The Public Liability Insurance Act of 1991 intends to provide public liability insurance for the purpose of providing rapid assistance to persons impacted by an accident that occurs while handling any hazardous substance for problems related to or incidental to the hazardous substance.
Before beginning to handle any hazardous substance, every owner, i.e., a person who has control over the handling of any hazardous substance, shall take out one or more insurance policies providing for contracts of insurance whereby he is insured against liability to provide relief in the event of death or injury to a person, or damage to any property, arising from an accident occurring while handling any hazardous substance. In the case of already-existing units, an insurance policy or policies must be obtained as soon as plausible, but no later than one year after the Act’s enactment. Such liability will be based on the “no fault” theory.
“Hazardous material” refers to any substance or preparation that is capable of harming humans, other living animals, plants, microorganisms, property, or the environment due to its chemical or physio-chemical qualities or handling. 2 “Handling” refers to the manufacture, processing, treatment, packaging, storage, transportation by vehicle, use, collection, destruction, sovereign, offering for sale, transfer, and other activities involving hazardous substances.
The Public Liability Insurance Act of 1991 applies to all owners involved in the production or handling of hazardous chemicals, and its purpose is to provide immediate relief to victims and persons (other than workers) affected by accidents that occur while handling hazardous
substances through the insurance amount paid by the hazardous substance’s owner. Community members who have been injured or whose property has been damaged as a result of the business are covered by coverage insurance. Coverage insurance protects a person or business in the event of a workplace accident.
REASON BEHIND THE ADOPTION OF THIS LAW
BHOPAL GAS TRAGEDY
UNION CARBIDE CORPORATION V. UNION OF INDIA
It is also known as the Bhopal disaster, which resulted in the deaths of thousands of people. On a frigid winter night in the early hours of December 3, 1984, this is considered the world’s biggest industrial tragedy. A chemical reaction started about midnight at the Union Carbide (India) Limited factory, resulting in the leakage of the lethal gas methyl isocyanate (MIC) from one of the tanks. As a result, the gas cloud grew larger and larger, eventually engulfing the city in its lethal folds. The city and the lake had both turned into a gas chamber. Thousands more were physically injured and affected in various ways as a result of the disaster, which claimed the lives of about three thousand individuals.
Wildlife was killed, injured, and contaminated as a result of the incident. The company was completely cut off from the rest of the world. The lives of many people were impacted. The environment had been polluted, causing ecological and fauna disturbances. The Union Carbide Factory allegedly released forty tonnes of methyl isocyanate (MIC) gas. The lessons learnt in the aftermath of the Bhopal gas disaster were rapidly forgotten.
Because of the enormous number of casualties, the majority of whom were from lower socioeconomic groups, a unique difficulty with compensation claims arose. A considerable number of cases were filed on behalf of the victims in Bhopal and in the United States of America against the UCC. The Government of India and the UCC attempted, but failed, to reach an out-of-court settlement. The Indian government then issued an Ordinance, and the “Bhopal Gas Leak Disaster (Processing of Claims) Act3, 1985” was passed.
Section 3 of the Act gives the Central Government the exclusive power to represent and act on behalf of anyone who has made or is entitled to make a claim arising out of or related to the Bhopal gas leak disaster. The Government of India also enacted “The Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme, 1985,” which was made possible by Section 9 of the Act. The Union of India filed a complaint against the UCC in the United States District Court of New York on behalf of all claimants, using the power granted to it under Section 3. This action superseded and merged all previous claims filed in the United States of America by various American lawyers.
The UCC argued that the lawsuit should be dismissed due to a lack of jurisdiction. non convenience, i.e., the case can be tried more conveniently in India, because, among other things, India was the site of the disaster, and the plant workers, victims, witnesses, documents, and any other relevant evidence were all located there. The Union of India, on the other hand, claimed that the Indian judiciary has yet to mature due to restrictions imposed by British control, and that the Indian courts are not equipped to handle the case. Judge Kenon accepted UCC’s claim of
forum non convenient, rejected the Union of India’s claim, and dismissed the Indian action on that basis. The Union of India filed a complaint in the District Court of Bhopal after the suit in the United States was dismissed. M.W. Deo, the District and Sessions Judge, directed the UCC to pay Rs. 350 crores in interim relief to the gas victims. Mr. Justice S.K. Seth decreased the amount of “interim compensation” owed from Rs. 350 crores to Rs. 250 crores in response to a Civil revision plea filed by the U.C.C. in the Madhya Pradesh High Court against the order of the Bhopal District Court. On the one hand, the UCC was said to have decided to appeal the decision requiring it to pay interim compensation, while on the other hand, it had devised a new strategy for outmanoeuvring the Indian government by negotiating directly with the Gas victims through their lawyers in India and the United States. On the request of the Union of India, the District and Session Judge of Bhopal, Mr. M.W. Deo, issued an interim injunction prohibiting the UCC from reaching any settlement or compromise with any individual until further orders are issued. According to sources, the UCC was also attempting to reach an out-of-court settlement with the Union of India.
In M.C. Mehta v. Union of India, the Supreme Court adopted the rule of “Absolute Liability” over the rule of “Strict Liability” established in Rylands v. Fletcher in terms of the legal situation of the case. As a result, the UCC could not avoid accountability by claiming sabotage as a defence, as allowed by the Rylands v. Fletcher rule. The Supreme Court in M.C. Mehta established the following principle:
‘’Where an enterprise is engaged in 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 the 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 principle of strict liability under the rule is Rylands v. Fletcher.’’
SIGNIFICANT PROVISIONS MADE UNDERPUBLIC LIABILITY INSURANCE ACT
1.An accident is a sudden or unexpected event involving a hazardous chemical that produces continuous or temporary exposure or damage to a person but is not caused exclusively by war or war radioactivity.
2.Managing hazardous substances entails managing the manufacturing, handling, packaging, storage, and transportation of vehicles, as well as collecting, destroying, converting, making offers for sale, and removing dangerous substances from the environment. In line with subsection 3 of Section 1, insurance is liability insurance.
3.At the time of the accident, the owner is the one who controls and manages hazardous substances:
A) In the case of a firm, partners
B) Any member in case of an association
CONCLUSION
The public liability insurance statute was enacted after section 13 of the Rio Declaration on the Environment was adopted in 1992, according to this study. After the Bhopal Gas Tragedy, it became clear that this law was needed. The authority to request information, entry, inspection, search, and seizure is governed by this Social Responsibility Law. Owners of hazardous facilities attempt to disclose information that has been allowed by the central government so that inspectors can impose requirements, rules, or instructions in line with the law.
The central government has the authority to offer written directions to any owner, employee, or agent under Section 12 of the Liability Insurance Act 1991. Restrictions or limits on handling hazardous substances are also included in the instructions. It can also shut down or control the power supply.
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