Court case(1990) 1 SCC 613

On the night of 2-3 December 1984 methyl isocyanate gas escaped from the pesticide plant of Union Carbide India Ltd at Bhopal, killing thousands and injuring lakhs of people. To deal with the enormous number of claims, Parliament enacted the Bhopal Gas Leak Disaster (Processing of Claims) Act 1985, which conferred on the Central Government the exclusive right to represent and act in place of every person entitled to make a claim, to institute and conduct suits in India or abroad, and to enter into compromises. The Union sued Union Carbide Corporation, and in February 1989 the Supreme Court recorded a settlement of all claims for US$ 470 million. Charan Lal Sahu and others, by petitions under Article 32, challenged the validity of the Act, contending that it deprived the victims of their right to sue, that the Union was itself a joint tortfeasor and could not represent them, and that the victims had not been heard before the settlement.

The Constitution Bench upheld the Act. Sabyasachi Mukharji CJ, for the majority, held that the Act was a valid exercise of the State's power as parens patriae: where citizens are, by reason of poverty, ignorance, illiteracy and the sheer scale of a disaster, unable to vindicate their rights against a powerful multinational, the sovereign may step in to protect and represent them. The argument that the Union could not act because it was alleged to be a joint tortfeasor was rejected; the doctrine of necessity justified its role, and the Act preserved the victims' claims. The Act had to be read as imposing on the Union an obligation to provide interim relief and maintenance to the victims while the claims were pending. On the settlement, the Court observed that the victims should have been heard, and left the matter to the review petitions then pending against the settlement.