Do we all remember the purpose behind the enactment of the Environment Protection act of 1986? Is there any reason or incident that is connected to such enactment in India? Supreme Court of India played a huge role in the environmental protection in India, and thanks to MC Mehta for filing a much-needed PIL in the Oleum Gas Leak case, which enabled the judges of the Supreme Court to draft a new environmental jurisprudence in India, unlike in foreign jurisdiction. This article will give a brief overview of the Public Liability Insurance act of 1991 and its connection with landmark judgment in India, thereby concluding with a very recent case in India relating to public liability.
Object and reason behind the act:
Before looking into a few of the important provisions of the act of 1991, let us look into the preamble of the act to determine the purpose or objective behind the enactment of this law. The preamble of the Public liability Insurance act states that it is an act to provide public liability insurance to ensure immediate aid to those persons who were affected due to the accident caused by handling hazardous substances. This means that the industries that tend to cause harm by using harmful substances are made liable or have been transferred with the environmental liability for their actions. This objective resembles the idea that forms the basis of the polluter pay principle. On the other hand, a historic judgment delivered in the Oleum gas leak case, which will be briefed in the latter part of this article along with the Bhopal gas tragedy, also spoke about the importance of the absolute liability principle and not the strict liability principle. Such principle or the ratio of the judgment has resembled in the preamble of this act of 1991.
Defines important terms:
Let us look into a few important definitions provided under the act to further understand the application of provisions of the act.
Firstly, ‘Hazardous Substance’ has been defined under section 2(d), which states that any substance or any preparation which has been noted to be hazardous under the Environment protection act of 1986 and such substance has exceeded the quantity as specified by the union government from time to time.
Secondly, ‘insurance’ under section 2(e) has been provided as insurance against the liability incurred due to the death or personal injury or any kind of damage to property out of an accident as per section 2(1) of the act of 1991. The definition excludes a worker who incurs damage under the Employees compensation act of 1923.
Who can apply for a relief claim?
- As per section 6 of the act, an application for relief can be filed by the following persons.
- The actual person who suffered the injury out of an accident,
- The owner of the property who received the damages as per the act,
- Thirdly, by one or all of the legal representatives of the person deceased out of an accident,
- Lastly, any authorized agent of the property owner whose property has been damaged or agent of the deceased person as the case may be.
The act establishes Environmental Relief Fund:
Section 7A of the act of 1991 provides for establishing an environmental relief fund. It empowers the central government to establish such relief fund in the name of Environmental relief fund. Such funds shall be utilized only for the purpose of paying and implementing the schemes under provisions of the act. Such shall also be specified by the union government under section 7 and also the manner in which such relief fund shall be utilized.
Section 13 of the act allows the application to be made in the court for the purpose of restraining the action of the owner of the property if such act is in contravention to the interests of public good or under the act.
Penalties:
Section 14 to 18 provides penalties for various entities such as companies, government by itself etc., in case of any violations that occurred due to their actions.
Landmark and recent Judgments:
Having seen a few essential sections under the act of 1991, let us briefly look into three main judgments in which the public liability has been explicitly determined.
Firstly, in the year 1986 Supreme Court of India delivered a historic judgment relating to the liability of Shriram Corporation, Delhi in MC Mehta v. Union of India. The case related to the closure of units that dealt with hazardous substances. Delhi High court case, later transferred to Supreme Court of India in which court established the liability of Shriram industries and came up with a new environmental principle of absolute liability according to which suppose the entity or a person engaged in the hazardous activity that would harm others in case of escape. In that instance, the person or the entity shall be liable absolutely in case of the same damages to the others and liable to pay compensation to all those who got affected. It was the first and most crucial judgment ever in the history of Indian environmental law jurisprudence in which judges actively participated to ensure the public liability was imposed on violators.
This particular judgment was cited in the following case of Union Carbide Corporation v. Union of India. The tragedy is still being spoken by many for the twists that it witnessed as courts in India was allotted to reduce the amount of compensation. In this case, Supreme Court considered the importance of ensuring the duty vested on them both from humane conditions as well as from judicial duty. The court referred the Oleum gas leak case and made UCC liable for their settlement.
Recently, 2020 witnessed another toxic gas leakage in India at Vishakapatnam in which Korean Firm LG polymers was the defendant. In this case, National Green Tribunal issued orders as per the NGT act of 2010. A compensation of around 50 crores was imposed on LG polymers. Even though the Public liability insurance act was not the legislation involved, the requirements were referred by the tribunal regarding the same.
