Union Carbide Corporation vs Union of India

S.K. Seth, J.

In Civil Suit No. 1113 of 1986, pending in the Court of Shri M.W. Deo, District Judge, Bhopal, the defendant-Union Carbide Corporation made an application on 6-5-1988 praying the District Judge to dissociate himself from the suit It was clear from a perusal of the said application that though it was described to be a ''recusal application'' it was in fact one made to the District Court u/s 24 of the CPC to transfer the suit pending before it for trial and disposal to any Court subordinate to it and competent to dispose of the same. The main ground urged in the application was that the manner in which the District Judge had passed an order of interim relief against the defendant-UCC on 17-12-1987 directing it to deposit a sum of three thousand five hundred million rupees for payment of ''substantial interim compensation and welfare measures'' for the tort vic-tims represented by the plaintiff-Union of India created a reasonable appre-hension in its mind that the District Judge had pre-judged and pre-deter-mined the basic issue arising for consideration in the case and committed himself to pass a decree in favour of the plaintiff Union of India. The appli-cation was turned down by the District Judge vide his order dated 16-6-1988. It is being aggrieved by it that the defendant-UCC has filed the present revi-sion under Sec. 115 C.P.C. in this Court.

Now, in order to appreciate properly the points arising for consi-deration in the present revision, the facts leading to the passing of the impugned order dated 16-6-1988 by the District Judge may be briefly stated: On the night intervening 2nd and 3rd of December 1984, there occurred at Bhopal in the State of Madhya Pradesh in India one of the worst and most tragic industrial disaster known to mankind in peace time. There was a massive escape of a highly noxious and abnormally dangerous gas called Methyl Isocyanate (for short ''MIC'') from the chemical plant of an enterprise engaged in manufacturing MIC based agricultural pesticides. The gas had been minufactured in the MIC unit of the chemical plant and had been stored in one of the storage tanks of the said unit for the manufacture of SEVIN carbaryl. After the escape from the plant, the gas spread over a large inhabited area of Bhopal city and its adjoining countryside and caused un-precedented damages to life and property.

It was an undisputed fact that as per the legal status permissible under the relevant Indian statute i e. the Indian Companies Act the chemical plant from which the lethel MIC gas escaped on the fateful night resulting in the disaster belonged to a corporate entity named ''Union Carbide India Limited'' (for short ''UCIL'') which was a public company registered under the said statute. But, then, it was also an undisputed fact that upto 1977-78 60% of the equity ownership of the said Indian company belonged to the defendant-UCC and that even thereafter the said defendant continued to retain more than half i.e. 50.9% of the said ownership. The defendant-UCC was a foreign corporation incorporated under the laws of the State of New York in the United States of America.

It was in the abovesaid circumstances that after the occurrence of the unprecedented disaster in 1984 the Indian Parliament enacted the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 under the provisions of which the Union of India acquired for itself the exclusive right to represent and act in place of persons having claims arising from the disaster. There-after, after making an unsuccessful attempt to sue the defendant-UCC for damages in an American Court i.e the District Court of Southern District of New York the plaintiff-Union of India filed a suit for damages representing the interests of all the claimants against the said defendant in the Court of District Judge at Bhopal on 5-9-1986. According to the plaintiff-Union of India, the defrndant-UCC was the patent corporation of a multi-national enterprise of which the Indian company was one of the subsidiaries. According to it, it was the defendant- UCC which had in reality designed, construc-ted and owned the Bhopal plant through its Indian subsidiary and operated, managed and controlled the same at all material times through it. Thus, according to it, it was the defendant UCC which was liable to pay damages for loss of life and property caused as a result of the disaster.

The defendant-UCC entered its appearance in the Bhopal suit on 30-10-1986 and filed its written statement along with its so called counter claim and set off on 16-12-1986. It was denied by it that it had designed, constructed, owned, operated, managed or controlled the Bhopal plant through the Indian company or that the Indian company had been its subsi-diary company. Accordingly, it was also denied by it that it was liable to pay any damages for the loss of life and property caused as a result of the disaster. It was alleged by it that even otherwise the massive leak of the lethel gas from the storage tank of the Bhopal plant had occurred due to such causes and in such circumstances that it (i.e. the defendant-UCC) could not be held liable to pay damages for any loss resulting from it.

On 6-12-1986, along with its written statement, the defendant-UCC made an application seeking further and better particulars from the platntiff-Union of India regarding its suit claim. The District Judge allowed the application partly Tide his order dated 23-7-1987 and directed the plaintiff Union of India to furnish the requisite particulars within a month. On 27-8-1987, with a view to supply the particulars sought from it, the plaintiff-Union of India made an application for amendment of plaint. The application was allowed by the Court vide its order dated 4-9-1987. As per figures mentioned by the plaintiff-Union of India in the amended plaint, a total number of about 2660 persons had suffered agonising and excruciating deaths as a result of the disaster. Thousands of persons had sustained serious and perma-nent injuries including acute respiratory distress syndrome, ocular and gas-trointestinal injuries and pain, suffering and mental distress. Total number of persons who had sustained serious injuries was stated to be between 30,000 and 40,000. In addition a large number of animal population, inclu-ding cattle, had become victims of the disaster. So also, there had been exten-sive damage caused to the natural environs of the city and the adjoining countryside. As per the amended plaint, the total number of claims received by the State Government in respect of the disaster was stated to be 5,36,770. It was estimated that the value of total claim (including death and personal injury cases) would exceed thirty nine hundred crore rupees (i.e. U.S. three billion dollars) if the case was tried to judgment through all the stages.

In the meanwhile, on 2-4-1987, the District Judge had made a suo motu written proposal to the parties to the suit for considering grant of subs-tantial reconciliatory relief to the gas victims. On 17-8-1987, the defendant-UCC filed a written response to the Court''s proposal. On 27-8-1987, the plaintiff-Union of India filed its reply to the defendant-UCC''s response. On 4-9-1987, the Court directed the parties to continue making best efforts for a just and overall settlement in the interest of the gas victims and granted them time till 30-10-1987 for the purpose. On 30-10-1987, the Court noted the fact that both the parties were making efforts for a settlement and directed that a report on further progress in the matter be made on 18-11-1987. On 18-11-1987, the Court recorded the fact that no settlement had taken place between the parties and it was fit to set down the case for further hearing in a time-bound manner. On 27-11-1987, it was directed by the Court that the issue relating to grant of interim relief would be heard on 7-12-1987. On 5-12-1987, the defendant-UCC made further written reply to the Court''s suo motu pro-posal for grant of interim relief.

The objections raised by the defendant-UCC to the trial Court''s proposal for grant of interim relief to the gas victims were as follows : (1) The Court had no jurisdiction either under the provisions of the general law or those of the Bhopal Gas Leak Disaster (Processing of Claims) Act to grant any such interim relief. (2) When the defendant-UCC had denied its tortious liability in the matter and consequently the very right of the victims of the disaster to claim any damages from it was under challenge in the case, the grant of any interim relief by the Court was bound to suffer fromthe vice of prejudging the basic issue relating to liability arising for considera-tion in the case. (3) In a suit of the particular type, it was obligatory for the plaintiff-Union of India to give full particulars of the persons for whom and on whose behalf the action was brought and also of the nature and extent of loss and the quantum of damages claimed in respect of each of such persons. In the absence of the plaintiff Union of India having done so, the suit filed by it was not properly constituted and there was no warrant for the Court granting any interim relief. (4) Lastly, in view of the State Government and the Union of India have already allegedly spent large sums of money to pro-vide relief to the gas victims there remained no need for the Court to grant any further relief to them by way of interim relief.

On 8-12-1987, the trial Court heard arguments of the parties on its suo motu proposal for grant of interim relief to the gas victims. As men-tioned at the beginning of this order, it gave its decision in the matter vide its order dated 17-12-1987. As per discussion in Paras 7 to 20 of the order, it seemed to be of the view that under the provisions of Sec. 94 (e) coupled with Sec. 151 of the CPC the civil Court had jurisdiction to grant interim compensation in a suit for damages based on tort. In paras 21 and 22, it seemed to be of the view that not only there was nothing con-tained in the Bhopal Gas Leak Disaster Act to prevent exercise of any such jurisdiction by the civil Court but also that Clause 10(b) of the scheme framed under the said Act did contain a provision with regard to ''disbursal of amount of interim relief.

It is clear from discussion in paras 23 and 26 to 28 of the order passed by the trial Court that it proceeded on the assumption that in a suit for damages based on tort it could exercise its abovesaid jurisdiction to grant interim compensation without making any reference to the merits of the case of the plaintiff Union Of lndia against the alleged tort-feasor i.e the defendant-UCC. It thought that it was not necessary for it to record any definite find-ing on the point whether the material on record disclosed any prima facts case regarding tortious liability of the defendant-UCC to pay compensation to the victims of the disaster represented by the plaintiff-Union of India.

Thus, in para 23 of the order, the trial Court, while refering to the submission put forth on behalf of the plaintiff-Union of India as regards the civil Court having the requisite jurisdiction to reach the defendant-UCC beyond the corporate vell of the Indian company, avoided giving any clear answer to the said submission and contented itself by observing that there was no need to dwell on the point in full depth as the matter was at the inter-locutory stage.

Again, in para 26 of its order, even while making a reference to the specific objection raised on behalf of the defendant-UCC that "an order of interim relief could only be passed on some material before the Court in the nature of quantity and quality otherwise the grant of interim relief and order to the defendant of that nature would not only amount to a decree before trial but amount to even a penalty which is not contemplated by law" the trial Court avoided any discussion on the merits of the case of the plaintiff-Union of India against the defendant-UCC and failed to record its finding on the point whether there existed such a prima facie case in favour of the plaintiff-Union of India that if the suit proceeded to trial the plaintiff-Union of India would obtain judgment for substantial damages against the defen-dant-UCC. Instead, it chose to take recourse to plain rhetorics and allowed its decision making to be over-powered by an upsurge of intense empathic response to the unfortunate disaster. The result was that the crucial objection raised on behalf of the defendant UCC was side-tracked by it and what it had to say about the entire matter was simply this : "It cannot be denied that an unprecedented tragedy took place on account of deadly leak from the UClL''s hazardous activity of storing such deadly material, the leakage of which could not be ruled out. Can it be disputed that more than 2700 persons have lost their lives ? Can it be disputed that many more fold have become perma-nently disabled and others are still more who have suffered lesser injuries ? Can the gas victims survive till the time all the tangible data with maticulous exactitude is collected and proved and adjudicated in fine forensic style for working out final amount of compensation with precision of quality and quantity ? Will it not be prudent to order payment of a relative sum bearing in mind all the progress in the case so far, the facts and figures (though not undisputed) which have come on record and the material furnished during settlement efforts made by Judge Keenan ? After all, interim relief is never and can never be exact like final adjudication in its very nature. We have to bear in mind all the aforesaid facts and circumstances and name a sum which should not be unjust to either side as an interim measure."

There was a similar recourse taken to meaningless rhetorics, and a similar surrender made to empty eloquence without even a whisper of dis-cussion as regards the merits of the case, in paras 27 and 28 of the trial Court''s order. In the said paras, the trial Court was faced with the question as to what was to be done in a situation in which no earlier case was to be found in which an interim relief of the nature had been granted in a suit for damages based on tort. The rhetorics came handy to it in the form of following dictum of Lord Denning in Packer v. Packer: "What is the argument on the other side ? Only this, that no case has been found in which it has been done before. This argument does not appeal to me in the least. If we never do anything which has not been done before we shall never get any-where. The law will stand still, whilst the rest of the world goes on and that will be bad for both". Thereafter, as if the said dictum was an Alladin''s lamp, out came from it, without anything more being said by the Court in the matter, the interim relief of thirty five hundred million rupees directed to be deposited by the defendant-UCC for payment of the so called ''substantial interim compensation and welfare measures'' for the gas victims. The totality of magical words uttered by the trial Court in the above regad was as follows: So, law will not stand still. It will act in aid of justice to distress gas victims to move ahead towards amelioration Law activates the Court and the Court orders that the defendant-UCC will deposit in this Court a sum of thirty five hundred million rupees for payment of substantial interim compensation and welfare measures for the gas victims "

In the facts and circumstances of the case, the question relating to existence of ''need'' for grant of interim relief to the victinrs of the horrendous disaster presented little difficulty. The said matter was considered by the triel Court in paras 24 and 25 of its order. It was apparent that the relief measures taken by the Stale Government and the Central Government for the benefit of the victims of the disaster were utterly inadequate to meet the situation and the money paid to the needy was a pittance. Accordingly, it was rightly observed and held by the trial Court as follows : "The ghastly tragedy took toll of more than 2700 lives and mani fold more were injured, some of them permanently disabled and as such unable to work. Thus in some cases the bread-winner was lost and in others limbs rendered helpless to win the bread. These and number of other cases certainly need immediate justice in their claims under the representative suit and certainly need payment of money as interim relief which can bring them an assured sum of money to keep their heart and soul together and to provide for health-care. The need for immediate relief to the gas victims is so obvious that nothing more need be said.

But, then, the casual and fanciful approach to the entire matter relating to grant of interim relief once again came to the fore in paras 30 and 31 of the trial Court''s order. In the said paras, the trial Court was considering the question as to in what manner the amount of three thousand five hundred million rupees directed to be deposited by way of interim relief was to be disbursed amongst the gas victims. Needless to say, whatever amount was ordered to be paid to an individual gas victim by way of interim relief had necessarily to be within the limit of the amount for which a decree for damages was likely to be passed in his favour. It, therefore, followed that it was for the Court and not for any outside authority to determine as to how much amount ought to be paid to each individual gas victim by way of interim relief. It also followed that no part of the total amount of the said relief i.e. three thousand five hundred million rupees could be treated to be spent on any such vague and general objects as ''health-care'' ''generation of employment potential for gas victims''.

Yet, the trial Court, vary strangely, ignored the abovesaid vital aspe-cts of the matter altogether. The directions given by it for the disbursal of the amount of interim relief in paras 30 and 31 of its order were in the following terms : ''Let me tell the Gas Victims that under ''The Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985, and the Scheme framed under it, a Judge of the M.P. High Court, Hon''ble Justice P.D. Mulye has been appointed Commissioner for payment of compensation to and welfare of Gas victims. The aforesaid amount of Three Thousand Five hundred million rupees as Substantial Interim Compensation'' shall be placed at his Lordship''s disposal for welfare and payment of Substantial Interim Compensation to the Gas Victims under the Act. In view of the act and the scheme framed under it, it is not for this Court to decide the mode or application of the aforesaid amount. However, the Court is the primary place where the parties came for redress and as such, the Court craves the indulgence of expressing its hope that the amount may be so utilised and harness as to achieve : (i) Disbursal of substantial interim compensation; (ii) Health-care, and (iii) Generation of employment potential for Gas Victims."

Being aggrieved by the order dated 17-12-1987 passed by the trial Court, directing the defendant-UCC to deposit a sum of three thousand five hundred million rupees for payment of interim relief to the gas victims, the defendant-UCC filed a revision (C.R. No. 26 of 1986) u/s 115 of the CPC in this Court. The objections which the defendant UCC had raised before the trial Court to the Court''s proposal for grant of interim relief were reiterated by it before this Court as the grounds of revision. After hearing both the parties at great length, the revision was disposed of by this Court vide its order dated 4-4-1988. It is useful to state briefly the findings reached by this Court on various points that arose for determination in the said revision.

In paras 10.01.01 to 10.01.13 of its revisional order, this Court negatived the ground raised by the defendant-UCC that in the absence of relevant particulars regarding the claimants and their claims the suit for damages brought by the plaintiff Union of India was not properly constituted and as such there was no warrant for the Court directing payment of any interim relief to the gas victims. In the said connection, it was found by this Court that the procedure applicable to ordinary suit for damages based on tort stood modified to a considerable extent by the special provisions of the Bhopal Act and the scheme framed thereunder. After a detailed examination of the relevant provisions of the Act and the scheme, especially those contained in Section 3 of the Act and sub-para (8) of Paragraph 5 of the scheme, it was found by this Court that the total number of claimants running into lakhs, the job of categorisation and registration of claims of various claimants and that of transmitting the information regarding such categorisation and registration to the Central Government, entrusted to the Commissioner, were bound to be time consuming. On the basis of the abovesaid finding, it was further found by this Court that it was contemplated under the Act and the scheme that the relevant particulars regarding the claimants and their claims would be furnished by the plaintiff-Union of India during the pendency of the suit as and when the same were received from the Commissioner and that in the meanwhile the suit as filed would not remain stand still but would be proceeded with by the Court for deci-ding other issues like liability etc. which might also arise for determination in the case.

In paras 11.01.01 to 11.01.24 of the revisional order, differing from the view expressed by the trial Court, this Court accepted the ground raised by the defendant UCC that in a case in which the very right of the plaintiff to. claim any amount by way of damages from it was in contest before the trial Court, the said Court had no jurisdiction to grant any interim payment to the plaintiff in exercise of its inherent powers u/s 151 (whether coupled with Section 94 or not) of the Code of Civil Procedure. It was held by this Court that howsoever wide the ambit of inherent powers of the Court u/s 151 may be, the said powers relate to the procedure to be followed by the Courts in deciding the cause before it and they are not powers over the substantive rights which a litigant possesses. Spacific powers are required to be conferred on the Courts for passing orders affecting substantive rights possessed by a litigant.

In para 12.01.01 of the revisional order it was noted by this Court that in the facts and circumstances of the case it still remained to be considered whether under the substantive law i.e. the general law of tort by which the Bhopal suit was admittedly governed it was permissible for the Court to pass an order of interim payment of the nature of the impugned order or of any other nature in favour of the tort victims represented by the plaintiff-Union of India. But, then, the Court was of the view that the answer to the abovesaid question was dependent on an answer to the wider question, namely, as to by what Rule of substantive law i.e. the general law of torts the liability of the alleged tortfeasor i.e. the defendant-UCC was governed in the suit. It was noted by this Court that as both the questions were of vital importance for a fair disposal of the revision the learned counsel for both the parties were granted full opportunity to address this Court at length in respect of them.

In paras 12.02.01 to 12.02.19 of the order, after tracing the history of the Indian common law, and its systematic and progressive development, with particular reference to the general law of torts, and to the principle of ''strict liability'' under the rurle enunciated in Rylands v. Fletcher 1861-1873 1 All. ER 146 (H.L.)., it was held by this Court that it was by the rule recognised by the highest Court of this country in M.C. Mehta and another Vs. Union of India and others, . that the liability of the alleged tortfeasor i.e. the defendant-UCC was governed in the Bhopal suit. The said rule was the rule of absolute liability without any exception and was in the following terms : "Where an enterprise is engaged in an hazardous or inherently dangerous activity and harm results to anyone on account of an accident in the operation of such hazardous or inherently dangerous activity resulting, for example, in escape of toxic gas, the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis-a-vis the tortious principles of strict liability under the rule in Rylands v. Fletcher1. The measure of compensation in such cases must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect. The larger and more prosperous the enter-prise the greater must be the amount of compensation payable by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise."

On the basis of the abovesaid fule, it was held to be unquestionable by this Court in the case of the Bhopal suit that whichever was the enterprise engaged in the hazardous and inherently dangerous activity at the plant in question at Bhopal resulting in the MIC gas leak disaster, whether it be the Indian company i.e. Union Carbide India Limited or it be the defendani-UCC, was liable to pay damages/compensation to the gas victims in accor-dance with the rule of absolute liability without exception as stated in M.C. Mehta''s case.

After examining the question as to by what rule of the substantive law i.e. the general law of torts the suit in question was governed, this Court, in paras 13.01.1 to 13.01.07, proceeded to examine the other vital question arising for consideration in the revision, namely, whether it was permissible for Court in a pending suit for damages to grant any relief of interim payment to the plaintiff under the provisions of the said law. In the said connection, as a matter of guidence, placing reliance on a landmark decision of a Division Bench presided over by G.P. Singh, J. (as he them was) in Vidyadevi v. M.P. State Road Transport Corporation AIR 1975 MP 87. it was recognised by this Court as settled law that if in a given case the new rules of the English statute law had replaced or modified the common law of that country and were more in consonance with justice, equity and good conscience in Indian circumstances it was open to the Court in India to reject the out-moded rules of common law and apply the new rules. It was noted by this Court that it was as far back in 1969 that it was realised in England that it was necessary to mitigate the hardship or prejudice in the case of persons claiming damages, which might be occasioned during the interval between commencement of the action and its ultimate trial and accordingly Section 20 in the Administration of Justice Act, 1969 of that country incorporated the recommendation of the Winn Committee on Personal Injuries Litigation to enable orders for interim payment of damages to be made in certain circumstances. It was held by this Court that there was no valid ground why the relevant set of statutory rules of the English law brought into force in that country much before the Bhopal gas leak disaster could not be adapted with suitable modifications as a part of the Indian common law and applied to the Bhopal suit.

Thus, it was held by this Court that under the substantive law i.e. the general law of torts it was permissible for the Court to grant the relief of interim payment of damages to the plaintiff under certain circumstances. It was held that it was necessary that before granting any such relief to the plaintiff the Court was satisfied (a) that the defendant against whom the order was sought had admitted liability for the plaintiff''s damages, or (b) that the plaintiff had obtained judgment against the defendant for damages to be assessed, or (c) that, if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the defendant or, where there are two or more defendants against any of them. It was further held that there was also a second requirement which was required to be fulfilled. No order of interim payment of damages was to be made if it appeared to the Court that the defendant was not a person falling within one of the following categories, namely, (a) person who was insured in respect of the plain-tiff''s claim, (b) a public authority, or (c) a person whose means and resources were such as to enable him to make interim payment.

In paras 14.01.01 and 14.01.02 of the revisional order, it was found by this Court as to how the second of the abovesaid two requirements for grant of interim payment of damages was fulfilled in the case of the Bhopal suit. In the said connection, reliance was placed by this Court on an affidavit on behalf of the defendant UCC showing that its means and resources were quite sufficient to enable it to make such payment. Reliance was also placed on statements indicating that the defendani-UCC was insured in res-pect of liabilities including one which might arise out of the Bhopal suit to the extent of two hundred sixty two crore rupees.

Accordingly, it was found by this Court in the abovesaid paras of its order that the only thing which still remained to be considered for grant of interim payment of damages in the case of the Bhopal suit was whether the first of the abovesaid two requirements was also fulfilled in the case of the said suit. The said requirement related to the question whether the plaintiff-Union of India would obtain judment for substantial damages aga-inst the defendant-UCC. It was pointed out by this Court that the said question was required to be answered in two parts one related to the legal question whether it was permissible to life the corporate veil of the Indian company in the suit of the particular type so as to hold the defendant-UCC liable for the tort and two to find out whether in case it was legally permissible to lift the veil there existed prima facie strong case as per the material on record showing that it had been in fact the defendant-UCC which exer cised real control over the enterprise in question at Bhopal so as to hold it liable for the tort.

The first part of the abovesaid question was considered by this Court in paras 14.02.01 to 14.02.05 of its revisional order. After a discussion of the relevant law on the point, it was held by this Court that there is no reason why when the corporate veil could be lifted in the cases of tax eva-sions, enforcement of welfare measures relating to industrial workman, etc., it could not be lified on purely equitable considerations in the case of a tort which had resulted in a mass disaster and in which on the face of it the assets of the alleged subsidiary company were utterly insufficient to meet the just claims of multitude of disaster-victims. It was observed by this Court that the concept in question regarding ''lifting the veil'' had been an expanding concept and the Court would fail in its duty if it did not apply the said concept in a case of the nature of the Bhopal suit.

The second part of the question was considered by this Court in paras 14.03.01 to 14.03.05 of its order. It was held by this Court that once the veil of the Indian company was lifted it had to be held as having been more than prima facie established from the pleadings of the parties as also the voluminous documents produced by them that it was the defendant-UCC which had real control over the enterprise which had been engaged in carrying on the particular horrendous and inherently dangerous industry at the Bhopal plant and as such it was absolutely liable (without any exceptions) to pay damages/compensation to the multitude of gas victims in accordance with the principles already stated earlier.

Amongst other grounds, raised by the defendant-UCC in the revision, there was one to the effect that the Court had no power to order pay-ment of interim relief to the gas victims on the basis of its suo motu proposal for the same. The said ground was considered by this Court in para 15.01.01 of its revisional order. It was held by this Court that in a case in which the plaintiff-Union of India did not sue in its individual capacity but represented the interests of multitude of gas victims and the need for grant of interim relief was writ large on the face of the horrendous evente it was immaterial whether the proposal came from the Court or from the plaintiff-Union of India. According to this Court, what was material in such a case was that after such a proposal was made by the Court the same was pursued by the plaintiff-Union of India or not. It was pointed out by this Court that the plaintiff-Union of India did pursue the said proposal vigorously at all subsequent stages including before this Court.

In para 15.01.02 of its order, this Court disposed of one other ancillary point arising for consideration in the case. It was held by this Court that the District Court was in error in leaving the question relating to utilisation of the amount of interim payment to the Commissioner functio-ning under the Bhopal Act and the scheme framed thereunder. It was exp-lained by this Court that there was mis-reading of the relevant provisions of the scheme by the trial Court in the said regard It was further held by this Court that the trial Court was also in error in assuming that the words ''interim relief'' used in paragraph 10 (3)(b) of the scheme had anything to do with the adjudication of the Bhopal suit. According to this Court, it was apparent that the ''interim relief referred to in the said para was to come from the amounts made available to the said Commissioner by way of donations and for relief puposes and not from any adjudicatory order of interim relief passed by the Court

In paras 16.01.01 to 16.01.06 of its order, this Court took up for consideration the question relating to determination of fair amount of interim relief payable by the defendant-UCC to the gas victims represented by the plaintiff-Union of India by way of interim payment of damages. It was held by this Court that it was just and proper that the said ''relief was granted only in respect of claims arising out of deaths and personal injuries. It was further held by this Court that leaving a small margin for the possibility of some of such claims being spurious, there was no reason to doubt that the figures furnished by the plaintiff-Union of India in its amended plaint could he safely accepted as correct for the purpose of determining the fair amount of interim relief payable by the defendant-UCC.

It was pointed out by this Court that, as discussed earlier, the measure of damages payable by the alleged tort-feasor i.e. the defendant: UCC had to be correlated to the magnitude and the capacity of the enterprise. It was held that bearing in mind the abovesaid factors it would not be unreasonable to assess that if the suit proceeded to trial the plaintiff-Union of India would obtain judgment in respect of claims relating to deaths and personal injuries at least in the following sums-(a) Rs. 2 lacs in each case of death; (b) Rs 2 lacs in each case of total permanent disablement; (c) Rs. 1 lac in each case of permanent partial disablement; and (d) Rs. 50,000/-in each case of temporary partial disablement.

It was recalled by this Court that as per the rules applicable in respect of interim payment of damages such amount as the Court thought just, not exceeding reasonable protection of the damages that were likely to be decreed, might be ordered to be paid by the defendant-UCC by way of such interim payment. This Court was of the view that the half of the amounts as mentioned obove in respect of each of the four categories would constitute reasonable amounts payable as interim payment of damages by the defendant UCC. Thus, it was held by this Court that the amounts of interim payment of damages by the defendant-UCC in respect of each of the four categories mentioned above were as follows : (a) Rs. 1 lac in each case of death; (b) Rs. 1 lac in each case of total permanent disablement; (c) 50,000/ in each case of permanent partial disablement; and (d) Rs. 25,000/- in each case of temporary partial disablement. Bearing in mind the number of claims relating to death and serious personal injuries as mentioned earlier, the total amount of interim payment of damages payable by the defendant-UCC was fixed by this Court at two hundred fifty crore rupees. It was made clear by this Court that the liability of the defendant-UCC to pay the abovementioned amount by way of interim payment of damages would be final and con-clusive as such damages and in case of failure on its part to deposit the same it would be open to the plaintiff-Union of India to execute the order of this Court as if it was a decree in its favour by the trial Court. In paras 17.01 01 and 17.01.02 of its order this Court gave detailed directions, with regard to deposit of amount of interim payment of damages by the defendant UCC and its disbursal to the four categories of the gas victims as mentioned above.

Thus, the abovesaid, in brief, were the findings of this Court in its order dated 4-4-1988 passed in C.R. No. 26 of 1988 filed by the defendant UCC. In view of the said findings, the revision was partly allowed by this Court. It was affirmed that in a suit for damages based on tort the Court had jurisdiction to order payment of interim relief in certain cases. However, on the said point, differing from the trial Court, it was held that such jurisdiction vested in the Court under the substantive law i.e. the general law of torts and not under the inherent powers of the Court u/s 151 C.P.C. (whether coupled with Section 94 C.P.C or otherwise). Again, differing from the trial Court, it was held that such interim relief could be granted only by way of interim payment of damages and that if the defendant denied his liability to pay any damages as claimed in the suit, the relief of inerim payment could be granted to the plaintiff only if the Court was satisfied that in case the suit proceeded to trial the plaintiff would obtain substantive damages against the defendant-it was repelled by this Court that any such relief could be granted to the plaintiff without reference to the merits of the case of the plaintiff against the defendant. As such, on the basis of more than prima facie case having been found to exist in favour of the plaintiff-Union of India to claim substantive damages from the defendant UCC, the quantum of interim payment of damages payable in cases of deaths and personal injuries was worked out to two thousand five hundred million rupees. The amont of interim relief awarded by the trial Court was reduced accordingly. The defendant-UCC was granted two months'' time from the date of the revisional order to deposit the said amount.

It was after the order of interim relief dated 17-12-1987. passed by the trial Court was modified by the revisional order dated 4-4-1988 passed by this Court to the extent mentioned above that the defendant UCC made an application to the trial Court i.e. the District Judge, Bhopal on 6-5-1988 praying him to dissociate himself from the suit. As mentioned above, it was clear that in fact the said application was one made to the District Court u/s 24 C.P.C. to transfer the suit pending before it to any Court subordinate to it and competent to dispose of the same. The application was turned down by the District Judge vide his order dated 16-6-1988. As mentioned above, it is being aggrieved by it that the defendant-UCC has filed the present revision u/S. 115 C.P.C. in this Court.''

Now, before proceeding to consider the main point arising for consideration in the present revision, it is necessary to dispose of a preliminary objection raised on behalf of the non-applicant i.e. the plaintiff Union of India relating to the maintainability of the revision. It was not disputed by the learned counsel for the plaintiff Union of India that under Clause (a) of sub section (1) of Section 24 of the CPC the District Court had power to order transfer of any suit pending before it for trial or disposal to any Court subordinate to it and competent to try Or dispose of the same. But, then, it was pointed out by him that under the provisions of the M.P. Civil Courts Act, 1958 as amended by the M.P. Act No. 17 of 1982 a common cadre of District Judges including the ''District Judge'', ''Additional Judge to the Court of District Judge'' and ''Additional District Judge'' was created with the result that the Courts of ''Additional Judge to the Court of District Judge'' and ''Additional District Judge'' could no longer be regarded as ''subordinate'' to the District Court for the purposes of Clause (a) of sub-section (1) of Section 24 of the Code w.e.f the date of coming into force of the said Amendment Act. It was submitted by him that in view of the said legal position there was left no Court subordinate to the District Judge, Bhopal to which he could transfer the suit pending in his Court in exercise of his power under Clause (a) of sub section (1) of Section 24.

In the opinion of this Court, the abovesaid preliminary objection raised by the learned counsel for the non-applicant i.e. the plaintiff Union of India is misconceived and cannot be accepted. In the first instance, the said objection ignored the provisions of sub-section (3) of Section 24 of the Code which were introduced in the said Section by the CPC (Amendment) Act, 1976. It was made clear in the said provisions that for the purpose of Section 24 the Courts of Additional and Assistant Judges would be deemed to be subordinate to the District Judge. It followed from the said previsions that even though pursuant to the amendment made in the M.P. Civil Courts Act, 1958 by M.P. Act No. 17 of 1982 an ''Additional Judge to the Court of District Judge'' and an ''Additional District Judge'' belonged to the same cadre as the ''District Judge'', the Courts presided over by them were still to be regarded as ''subordinate'' to the Court presided over by the District Judge for the purposes of Clause (a) of sub-section (1) of Section 24 of the Code. Secondly, the said objection also ignored the provisions of Section 15 of the M.P. Civil Courts Act, 1958 as amended by M.P. Act No. 17 of 1982. The said Section empowered the District Judge to direct by an order in writing that any civil business cognizable by his Court or by other Civil Courts established u/s 5 in his civil district would be distributed amongst himself and Additional Judges, if any, of his Court, as also amongst other Courts under his control and amongst Additional Judges of such other Courts ''inter se'' in such manner as the deemed fit. This indicated that even after the amendment of the M.P. Civil Courts Act, 1958 by M.P. Act No. 17 of 1982 there was no warrant for thinking that the District Judge could not transfer a suit pending in his Court for trial or disposal to any of the Courts of ''Additional judge to the Court of District Judge'' or ''Additional District Judge'' in his district in exercise of his power under Clause (a) of sub-section (1) of Section 24 of the Code.

There was also another objection to a similar nature urged on behalf of the non applicant i.e. the plaintiff-Union of India relating to the maintainability of the revision. It was pointed out that as per prayer made in its application for transfer of suit the defendant-UCC expected the District Judge to order himself to ''recuse'' from hearing the case. It was submitted that such a procedure was unheard of in this country where the normal course was to approach the High Court in case it was desired to have a suit pending in the Court of District Judge transferred to another Court.

Frankly speaking, this Court is unable to understand the abovesaid objection raised on behalf of the non-applicant. It was crystal clear from the power conferred on the District Court by Clause (a) of sub section (l) of Sec. 24 of the Code that an application for transfer of any suit pending before the district Court i.e. the District Judge could be made by any of the parties to that Court itself. In the circumstances, it is not understandable as to how any objection could be taken by the plaintiff-Union of India to the application for transfer made by the defendant UCC to the District Judge on the ground that such a procedure was unheard of.

This is not to say that there could not arise the question of propriety of making such an application to the District Judge in certain cases. But, then, the said question had essentially to do with the facts and circumstances of particular cases-it had nothing to do with the competence of the District Judge to try and dispose of such an application. However, in the context of objection raised on behalf of the plaintiff Union of India, it is pertinent to examine whether in the facts and circumstances of the case there was any impropriety committed by the defendant-UCC in making the application for transfer to the District Judge himself and not to this Court.

Now. as mentioned earlier, the main ground urged by the defendant-UCC in its application for transfer of the suit made to the District Judge was related to the manner in which the District Judge had passed the order of interim relief against it on 17-12-1987 and directed it to deposit a sum of three thousand five hundred million rupees for payment of ''substantial interim compensation and welfare measures'' for the tort-victims represented by the plaintiff Union of India. According to the defendant-UCC, the said order disclosed that the District Judge had pre judged the basic issue and formed a definite opinion against it even before the trial of the suit began and that the said fact created a reasonable apprehension in its mind that it might not have a fair and impartial trial in his Court. It was on the basis of the said ground that a prayer was made to the District Judge to recuse himself from hearing the case.

It is significant to note that in support of its case that it was a fit case for the District Judge to recuse himself from hearing the case, the defendant-UCC analysed the order of interim relief passed by the District Judge in great detail and high lighted the particular aspects of the said order relied on by it It was another thing that while doing so, it viewed the said aspects from its own point of view and drew its own inferences from them. But, then, there was not an indecent word used or any wild allegation made against the Judge. The entire approach in the application was simply to tell the Judge to view the order passed by him in the light of the aspects high-lighted in the application and thereafter to decide for himself whether the apprehension in the mind of the defendant-UCC that it might not have a fair and impartial trial was a reasonable one?

There was also nothing undignified about the use of the word ''recuse'' used in the application. As per its dictionary meaning, the said word meant ''to object to (a Judge) as prejudiced'' or ''to reject or challenge (a Judge or Juror) as disqualified to act, esp. because of interest or bias''. The said word was related to ''a species of exception or plea to the jurisdiction, to the affect that the partial judge is disqualified from hearing the case, by reason of interest or prejudice''. In fact, in his oft quoted passage from Public Utilities Commission of the District of Columbia v. Pollak (1952) 343 U. S. 451, 466., a decision of the U. S. Supreme Court, Frankfurter, J. used the said word in the sense of a Judge ''dissociating himself or ''withdrawing himself frorn a proceeding and nothing more than that.

Thus, in the case of the application in question, made by the defendant-UCC, in which the entire argument relating to ''bias'' as the ground for seeking transfer of the suit pending before the District Judge was built around the material on record of the suit, and not on any personal allegations made against the Judge, it was difficult to understand as to how it could be said that there was any impropriety committed by the defendant-UCC in making the said application to the District Judge himself and not to this Court. In fact, there was nothing wrong in the defendant-UCC reposing faith in the District Judge to decide the question of his own bias'' in a dispassionate manner on the basis of objective facts pointed out to him from the record of the suit. In the opinion of this Court, the approach of the defendant-UCC in the said regard was in accordance with the highest traditions of judicial discipline and there was absolutely nothing ''demeaning'' or ''deg-rading'' about it.

Now, it is unfortunate that the District Judge refused to decide the main point raised by the defendant-UCC in its application for transfer under a misconceived notion that since the order of interim relief dated 17-12 1987 passed by him merged into the revisional order dated 4-4-1988 passed by this Court he could not permit any discussion on any aspect of the said order. The learned Judge failed see that in case the order of interim relief dated 17-12-1987 had in fact given rise to any likelihood of bias as conten-ded by the defendant-UCC the same did not stand obliterated in any manner by the fact of the said order having merged into the revisional order dated 4-4-1988 passed by this Court. The learned Judge failed to appreciate that the entire suit was still at large for its trial on merits before him and as such the defendant-UCC could not be prevented from seeking its transfer from his Court by raising the plea of likelihood of bias on the basis of the order in question dated 17-12-1987 passed by him. Needless to say, as the District Judge, while passing the impugned order dated 16-6-1988, failed to apply his mind to the main point raised by the defendant-UCC in its application for transfer made to him, it is open to this Court in this revision arising from the said order to consider the said point in all its aspects.

While dealing with the main ground, arising for consideration in the revision, it is necessary to bear in mind the appropriate test for determining whether in a given case a Judge is disqualified from determining any case in which he may be, or may fairly be suspected to be, biased. The general rule in the said regard is described as the rule against bias and cons-titutes the bed rock on which the entire edifice of judicial impartiality is built. The said rule is to the effect that ''justice should not only be done, but should manifestly and undoubtedly be seen to be done."

On the abovesaid point, as far as the English decisions are concerned, it was pointed out by Lord Esher M.R. as far back as in Allison v. General Council of Medical Education and Registration (1894) I Q B. 75.0, 758 that the test of actual bias, as distinct from the appearance of bias is inappropriate: "The question is not whether in fact he was or was not biased. The Court cannot inquire into that In the administration of justice, whether by a recognised legal Court or by persons who, although not a legal public Court, are acting in a similar capa-city, public policy requires that, in order that there should be no doubt about the purity of the administration, any person who is to take part in it should not be in such a position that he might be suspected of being biased." More recently, Lord Denning M.R. has preferred the question of appearance of bias to that of actual bias. In Metropolitan Properties Co. (F.G.C.) Ltd v. Lannon (1969) 1 Q.B. 577, 599 he said: "In considering whether there was a real likelihood of bias, the Court does not look at the mind of the justice himself or at the mind of the chairman of the tribunal, or whoever it may be, who sits in a judicial capacity. It dose not look to see if there was a real likelihood that he would, or did, in fact favour one side at the expense of the other. The Court looks at the impression which would be given to other people. Even if he was as impartial as could be, nevertheless if right minded persons would think that, in the circumstances, there was a real likelihood of bias on his part, then he should not sit...There must be circumstances from which a reasonable man would think it likely or probable that the justice, or chairman, as the case may be, would, or did, favour one side unfairly at the expense of the other. The Court will not inquire whether he did, in fact, favour one side unfairly. Suffice it that reasonable people might think he did. The reason is plain enough. Justice must be rooted in confidence; and confidence is destroyed when right minded people go away thinking: ''The judge was biased''."

Thus, according to the English decisions, the correct test to be applied in such cases is whether there is appearance of bias, rather than, whether there is actual bias. In the past, there had also been a conflict of view as to the way in which that test should be applied. Must there appear to be a real likelihood of bias ? [For a discussion on the cases, see de Smith''s Judicial Review of Administrative Action, 4th ed. (1980), pp. 430-432]. In Regina v. Liverpool City Justices, Ex parte Topping (1982) 1 All. E.R. 490, Ackner L J. accepted the view of Cross L. J. expressed in Hannam v. Bradford Corporation (1870) 1 W.L R. 937, 949 that there is really little, if any, difference between the two tests: "If a reasonable parson who has no knowledge of the matter beyond knowledge of the relationship which subsists between some members of the tribunal and one of the parties would think that there might well be bias, then there is in his opinion a real likelihood of bias. Of course, some-one else with inside knowledge of the characters of the members in question might say: Although things don''t look very well, in fact there is no real likelihood of bias.'' That, however, would be beside the point, because the question is cot whether the tribunal will in fact be biased, but whether a reasonable man with no inside knowledge might well think that it might be biased " According to Ackner L.J., the test to be applied can conveniently be expressed in the following words : "Would a reasonable and fair-minded person sitting in Court and knowing all the relevant facts have a reasonable suspicion that a fair trial for the applicant was not possible ?"

As far as the Courts in India are concerned, it is sufficient to say that the law on the point is not different from that expressed by Ackner L.J. in Regina v. Liverpool City Justices, Ex parte Topping. More than thity years back, the test to be applied in such cases was expressed by Raj Kishore Prasad, J. in Lalita Rajya Lakshmi and Another Vs. State of Bihar and Another, , in the following words : "Therefore, if there are circumstances in a case, which raise a reasonable apprehension in the mind of the person applying for transfer that he would not receive fair dealings at his trial, or, in other words, that he may not have a fair and impartial trial, and may not get justice in the Court, where the suit is pending, the case should be transferred. In such a case, in order to decide whether the facts and circumstances are sufficient to raise such a reasonable apprehension in the mind of the party applying for transfer, the Court should put himself in such a party''s arm chair; and then alone the Court is at liberty to place himself in the position of, and, the same situation in which, the party himself stood with the knowledge of all the facts with which the party was acquainted, and, then only the Court can see and judge for himself how these facts would have affected the party''s mind, and, if they are reasonable and sufficient to raise the reasonable apprehension complained of in the mind of even a reasonable person" More recently, the Supreme Court had an occasion to review the entire English law on the point in Ranjit Thakur Vs. Union of India (UOI) and Others, . Speaking for the Bench, Venkatachaliah,J. has this to say about the test to be applied in such cases: "As to the tests of the likelihood of bias what is relevant is the reasonableness of the apprehension in that regard in the mind of the party. The proper approach for the Judge is not to look at his own mind and ask himself, however, honestly, ''am I biased ?" but to look at the mind of the party before him. "

However, in respect of the particular kind of bias with which, we are concerned in the present case, the test is not yet crystalised and is still in the state of fluidity. The question is as to in what case a pre-judgment or pre-determination of a vital issue arising for consideration in a case would operate as a disqualification for the Judge. But, then, it is not difficult to work out certain broad guidelines by way of an answer to the said question. It is apparent that it could be plausibly argued that if a Court has already made up its mind regarding the basic issue involved and to be raised at the hearing, the very purpose of hearing may be frustrated. What is necessary in such cases is that the pre-judgment or pre-determination of the issue in question should be such as to raise a reasonable apprehension in the mind of the party concerned that the mind of the Court was foreclosed as to the merits of the case before it. Again, it may be possible to make a distinction between pre judging of facts specifically relating to a party and pre conceptions or pre-dispositions about general questions of law. policy or discretion affecting a large number of persons. The former shall qualify but in the latter case a greater leeway may be permissible.

Accordingly, what is required to be examined in the present case is whether in the light of the general and the particular tests for deciding ''like-lihood''of bias as a disqualification for a Judge, the manner in which the order of interim relief dated 17-12-1987 was passed by the trial Court i.e the District Judge, Bhopal was such as could create a reasonable apprehension in the mind of the defendant-UCC that the mind of the Court was foreclosed as to the merits of the case before it and that it would not have a fair and impartial trial before it.

In the above connection, it has to be borne in mind that the suit in question brought by the plaintiff-Union of India against the defendant-UCC was one for damages based on tort. In the background of such a suit, it is clear that the particular view of law taken by the learned Judge that he had power to grant payment of interim relief to the gas victims in exercise of its inherent powers u/S. 151 C.P.C. coupled with Sec. 94 C.P.C. could by no stretch of imagination be regarded as a disqualification for the Judge within the meaning of the tests mentioned above. It is no doubt true that by its revisional order dated 4-4-1988 it was held by this Court that although under the substantive law the Court had power to order a defendant to make payment of interim damages to a plaintiff in a suit for damages based on tort in certain circumstances it had no power to grant any interim relief to the plaintiff in such a suit under its inherent powers u/S. 151 C.P.C.(whether coupled with Sec. 94 C.P.C. or otherwise). But, then, there could always be an honest difference of opinion on the point and the charge of bias was inconceivable on any such ground.

The real crux of the matter is the mannar in which the trial Court proceeded to grant the interim relief of three thousand five hundred million rupees in favour of the gas victims without thinking it necessary to record any finding on the question as to whether there existed any prima facie case in favour of the plaintiff Union of India that if the suit proceeded to trial it would obtain a decree for substantial damages against the defendant-UCC. Frankly speaking, the said aspect of the matter is the most disturbing part of the order of interim relief dated 17-12-1987 passed by the trial Court. The approach adopted by the trial Court in the said regard has already been commented upon in paras 10 to 13 and 15 and 16: of this order and need not be discussed again. Is is sufficient to say that whether it be under the inherent powers of the Court under Sec. 151 C.P.C. or it be under the substantive law i.e. the general law of torts, no Court could fasten such a liability as payment of interim relief of three thousand five hundred million rupees on a defendant without recording a clear finding with regard to a prima facie case having been made out in favour of the plaintiff for the purpose. In the opinion of this Court, the said aspect of the order of interim relief dated 17-12-1987 passed by the trial Court was certainly such as could, create a reasonable apprehension in the mind of the defendant-UCC that, the mind of the trial Court was foreclosed as to the merits of the case before it.

In the above connection, it may be made very clear that while making the abovesaid comments in respect of the order in question passed by the trial Court it is not intended by this Court to cast any reflection on the learned Judge. As has been mentioned above, the approach to be adopted in all such cases is not to look at the judge''s mind and ask whether he was biased but to look at the mind of the party before him.

As far as this Court is concerned, it has reason to believe that while passing the order of interim relief dated 17-12-1987 the trial Court acted with the best of intentions to help the gas victims. But, then, the requirements of ''judicial impartiality'' are somewhat different. In the said connection, this Court can do nothing better than to quote the words of Professor H.K. Lucke from his famous article ''Judicial Impartiality'' published in the Law Quarterly Review, 1982, pp. 29-93-"Undeniably the judge''s empathior spo-uses to the case are deeply suspect: they seek to predispose him in favour of one party or the other. If uncontrolled, they would be quite irreconciable with the necessary attitude of impartiality. If the judge''s empathic responses are to work impartially, they must, to adapt Cardozo''s famous words be ''informed by tradition, methodised by analogy, disciplined by system.'' So controlled, they are the essense of the judge''s sense of justice" and "of a judgment were simply the result of an undifferentiated and unexplained prefe-rence for one party''s appeal to judicial sympathy, the judge''s impartiality (even in the absence of cruder forms of bias) could not be established satisfactorily. To persuade his critics of his impartiality, the judge should seek to show that the factor truly motivating his action was a circumstance or consideration extrinsic to the appeals to his sympathy made by the parties."

For the reasons stated above, the main point arising for consideration in the present revision is decided in favour of the defendant-UCC, It is held that the application for transfer made by the defendant-UCC to the trial Court i.e. to Shri M.W Deo, District Judge, Bhopal for transferring the suit pending before the said Court to any Court subordinate to it and competent to try or dispose of the same deserved to be allowed. Consequently, the revision is allowed. Civil Suit No. 1113 of 1986 pending in the Court of Shri M. W. Deo, District Judge, Bhopal is transferred to the Court of senior most Additional Judge to the Court of District Judge, Bhopal for further trial and disposal. The successor Court shall take up the matter from the stage at which it was in the Court of Shri Deo and shall proceed expeditiously to dis-pose of the same finally.

In the circumstances of the case, there shall be no order as to the costs of this revision.

It is directed that a copy of this order be placed before Hon''ble the Chief Justice on the administrative side so that if it is thought proper some more experienced judge may be posted at Bhopal to try the suit. In such an eventuality, Civil Suit No. 1113 of 1986 shall stand transferred to the judicial officer so posted and he shall proceed to try and dispose of the same as per the direction already given.