagrantly flouted and transfer of lands have been effected by the jugglery of dissolution and reconstitution of partnerships from time to time for the purpose of manoeuvring in order to locate industries contrary to law, by devious methods circumventing Outline Development Plan and Comprehensive Development Plan. The petitioners have taken strong exception to extensive area of lands reserved by Government being appropriated for private use and activities not consistent with law without a check. A case on hand is specifically mentioned by the petitioners wherein one Mrs. Seethamma executed an agreement in favour of the erstwhile C.I.T.B. On 22-10-1973 in respect of lands in Sy. Nos. 39/2A and 39/2B based on an alleged sanction of a lay-out for industrial purpose, the sanction being subsequent to 4-7-1972 when the Health and Municipal Administration Department of the Government of Karnataka had directed the erstwhile C.I.T.B. to handover the area vide order No. HMA 35 MNX 72 dated 4-7-1972. The petitioners have pointed out that sanction for industrial purpose is itself ab initio illegal since it was in contravention of the provisions of the Town and Country Planning Act as well as the Outline Development Plan which declared the said area as residential zone. It is also pointed out that none of the conditions incorporated in the aforesaid agreement dated 22-10-1973 were complied with, the conditions being (a) maintenance of open space as required and in accordance with the sanctioned plans; (b) prohibition on use of sites without the approval of the erstwhile C.I.T.B.; (c) prohibition on alteration of the dimensions as approved in the plan; (d) intimation of date of commencement and programme of execution of lay-out work under the supervision of the Engineers of the erstwhile C.I.T.B. and (e) due compliance with the rules, regulations, bye-laws and standing orders regarding obtaining of licences.



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