INTRODUCTION
Example: Bhopal Gas Tragedy (deaths over 3500 people) & LG Polymers (deaths over 11 people)
The Public Liability Insurance Act 1991 was framed for the purpose of providing immediate relief to the persons affected by accident occurring while handling any hazardous substance and for matters connected therewith or incidental thereto.
Therefore, under Public Liability Insurance Act 1991, every owner, before starting to handle any hazardous substances, have to take out one or more policies covering liabilities for providing immediate relief on a specified scale to any person suffering injury or damage to property, in event of death, to legal heirs of the deceased.
This act is related to immediate relief and not compensation. The victims have a right to claim compensation under any other law in face.
The Act relates to the handling (manufacturing, processing, treatment, packaging, storage, transportation, use, collection, destruction, conversion, offering for sale, transfer or the like) of hazardous substances (any substance or preparation which is defined as hazardous substance under the Environment Protection Act, 1986 and exceeding such quantities as may be specified by notification). List of chemicals with quantities for application of Public Liability Insurance Act.
OBJECTIVE
1. It provides immediate minimum relief to effected people
2. It ensures `No Fault Liability’ against the owners of hazardous substances. In other words, it could be said that the owner of a hazardous substance must have insured so that any person injured or died of any hazardous substance could claim compensation, without going into any question of fault on the part of the owner.
DEFINITIONS
UNDER SECTION 2. (A) ACCIDENT
“Accident” means an accident involving a fortuitous (accidental) or sudden or unintended occurrence while handling any hazardous substance resulting in continuous or intermittent or repeated exposure to death of, or injury to, any person or damage to any property but does not include an accident by reason only of war or radio-activity.
UNDER SECTION 2. (D) HAZARDOUS SUBSTANCE
“Hazardous substance” means any substance or preparation which is defined as hazardous Substance under the Environment (Protection) Act, 1986 (29 of 1986), and exceeding such quantity as may be specified, by notification, by the Central Government;
UNDER SECTION 2. (G) OWNER
“Owner” means a person who owns, or has control over handling, any hazardous substance at the time of accident and includes,—
(i) in the case of firm, any of its partners;
(ii) in the case of an association, any of its members; and
(iii) in the case of a company, any of its directors, managers, secretaries or other officers who is directly in charge of, and is responsible to, the company for the conduct of the business of the company;
UNDER SECTION 3 LIABILITY TO GIVE RELIEF IN CERTAIN CASES ON PRINCIPLE OF NO FAULT
(1) Where death or injury to any person (other than a workman) or damage to any property has resulted from an accident, the owner shall be liable to give such relief as is specified in the Schedule for such death, injury or damage.
(2) In any claim for relief under sub-section (1), the claimant shall not be required to plead and establish that the death, injury or damage in respect of which the claim has been made was due to any wrongful act, neglect or default of any person
RELIEF MENTIONED IN SCHEDULE
(i) Reimbursement of medical expenses incurred up to a maximum of Rs. 12,500 in each case.
(ii) For fatal accidents the relief will be Rs. 25,000 per person in addition to reimbursement of medical expenses if any, incurred on the victim up to a maximum of Rs. 12,500.
(iii) For permanent total or permanent partial disability or other injury or sickness, the relief will be (a) reimbursement of medical expenses incurred, if any, up to a maximum of Rs. 12,500 in each case and (b) cash relief on the basis of percentage of disablement as certified by an authorised physician. The relief for total permanent disability will be Rs. 25,000.
(iv) For loss of wages due to temporary partial disability which reduces the earning capacity of the victim, there will be a fixed monthly relief not exceeding Rs. 1,000 per month up to a maximum of 3 months: provided the victim has been hospitalised for a period exceeding 3 days and is above 16 years of age.
(v) Up to Rs. 6,000 depending on the actual damage, for any damage to private property.
UNDER SECTION 4 DUTY OF OWNER TO TAKE OUT INSURANCE POLICIES
1. Owner of any hazardous company shall take out insurance policy as soon as commencement of this act
2. Renew the policy before expiry of the policy or within the period of limitation
3. Amount of insurance not less than the paid up capital of the company and not more than fifty crore rupees
4. The liability of the insurer under one assurance policy shall not exceed the amount specified in the terms of the contract of insurance in that insurance policy.
UNDER SECTION 5 VERIFICATION AND PUBLICATION OF ACCIDENT BY COLLECTOR
Whenever it comes to the notice of the Collector that an accident has occurred at any place within his jurisdiction, he shall verify the occurrence of such accident and cause publicity to be given in such manner as he deems fit for inviting applications.
UNDER SECTION 6 APPLICATION FOR CLAIM FOR RELIEF
(1) An application for claim for relief may be made—
(a) By the person who has sustained the injury;
(b) By the owner of the property to which the damage has been caused;
(c) Where death has resulted from the accident, by all or any of the legal representatives of the deceased; or
(d) By any agent duly authorised by such person or owner of such property or all or any of the legal representatives of the deceased.
(2) No application for relief shall be entertained, unless it is made within five years of the occurrence of the accident.
UNDER SECTION 7 AWARD OF RELIEF
On receipt of an application, the Collector shall, after giving notice of the application to the owner and after giving the parties an opportunity of being heard, hold an inquiry into the claim or, each of the claims, and may make an award determining the amount of relief which appears to him to be just and specifying the person or persons to whom such amount of relief shall be paid.
The insurer, who is required to pay any amount in terms of such award and shal pay within a period of thirty days of the date of announcement of the award, deposit that amount in such manner as the Collector may direct
Fails to deposit the amount of such award within the period specified, such amount shall be recoverable from the owner, or as the case may be, the insurer as arrears of land revenue or of public demand.
UNDER SECTION 7A. ESTABLISHMENT OF ENVIRONMENTAL RELIEF FUND
The Central Government may, by notification, establish a fund to be known as the Environmental Relief Fund.
An owner shall contribute to the Environmental Relief fund a sum equal to the premium payable to the insurer and every contribution to the Environmental Relief Fund shall be payable to the insurer, together with the amount of premium.
UNDER SECTION 9, 10 & 11 POWER TO CALL INFORMATION / ENTRY AND INSPECTION / SEARCH ADN SEIZURE
Public Liability Insurance Act deals with the powers to call for information, entry, inspection, search and seizure. The owner of hazardous installation becomes obligated to submit to a person authorized by the Central Government such information the inspector reasonably needs for the purpose of determining, any requirements, rule or directions made under this Act, require compilation.
UNDER SECTION 12 POWER TO GIVE DIRECTIONS
Section 12, of the Public Liability Insurance Act 1991 empowers the Central Government to issue directions in writing to any owner, officer, or agency. The directions also include the
(a) Prohibition or regulation of the handling of any hazardous substance; or
(b) Stoppage or regulation of the supply of electricity, water or any other service.
Failure to comply with direction u/s 12 of the PLI act as above or not taking an insurances policy or not contributing to the relief fund will invite imprisonment which shall extend from 18 months to 72 months (24 months to 84 months in case of repeated offers). A maximum imprisonment of 3 months and a fine of 10000 Rs is prescribed for other offences (obstruction etc).
UNDER SECTION 16 OFFENCES BY COMPANIES
Where any offence under this Act has been committed by a company, every person who, at the time the offence was committed, was directly in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly
UNDER SECTION 21 ADVISORY COMMITTEE
(1) The Central Government may, from time to time, constitute an Advisory Committee on the matters relating to the insurance policy under this Act.
(2) The Advisory Committee shall consist of (appointed by the Central Government)
(a) Three officers representing the Central Government;
(b) Two persons representing the insurers;
(c) Two persons representing the owners; and
(d) Two persons from amongst the experts of insurance or hazardous substances.
(3) The Chairman of the Advisory Committee shall be one of the members representing the Central Government, nominated in this behalf by that Government.
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