In a major setback to survivors of the Bhopal gas tragedy, a US appellate court has rejected their plea against Union Carbide Corporation for compensation and removal of hazardous waste from its chemical plant.

The US Court of Appeals for the Second Circuit rejected the petition filed by one Hasina Bi and 14 other survivors for compensation and removing hazardous material from Union Carbide's unit in the central Indian state of Madhya Pradesh.

The chemical plant was shut down after deadly Methyl Isocynate gas leaked from it on December 3, 1984, killing 2,660 people and seriously affecting the health of another two lakh.

"(Hasina) Bi's claim for public nuisance fails because Bi has not alleged any special injury or damages beyond that of the general inconvenience to the public at large," the circuit judges said, while rejecting their petition.

"In any event, Bi resides illegally on government-owned ground. She, therefore, cannot sustain claims for trespass or private nuisance under New York law," the judges said.

In the petition, Bi challenged an order by Justice John F Keenan of New York's South District Court in October last year that rejected her suit for damages against Dow Chemicals, the present owner of Union Carbide after a six-year legal battle.

The survivors had demanded damages from the company and alleged that their water aquifiers were polluted due to the leak of hazardous chemicals from the UCC factory in Bhopal.

"The complaint does not allege that Bi is an owner or legal tenant on any property contaminated by leakage from the chemical plant site, nor did Bi contest the magistrate judge's finding that she is not a property owner despite an opportunity to do so before the judge and district court," the judgement, delivered on August 10, said.

The circuit court upheld the order of New York court and said the district court did not abuse its discretion while refusing to reinstate Bi's claim for remediation of the plant site and the groundwater beneath it.

"We have already affirmed dismissal of these claims because of impracticality of a court-supervised clean-up project on the land owned by a foreign sovereign," it said.

However, the appellate court mentioned a letter submitted by the Counsul General of India before it, which stated that Indian government and the state of Madhya Pradesh would welcome any relief for remediation of the UCC plant. But that letter does not obviate any of the sensitive and severe difficulties identified by the district court regarding the administration of remediation of land owned by a foreign sovereign in its own country, they observed.

"Yet, India has indicated that it would control such a process, thus the same problems (lack of control and potential conflict with Indian authorities) are inherent in any attempt to clean up the groundwater," the appellate court said.

The New York district court had last year observed that any clean-up of the groundwater would affect the public in Bhopal and it could not be undertaken without the permission and super vision of Indian government.

"The court will not grant relief where it happens to be impossible and impractical," the district court had said.

The case was filed by survivors after the Government of India and Union Carbide reached a settlement in February 1989. Under the settlement supervised by the then Supreme Court Chief Justice R S Pathak in February 1989, the Centre had agreed to withdraw all civil and criminal suits against Union Carbide officials. Moreover, the company had agreed to pay $470 million (about Rs 750 crore).