As the nation eagerly awaits for the GoM report to the Prime Minister on Bhopal gas tragedy, the ministers’ group surely must have taken note of the hard bargain resorted to by the Union Carbide Corporation to settle for $470 million compensation in 1989 and the Supreme Court making the government accountable to meet any
contingency arising due to the shortage of funds in future. This has emerges from the May 4, 1989 and 1991 judgments of different five-judge benches on the issue of $470 million settlement with the UCC by the government, approved by the court in its orders of February 14 and 15, 1989.
In May 4 judgment delivered by the same bench, headed by the then Chief Justice of India R.S. Pathak, which had approved the settlement, states that the UCC had entered into a hard bargaining before agreeing to pay $470 million.
The UCC counsel Fali Nariman submitted that the company “stands by its earlier offer of $350 millions and also submitted that his client had also offered to add appropriate interest, at the rates prevailing in the USA, to the sum, which raised the figure to $426 millions, his client was of the view that the amount was the highest it could go up to,” the verdict says, pointing out that the Centre had scaled down its demand to $500 million from initial $3 billions.
The judgment further says that at one point UCC had even taken the position that the case be decided on merits and till the final decision, the money transported by it to India sent back to the US.
On the face of deadlock, the court used its pressure on both sides asking them to arrive at a mutually agree sum as the judges felt that if the case was allowed to be decided on merits, it might take another 8 to 10 years for and the victims could not be allowed to suffer that long.
On the “adequacy” of the settlement, the court had told the parties that if any one could show that the UCC had any point time offered more than $470 millions, then it was ready to set aside the February 14 and 15, orders approving the settlement deal and “relegate” the company and the government to their earlier positions.
In this context, the judgment of 1991 by another five-judge bench, headed by the then CJI Ranganath Misra, becomes very important, as it had made the government accountable to meet the “deficiency” in the compensation sum, if any “contingency” arose in future to this effect.
“But, such a contingency may not arise having regard to the size of the settlement-fund. If it should arise, the reasonable way to protect the interests of the victims is to hold that the Union of India, as a welfare state and in the circumstances in which the settlement was made, should be found wanting in making good the deficiency, if any. We declare accordingly,” CJI Misra’s bench had ordered.