General Legislations On Environment

Index 1. THE ENVIRONMENT (PROTECTION) ACT, 1986 • • • • • •

Preamble Meaning of ‘Environment’, ‘Environment Pollutant’ and ‘Environment Pollution’ Analysis of Definition Broad Powers Given To Central Government Violations and Penalties under the Act Citizen’s Suit Provision

2. THE NATIONAL ENVIRONMENT TRIBUNAL ACT, 1995 • • • • • • • • • •

Background Objects and Reasons Important Definitions Compensation Provisions Compensation of Tribunals and its Benches Jurisdiction and Proceedings of Tribunals Overriding Effect of the Act Relationship with Public Liability Insurance Act Assessment of NETA Union Carbide Corporation v. Union of India (AIR 1990 SC 273)

3. THE PUBLIC LIABILITY INSURANCE ACT, 1991 • • • • • • •

Background No Fault Liability/Application for Claim for Relief Duties and Powers of Collector Powers of Central Government Penalties Overriding Effect of the Act Shortcomings of the Act

4. THE NATIONAL ENVIRONMENT APPELLATE AUTHORITY ACT, 1997 • • • • •

Background Composition of Authority Jurisdiction and Powers of Authority Penalty for Non-Compliance with Orders of Authority Offences by Companies

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A.P. Pollution Control Board v. M.V. Nayudu (AIR 1999 SC 812)

THE ENVIRONMENT (PROTECTION) ACT, 1986 AND ITS ANALYSIS PREAMBLE According to the Preamble, the objective of the Environment Act is “to provide for the protection and improvement of environment and for matters connected therewith”. The Act is a special law and extends to the whole of India. MEANING OF ‘ENVIRONMENT’, ‘ENVIRONMENT POLLUTANT’ AND ‘ENVIRONMENT POLLUTION’ The title of the Environment Act gives an impression that the law signifies a hallmark of a change in emphasis from the narrow concept of pollution control to the wider aspects of environmental protection. According to Sec. 2 (a), “environment” includes water, air, land and the inter-relationship which exists among and between water, air and land, and human beings, other living creatures, plants, microorganisms and property. Environmental pollutant is defined in Sec. 2 (b) as any solid, liquid or gaseous substance present in such concentrations as may be, or tend to be, injurious to the environment. Environmental pollution is defined in Sec. 2 (c) as the presence in the environment of environmental pollutant. ANALYSIS OF DEFINITIONS GIVEN UNDER SECTION 2 Sec. 2 shows a total lack of understanding of the modern concept of environmental pollution and the factors that lead to the imbalance of the ecosystem. The modern concept of environmental pollution is wider. It may be said that any sort of deviations of any substance from its original place and removal of its origin is called environmental pollution because such transferability may cause or tend to cause damage or injury to the nature. As for example, a plant is removed from its original place and planted in a new place may cause soil pollution for such amputation. In the Act, emphasis is on the physical condition of air and water. The major urban environmental ills like noise, traffic, slums and congestion are conspicuously absent from the Act and no provisions have been made for their control. Further, the Act focuses on environmental pollution and hazardous substance alone, as source of environmental

degradation. This focus ignores other causes of degradation such as deforestation and unrestrained development. The definition of environmental pollutant includes solid, liquid or gaseous ‘substances’ only. There are pollutants which are not substances e.g. heat energy (which causes thermal pollution), nuclear radiations, and sound (which causes noise pollution). The definition of environmental pollution is narrow and commonplace. The Act considers pollution to be something like adulteration. It is universally accepted that any environmental modification which has undesirable short term or long term effect on the welfare of the environment is environmental pollution. It is not only the presence of certain substances that form pollution; the absence or decrease in concentration, or nonavailability of a non-pollutant also forms pollution. If oxygen is withdrawn from the environment in quantities, detrimental to the environment, it forms an instance of pollution. Thus, the definition of ‘environment’ under the Environment (Protection) Act is not exhaustive but inclusive one. If the expression “includes and means” used in the definition, than it would become an exhaustive definition. However, a meeting of experts recommended that “an inclusive definition will have the distinct advantage for the exercise of vast rule-making power under the Act and for a more effective enforcement of the Act, Exhaustive definitions in an evolving field like environment, are likely to lead to recourse to judicial interpretation of highly complex scientific and technological matters, whose complexion is ever changing as knowledge accumulates dynamically”. BROAD POWERS GIVEN TO CENTRAL GOVERNMENT Sec. 3 of the Act empowers the Centre to take all such measures as it deems necessary or expedient for the purpose of protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution. The Central Government is authorized to set new national standards for the quality of the environment as well as standards for controlling emissions and effluent discharges; to regulate industrial locations; to prescribe procedure for managing hazardous substances to establish safeguards for preventing accidents and to collect and disseminate information regarding environmental pollution. Under Sec. 4, the Central Government has authority to appoint officers with such designations as it thinks fit for the purpose of this Act and may entrust to them such of the powers and functions under this Act as it may deem fit. Under Sec. 5, the Central Government has authority to issue direct written orders, including orders to close, prohibit, or regulate any industry, operation or process or to stop or regulate the supply of electricity, water or any other service. Under Sec. 6, the Central Government has also the authority to make such rules as it may deem fit in order to regulate environmental pollution.

Other powers granted to the Central Government to ensure compliance with the Act include the power of entry for examination, testing of equipment, etc. (Sec.10) and the power to take samples of air, water, soil or any other substances from any place for analysis (Sec.11). When one compares the provisions of the Water and Air Act with those of the Environment (Protection) Act it becomes clear that the powers and functions similar to those vested in the Boards under the Water and Air Acts are vested in the Central Government under the Environment (Protection) Act. The critiques conclude that the Act is conceptually identical to the Air Act and Water Act and does not provide the Central Government with new tools (e.g. environmental impact assessment) for preventing environmental degradation. Further, concentration of powers in the hands of the Central Government is not a wise step towards environmental protection. It is likely, in some cases that decisions of the Government may be influenced rather by political considerations than by environmental ones. Thus, the task has to be entrusted to an independent and expert agency created by statute. VIOLATIONS AND PENALTIES UNDER THE ACT The Act explicitly prohibits discharge of environmental pollutants in excess of prescribed regulatory standards (Sec.7). Sec. 15 prescribes the penalties for offences under the Act – a prison term of up to 5 years or a fine of up to Rs. 1 lakh, or both. The Act imposed an additional fine of up to Rs.5,000 for every day of continuing violation. If a failure or contravention occurs for more than one year after the date of conviction, an offender may be punished for up to 7 years imprisonment. The critics say that these provisions have a tendency to protect the guilty rather than the environment. Strangely enough, no minimum punishment is prescribed. A minimum of 2 years’ rigorous imprisonment should have been mandatorily provided for offences of environmental pollution. Further, the loopholes provided in Secs. 16 and 17 to get off the hook on proof of lack of knowledge or due diligence also dilute the effect of penal provisions. The Act makes corporate officials/Heads of Government Departments liable for the offences under the Act unless the official/Head can establish that the offence was committed without his knowledge or that he has exercised all due diligence to prevent the commission of the offence (Sec. 16&17). Sec. 24 of the Act is a curious and controversial provision. This section postulates that where an offence under this Act is also an offence under any other Act, the offender shall be punished only under the other Act. This may lead to conflicts and negation of the Environment (Protection) Act provisions, because standards established under the

Environment (Protection) Act are also the subjects of other statutes, such as the Water Act and Air Act. Therefore, in such cases severe penalties of the Environment (Protection) Act will simply remain on paper. For this reason the Act has been described as a “cobra that is seemingly fierce but has no venom in its fangs”. Environment Act also lacks any provision providing for an individual’s right to sue a defaulter for damages. CITIZEN’S SUIT PROVISION Until the enactment of the Environment (Protection) Act, the power to prosecute under Indian environmental laws belonged exclusively to the government. The in the Environment (Protection) Act expands the concept of locus standi in environmental prosecutions. Similar provisions allowing citizens participation in the enforcement of pollution laws are now found in Sec. 43 of the Air Act (as amended in 1987) and Sec. 49 of the Water Act (as amended in 1988). Sec. 19 of the Environment (Protection) Act provides that any person, in addition to authorized government officials, may file a complaint with a court alleging an offence under the Act. However, the person must give notice of not less than 60 days of the alleged offence and the intent to file a complaint with the government official authorized to make such complaints. The citizen’s suit provision appears to give the public significant powers to enforce the Environment (Protection) Act. However, some critics are of the view that during the 60 days notice period required for the government to decide whether to proceed against the alleged violation, the offending industry has time to clean up traces of the offence and prepare itself for the collection of samples. Further, the government may file a complaint but does not pursue prosecution diligently. There are no rules which require the publishing of information by polluters. The citizen’s suit provision may become an effective enforcement tool if industries were required to make mandatory public reports concerning their pollutant emissions and discharges.

NATIONAL ENVIRONMENT APPELLATE AUTHORITY ACT, 1997 AND ITS ANALYSIS BACKGROUND On 30th January 1997, the President of India, in exercise of the powers conferred under Art. 123 of the Constitution of India promulgated an ordinance to provide for the establishment of a National Environment Appellate Authority (NEAA) to hear appeals with respect to restriction in areas in which any industries, operations or processes shall not be carried out or shall be carried out subject to certain safeguards under the Environment (Protection) Act, 1986. The said ordinance has been replaced by the National Environment Appellate Authority Act, 1997. Sec. 3 of the NEAA Act provides that the Central Government shall, by notification in the official gazette, establish a body to be known as the National Environment Appellate Authority (hereinafter referred to as ‘Authority’). The Central Government has appointed the Authority on 17/01/1998. Justice J.S. Verma, while inaugurating the NEAA stated that its establishment was a very positive response of the executive, as it would bring desired result in the least possible time. With effect from the date of establishment of the Authority, no civil court or other authority shall have jurisdiction to entertain any appeal in respect of any matter with which the Authority is empowered by or under this Act (Sec.15). The headquarters of the Authority shall be in Delhi. However, the appeals may be heard at the headquarters or at the discretion of the Chairperson, at any other place (Rule 4, The National Environment Appellate Authority Rules, 1997). COMPOSITION OF AUTHORITY The Authority shall consist of a Chairperson, a Vice-Chairperson and such other members (to be appointed by the President) not exceeding three as the Central Government may deem fit (Sec.4). A person to be appointed as Chairperson should have been a judge of the Supreme Court, or the Chief Justice of a High Court. A person to be appointed as ViceChairperson shall have for at least two years held the post of a Secretary to the Government of India, and expertise or experience in administrative, legal, managerial or technical aspects of problems relating to environment. A person to be appointed as a member of the Authority should have the professional knowledge or practical experience in the areas pertaining to conservation (Sec. 5).

JURISDICTION AND POWERS OF AUTHORITY Under the Act, any person who feels aggrieved by an order granting environmental clearance in the areas in which any industries, operations or processes shall not be carried or shall be carried out subject to certain safeguards, may file an appeal to the Authority within 30 days from the date of such order. However, the Authority may entertain an appeal beyond this period if there was sufficient cause for delay in filing the appeal. The Authority is required to dispose of the appeal within 90 days from the date of filing of the appeal. However, it may for reasons to be recorded in writing dispose of the appeal within a further period of 30 days (Sec. 11). The Authority shall not be bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and subject to other provisions of the Act and of any rules made by the Central Government. The Authority shall also have the power to regulate its own procedure. For the purpose of discharging its functions, the Authority shall have the same powers as are vested in a civil court under the Code of Civil Procedure (Sec. 12). PENALTY FOR NON COMPLIANCE WITH ORDERS OF AUTHORITY Whoever fails to comply with any order made by the Authority, he shall be punishable with imprisonment for a term which may extend to 7 years, or with fine which may extend to one lakh rupees, or with both (Sec. 19). OFFENCES BY COMPANIES Where any offence is committed by a company, every person directly in charge of and 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 punished accordingly. However, the corporate executive has not been held absolutely liable if he proves that the offence has been committed without his knowledge or that he exercised due diligence to prevent such offence, he can be exonerated from the liability (Sec. 20). It is submitted that the executive has done well by establishing the National Environment Appellate Authority. It is hoped that in the environment matters, justice shall be delivered quickly and the Authority would go a long way to fulfill the long felt need. In A. P. Pollution Control Board (Discussed later) the Supreme Court held that in addition to its statutory jurisdiction, the Appellate Authority also had an advisory role to play in complicated environmental matters that were referred to it by the Supreme Court or the High Court. The definition of ‘person’ within the Act is very liberal. Further, the constitution of the Authority is such as to ensure its independence (the members are appointed by the President and enjoy a secure tenure) and inspire confidence in the public.

Significantly, the appellate jurisdiction is limited only to cases where environmental clearance is granted and does not extend to cases where clearance is refused. A.P. POLLUTION CONTROL BAORD v M.V. NAYUDU (AIR 1999 SC 812) The Supreme Court in this case again expressed the need for the establishment of environmental courts consisting of judicial and scientific expertise. It suggested amendments in environmental statutes to ensure that in all environmental courts, tribunals and appellate authorities, there is always a judge o the rank of a High Court judge – sitting or retired – and scientist or group of scientists so as to help a proper and fair adjudication of environmental - related disputes. The Supreme Court felt that the practice adopted by the higher courts thus far of resolving dispute matters through help of commissions may not be sustainable over a long term. The Supreme Court observed: “Of paramount importance in the establishment of environmental courts, authorities and tribunals is the need for providing adequate judicial and scientific input rather than leave complicated disputes regarding environmental pollution to officers drawn only from the executive.” It held: Environmental concerns arising in the Supreme Court or in the High Courts are of equal importance as the human rights concerns. Both are to be traced to Article. 21, which deals with the fundamental right to life and liberty. While environmental aspects concern “life”, human rights concern “liberty”. In the context of emerging jurisprudence relating to environmental matters, it is the duty of the Supreme Court to render justice by taking all aspects into consideration. With a view to ensure that there is neither damage to the environment nor to the ecology and, at the same time ensuring sustainable development, the Supreme Court while dealing with environmental matters under Art. 32 (or the High Courts under Art.226) can refer scientific and technical aspects for investigation and opinion to statutory expert bodies having combination of both judicial and technical expertise in such matters, like the Appellate Authority under the National Environment Appellate Authority Act, 1997. The apex court felt an immediate need that in all States and Union Territories, the appellate authorities under the Water Act, 1974 and Air Act, 1981 or other rules, there is always a judge of High Court and a scientist or group of scientists to help in the adjudication of environment-related disputes. The court pointed out that need of amending notifications under these Acts as well as notification under Rule 12 of the Hazardous Wastes (Management and Handing) Rules, 1989. The National Environmental Appellate Authority Act, 1997 comes very close to the ideals set by the Supreme Court.

The Authority, being combination of judicial and technical inputs, possesses expertise to give adequate help to the Supreme Court and High Courts to arrive at decisions in environmental matters. The court in above case referred the issue of determination of the hazardous nature of the respondent industry to the Appellate Authority.

THE NATIONAL ENVIRONMENT TRIBUANAL ACT, 1995 AND ITS ANALYSIS BACKGROUND By virtue of Sec. 3(3) of the Environment (Protection) Act, 1986, the Central Government has powers to order constitution of an authority or authorities by such name(s) as may be specified in such order, for the purpose of exercising and performing such powers and functions as may be specified as necessary to protect and improve environment. The United Nation Conference on Environment and Development held at Rio de Janeiro in 1992, in which India participated, has also called upon the States to develop National Laws regarding liability and compensation for the victims of pollution and other environmental damage. The National Environment Tribunal Bill, 1992, was formulated in view of the fact that civil courts litigation take a long time (as happened in Bhopal case) National Environment Tribunal Act (NETA), 1995, was thus enacted. OBJECTS AND REASONS The Act provide for strict liability for damages arising out of any accident occurring while handling any hazardous substance and for the establishment of a National Environment Tribunals for effective and expeditious disposal of cases arising from such accident, with a view to giving relief and compensation for damages to persons, property and the environment and for the matters connected therewith or incidental thereon. The principle of ‘strict’ civil liability (absolute or no-fault liability) arising from the activities involving hazardous substances has been highlighted in M.C. Mehta’s case (Shriram Gas Leak case): “An enterprise engaged in activities with potential threat to the health and safety of the persons residing in the surrounding areas of the factory owes an absolute duty to the community to ensure that no harm is caused to any one on account of hazardous and inherently dangerous nature of such activities” Cases seeking compensation for damages to human health, property and the environment, particularly contamination of sub-surface water, are increasing. There is also an increasing trend in the number of industrial disasters. The Environment Tribunal Act codifies the principle of strict civil liability in respect of all such cases where damage is cause while handling hazardous substances.

IMPORTANT DEFINITIONS “Accident” means an accident involving a fortuitous 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 or environment but does not include an accident by reason only of war or radio-activity [Sec. 2 (a)]. “Hazardous substance” means any substance or preparation which is defined as hazardous substance in the Environment (Protection) Act, 1986 [“hazardous substance” means any substance or preparation which, by reason of its chemical or physico-chemical properties or handling, is liable to cause harm to human beings, other living creatures, plants, microorganisms, property or the environment] and exceeding such quantity as specified by the Central Government under the Public Liability Insurance Act, 1991 [Sec. 2(f)]. It may be noted that the definitions of “handling” and “hazardous substance” as defined under this Act are different from those provided in the corresponding sections of the Environment (Protection) Act, 1986. Hence, the treatment, connotation or interpretation thereof varies under the said Acts. “Handling” in relation to any hazardous substance, means the manufacture, processing, treatment, package, storage, transportation by vehicle, use, collection, destruction, conversion, offering for sale, transfer or the like of such hazardous substances”. “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 a 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 company’s business [Sec.2(o)]. COMPENSATION PROVISIONS Sec. 3 recognizes the liability to pay compensation in certain cases on principle of “no fault”. Clause (1) provides that where death of, or injury to, any person (other than a workman) or damage to any property or environment has resulted from an accident, the owner shall be liable to pay compensation. Clause (2) lays down that in any such claim for compensation, the claimant shall not be required to plead an 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. Sec. 3(3) provides that if the death, injury or damage caused by an accident cannot be attributed to any individual activity but is the combined or resultant effect of several such activities, operation and processes, the tribunal may apportion the liability for

compensation amongst those responsible for such activities, operations and processes on an equitable basis. Application for claim for compensation (Sec.4) – A notable feature of the NET Act is the incorporation of the provision relating to public participation in espousing the cause of victims. Incentive to community participation will go a long way in influencing the trial through meaningful debate, public opinion, media spotlights and public pressures in an expeditious and effective manner. Sec. 4(1) provides that an application may be made by the injured person himself or in case of his death by his legal representatives; by the owner of the damaged property; by any agent duly authorized by injured person or his legal representatives or owner of such property; by any recognized representative body or organization functioning in the field of environment; or, by the Central/State Government or a local authority. Further, Sec. 4(2) lays down that the Tribunal may, fit thinks fit, take up the cases for claims for compensation suo motu (on its own motion). Sec. 4(6) provides the limitation period for such applications. No application for compensation shall be entertained unless it is made within five years of the occurrence of the incident. Procedure and powers of Tribunal (Sec.5) – On receipt of an application, the Tribunal may, after an inquiry, reject the application summarily. Where the Tribunal does not reject the application, it may, after giving notice of the application to he owner and after giving the parties an opportunity of being heard, hold an inquiry into the claim and may make an award determining the amount of compensation which appears to be just and specifying the person(s) on whom such amount shall be paid. The Tribunal shall have the same powers as are vested in a civil court, while trying a suit. However, it shall not be bound by the procedure laid down in C.P.C., but shall be guided by the principles of natural justice, and it shall have power to regulate its own procedure. Sec. 27 lays down that all proceedings before the Tribunal shall be deemed to be judicial proceedings. Interim relief (Sec. 6) - Notwithstanding anything contained in any other provisions of this Act or in any other law for the time being in force, the Tribunal shall not make an interim order (injunction, stay, etc.) on an application unless copies of such application and of all documents in support of the plea for such interim order are furnished to the defendant party and an opportunity is given to him to be heard in the matter. However, in exceptional cases, the Tribunal may dispense with the above requirements, if it is satisfied for reasons to be recorded in writing, that it is necessary to do so for preventing any loss or damage being caused to the applicant which cannot be adequately compensated in money.

COMPOSITION OF TRIBUNALS AND ITS BENCHES Sec. 9 provides that the Tribunal shall consist of a Chairperson and such number of Vicechairpersons, Judicial members and Technical members as the Central Government may deem fit. Subject to the other provisions of this Act, the jurisdiction, powers and authority of the Tribunal may be exercised by Benches thereof. A Bench shall consist of one judicial member and one technical member. Subject to the other provisions of this Act, the Benches of the Tribunal shall ordinarily sit at New Delhi (which shall be known as the principal bench) and at such other places as the Central Government may, by notification, specify. A person shall not be qualified for appointment as the Chairperson/Vice-chairperson unless he is, or has been, a Judge of the High Court; or, has held the post of a Secretary to the Government of India 2 years or the post of additional secretary for 5 years; and has adequate knowledge of or experience in legal, administrative, scientific or technical aspects of the environmental problems. A Technical member is also required to possess such knowledge. A Judicial member must be a person who is, or has been, or is qualified to be a judge of High Court, or has been a member of the Indian Legal Service (Sec. 10). JURISDICTION AND PROCEEDINGS OF THE TRIBUNAL Sec. 19 lays down that on and from the commencement of this Act, all applications or actions for any claim for compensation which are subject to the Tribunal’s jurisdiction are barred from the jurisdiction of any other court or authority except such Tribunal. Sec. 20 provides that Chairperson has the power to transfer cases from One Bench to another. Sec. 21 provides that the case shall be decided according to the majority opinion. Sec. 22 provides that the amount of compensation on account of damage to environment shall be credited to the Environment Relief Fund. Sec. 23 provides that an award made by the Tribunal shall be executable as a decree of civil court. Sec. 24 contains provisions relating to appeals. An appeal shall lie against any award or other order (not being an interlocutory order) of the Tribunal to the Supreme Court. However, no appeal shall lie against an award/order made by the Tribunal with the consent of the parties. The limitation period for filing the appeal is 90 days. Sec. 25 provides for penalty for failure to comply with the orders of Tribunal. Failure to comply with any order of the Tribunal is subject to punishment by way of imprisonment of maximum up to three years, or fine maximum up to ten lakh rupees, or both. OVERRIDING EFFECT OF THE ACT Save as provided in the Public Liability Insurance Act (PLIA), 1991, the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force (Sec.30).

The jurisdiction and power of Tribunal and Collector (under the PLIA) are overlapping; PLIA has been saved under the NET Act but in case of inconsistency in the former the latter has precedence. It may be noted that Sec. 19 gives an ‘exclusive jurisdiction’ to the Tribunal to entertain any claim for compensation which may be dealt with by the Tribunal. RELATIONSHIP WITH PUBLIC LIABILITY INSURANCE ACT Both the Environment Tribunal Act and the Public Liability Insurance Act deal with the compensation for the victims of industries engaged in manufacturing hazardous substances. It may be noted that it is the Preamble of the NET Act (and that of the PLIA) which refer to “hazardous substances”; the body of both the Acts do not refer to hazardous substances. NET Act passed after four years of enactment of PLIA is similar in certain respects of the latter. Both Acts recognize a ‘no-fault’ liability standard. However, while the Environment Tribunal Act provides for the establishment of Tribunals for the speedy disposal of cases, the Public Liability Insurance Act provides for mandatory insurance for the purpose of providing an immediate relief to the victims. No “workman” has a right to claim for relief under both Acts. Any claimant making an application under the Environment Tribunal Act may also make an application before the Tribunal for such relief as is provided in the Public Liability Insurance Act. Provided that no such application shall be made if the relief has been received by the claimant earlier or an application made by the claimant to the collector under the said Act is pending and has not been withdrawn [Sec.4(3)]. Where in respect of death of, or injury to any person or damage to any property, the owner, liable to pay compensation under this Act, is also liable to pay any amount (relief) under the Public Liability Insurance Act or any other compensation under any other law, the amount of compensation pale under Environment Tribunal Act shall be reduced by the amount of relief and other compensation paid under any other law (Sec.7). ASSESSMENT OF THE NETA There is no doubt that the present Act was enacted with laudable objects but it is yet to be seen as to how far this Tribunal helps in taking up the cases pertaining to accidents resulting into damage to property, health and environment, effectively and speedily. The Act incorporates civil and strict liability, and claim of compensation by environmental NGOs. However, the compensation under the Act should not be limited to cases of hazardous or inherently dangerous activities; other environmental problems should also be covered.

Further, the composition of Tribunal has to be improved upon; the Vice-Chairperson (V.C.) should not be a bureaucrat. The composition of Tribunal viz. Chairperson, V.C. and Members is an undesirable mixture of judicial, technical members and bureaucrats. In exceptional circumstances, the Chairperson may authorize the V.C. (which may be a technical member) and to a technical member to adjudicate on intricate environ-legal or techno-legal issues. In these circumstances, the sheet-anchor of promulgation of the Act i.e. ‘the need for a neutral scientific expertise as an essential input to inform judicial decision’ can be frustrated like anything. UNION CARBIDE CORPORATION v. UNION OF INDIA (AIR 1990 SC 273) THE BHOPAL GASE LEAK CASE The Bhopal disaster raised complex legal questions about the liability of parent companies for the acts of their subsidiaries, the responsibilities of multinational corporations engaged in hazardous activities, the transfer of hazardous technologies and the applicable principles of liability. Bhopal was an inspirational factor for the judicial innovation in the area of evolving principles of corporate liability for use of hazardous technology. There were also amendments in the existing Acts and a complete new legislation, The Environment (Protection) Act, 1986, was brought about as a realization of inadequacy of the existing laws. In a fast developing economy, industrial ventures may at times lead to accidents causing pollution resulting in injury and even death. The Bhopal accident, worst ever industrial accident in history, is a glaring example. Till the Bhopal incident, the courts in India have been applying the principle of common law liability for compensating the victims of pollution. The post Bhopal era shows a significant change. On December 3, 1984, highly toxic methyl isocyanate (MIC) which had been manufactured and stored in Union Carbide’s chemical plant in Bhopal, escaped into the atmosphere and killed over 3,500 people and seriously injured about 2 lakh people. The nature and extent of the damage to the victims of the accident were so large and diffuse that quick decision by a court on the question of compensation was not easy. The Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 was passed by Parliament to ensure that the claims arising out of the Bhopal disaster were “dealt with speedily, effectively, equitably and to the best advantage of the claimants”. The Bhopal Act conferred an exclusive right on the Indian Government represent all claimants. In April 1985, shortly after the enactment of the Bhopal Act, the Indian Government sued Carbide in the United States. The US Court, however, declined to try the Bhopal law suit, declaring that India was the more appropriate forum.

In September 1986, the Indian Government sued Carbide in the court of the District Judge, Bhopal for Rs.3,900 crores (US $ 3 billion) in damages. However, the District Judge Deo made an interim payment award of Rs. 350 crores (US $ 270 million). The award was reduced by 30 percent by the High court judge Seth, who awarded interim damage of Rs. 250 crores (US $ 192 million), in April 1988. The case reached the Supreme Court through the separate appeals of Carbide and the Indian Government from the High Court judgement. During the hearing of the special leave appeal by a 5 judge Bench, the idea of compromise came up. On February 14, 1989, the Supreme Court induced the Government and Carbide to accept its suggestion for an “overall settlement” for the claim arising from the Bhopal Disaster. Under the settlement, Carbide agreed to pay US $ 470 million to the Government on behalf of all the Bhopal victims in full and final settlement of all past, present and future claims arising from the Bhopal disaster. The entire amount had to be and was paid by March 31, 1989. In December 1989, the Supreme Court upheld the constitutional validity of the Bhopal Act. However, the court acknowledged that the Bhopal Act entitled the victims to notice and an opportunity to be heard on any proposed settlement and that the February 1989 settlement failed to give such notice and hearing. But, the court concluded that in the special facts and circumstances of the case, “a post-decisional hearing would not be in the ultimate interest of justice” (Charan Lal Sahu v Union of India AIR 1990 SC 1480). Later, review petitions were filed by some of the victims in the Supreme Court. For the sake of convenience, the various stages of the Bhopal case could be divided under the following headings: (I) US COURT’S DECISION The Indian Government’s preference for an American Court stemmed from a lack of confidence in its own judicial system, the lure of large damages that an American jury might award, and its uncertainty about whether Union Carbide would submit to the jurisdiction of an Indian Court. Further, American courts routinely impose strict liability for accidents resulting from hazardous activities, and in such cases reject the notion that the parent corporation has a separate legal personality from its subsidiary. In USA, the case was dismissed on the grounds of forum non convenience. It was held that absence of a rule for class actions, which is identical to the American rules, does not lead to the conclusion that India is not alternative forum. The presence in India of the overwhelming majority of the witnesses and evidence, both documentary and real, would by itself suggest that India is the most convenient forum. All of the private interest factors weigh heavily toward dismissal of this case on the ground of forum non convenience. Justice Keenan of the U.S. District Court observed:

“The Union of India is a world power in 1986, and its courts have the proven capacity to make out fair and equal justice. India and its people can and must vindicate their claims before the independent and legitimate judiciary.” (II) BHOPAL DISTRICT COURT’S JUDGEMENT The plaint filed in the District Court, Bhopal, M.P., had four crucial components, according to Professor Baxi. First, India articulates a new conception of parens patriae role on which its capacity to sue Union Carbide Corporation (UCC) basically rests. Second, in order to pursue the UCC, and not the UCIL (Union Carbide India Limited), it has to develop the thesis that the UCC was the mind and soul of the Bhopal plant and the UCIL only its docile arm. Third, India needed to establish a standard, a principle, of liability appropriate to recompense victims of a toxic tort in a mass disaster situation. Fourth, India has to precisely identify the general pattern of injury to human health and environment as well as the individual units of injuries suffered by each Bhopal victim. The Union Carbide’s multiple defences were as follows: First, either the UCIL is an autonomous Indian Corporate entity or the UCC’s role was deliberately reduced by India’s sovereign functions of regulations. In neither case, is the UCC liable. Second, either there exists, awaiting recognition, the principle of absolute multinational liability or there is no such principle. If it so exists, it does not extend to the Bhopal case. If it does not, there is no case. In neither case, is the UCC liable. Third, either MIC, in the present state of knowledge is not ‘ultra hazardous’ or if it is hazardous it is no more so than other chemicals that India stores in large quantities. In neither case, is the UCC liable. Fourth, either the UCC is not liable at all or it if is liable, so are India and State of Madhya Pradesh. In neither case is the UCC liable. Driven by compassion for the Bhopal victims, Judge Deo ordered Carbide to pay interim compensation of Rs. 350 crores. This action had the effect of derailing the primary lawsuit against Carbide. It also raised questions of fair judicial procedure and the right to a trial on the merits before the issuance of a judgment. Carbide filed a revision application against the interim payment decision. (III) HIGH COURT’S JUDGMENT Justice Seth used English rules of procedure to create an entitlement to interim compensation (i.e. it is permissible for courts to grant relief of interim payment under the substantive law of torts). Under English rules, interim relief granted in personal injury

case if a prima facie case is made out. He said that “more than prima facie case have been made out” against the Carbide.

He observed that the principle of absolute liability without exceptions laid down in M.C. Mehta’s case applied more vigorously to the Bhopal suit. He hold that Carbide is financially a viable corporation with $ 6.5 billion (Rs.8,815 crore) unencumbered assets and $ 200 million (Rs.262 crore) encumbered assets plus an insurance which would cover up to $250 million worth of damages. Given Carbide’s resources, it is eminently just that it meet a part of its liability by interim compensation (Rs.250 crores). Professor Baxi applauds Justice Seth’s “precise measure of compensation”. But there seemed to be no indication that Justice Seth’s compensation figures – Rs. 2lakh for death or total permanent disability and Rs. 1 lakh for partial permanent disability – corresponded with objective data on actual costs of medical care, reduced life expectancy, loss of employment and loss of lifetime earning power. (IV) SUPREME COURT’S JUDGMENT (THE BHOPAL SETTLEMENT) Both UCC and the Indian Government applied against the High Court judgment. UCC claimed that the judgment was unsustainable because it amounted to a verdict without trial. The Indian Government appealed because Justice Seth had reduced by 30 per cent District Judge Deo’s earlier interim award. In Union Carbide Corporation v. Union of India (AIR 1990 SC 273), the Supreme Court secured a compromise between the UCC and Government of India. Under the settlement, UCC agreed to pay US $ 470 million in full and final settlement of all past, present and future claims arising from the Bhopal disaster. In addition to facilitate the settlement, the Supreme Court exercised its extraordinary jurisdiction and terminated all the civil, criminal and contempt of court proceedings that had arisen out of the Bhopal disaster. It was declared by the court that if the settlement fund is exhausted, the Union of India should make good the deficiency. The Bhopal settlement has largely been criticized. However, according to the supporters, the settlement appears to achieve the mixed private and public goals of compensation, corrective justice and deterrence. Although the Supreme Court’s orders do not ascribe liability to Carbide, the settlement implicitly establishes the multinational’s accountability. Further, the Bhopal settlement is the first in a mass tort case where a multinational had paid for the actions of its local subsidiary. One of the most outspoken critics of the settlement was former Chief Justice of India, P. N. Bhagwati. According to him, the court order places the value of India life at a ridiculously low figure. In the US $ 2.5 billion was paid by John Manville Corporation to 60,000 claimants for asbestos related injuries and $ 520 million by AH Robins Company to settle 9,450 injury claims by users of Dalkon Shield contraceptives. In

comparison, Bhopal victims have got “peanuts”. He further said it was difficult to understand how a landmark judgment disposing of the case for compensation was suddenly delivered by the Supreme Court when it was only an appeal against the interim order which was being argued and even in this appeal the arguments had not concluded. Further, he pointed out the failure of the government, as trustee for the victims, to consult with the victim’s organization. The court’s eagerness to secure immediate relief to the victims obscured its vision of what constitutes fair and adequate relief. The Supreme Court in its order of May 4, 1989, set forth the reasons for urging the settlement. The court stated that in view of the enormity of human suffering occasioned by the Bhopal Gas Disaster, thee was a pressing urgency to provide immediate and substantial relief to the victims. The court considered the sum ‘just reasonable and equitable’, because the idea of reasonableness for the present purpose is necessarily a broad and general estimate in the context of a settlement of the dispute and not on the basis of an accurate assessment by adjudication. The question is how good or reasonable it is as a settlement, which would avoid delays, uncertainties and assure immediate payment. In the process of arriving at the amount of compensation the court took into account several factors such as the number of fatal cases, instances of serous personal injury, medical expenses for treatment, loss of personal belongings and livestock, range of offers and counter-offers of parties, the estimate made by the High Court in fixing the interim compensation on the basis of the Mehta principle, etc. In quantifying the compensation what the court did was that in fixed the amount far higher than the average rates of compensation in comparable case (e.g. motor accident cases). Justice Ranganath Mishra said that the M.C. Mehta principle that in toxic mass tort actions arising out of a hazardous enterprise, the award for damages should be proportional to the economic superiority of the offender cannot be pressed to assail the Bhopal settlement. “The criticism of the Mehta principle, perhaps, ignores the emerging postulates of tortuous liability whose principle focus is the social limits on economic adventurism”. Thus, the trend of the decision evidently rules out the possibility of adverse comment that by resorting to a compromise the Supreme Court lost an opportunity to apply the Mehta doctrine in Bhopal. However, the Supreme Court seems to have deliberately missed an opportunity to develop new principles in relation to Multinational Corporations operating with inherently dangerous technologies in the developing countries. As the court itself said, it would have examined various dimensions of this problem like the protection of the environment, the permissibility of ultra hazardous technology, standards of disaster liability for multinational operating in developing countries, etc. The court did not proceed to deal with these issues as the need for immediate relief to the victims of the tragedy could not wait till these questions are elaborately examined and decided.

REVIEW PETITIONS Review petitions under Art. 137 and writ petitions under Art. 32 of the Constitution of India were filed questioning the constitutional and legal validity, propriety, and fairness and conscientious ability of the settlement of the claims of the victims in the mass tortaction. The settlement which had been decided was upheld. The ‘scheme’ under the Bhopal Act (providing for the registration and processing of claims) and the resultant categorization of the victims was also upheld. It was laid down that “there is no need to tie down the tort-feasor to future liability” {UCC v UOI AIR 1992 SC 248}. (V) THE BHOPAL ACT JUDGMENT In December 1989, the Supreme Court upholds the constitutional validity of the Bhopal Act, 1985. Under the Act, the Indian Government reserved for itself the exclusive right to represent all Bhopal victims in civil litigation against Carbide. The court in this case (Charan Lal Sahu v UOI AIR 1990 SC 1480) declared that “to do a great right, it is permissible sometimes ‘to do a little wrong’.” The great right, presumably, is the settlement, which finally will put money into the victim’s hands. The little wrong is the denial of a fair opportunity (i.e. a notice and opportunity to be heard on any proposed settlement) to the victims. The court outlined an action programme to avoid future Bhopals. The court inter alia called upon the Central Government to enact a law entitling future mass disaster victims to interim relief and damages, and to somehow compel multinationals engaged in hazardous activities to submit to the jurisdiction of Indian courts for damage claims that would reach their total global assets. The court observed that to ensure immediate relief, tribunals are to be constituted for determining compensation, appeal against which may lies to this court. Further, Industrial Disaster Fund should be established. The contribution to the Fund may be made by the government and the industries. The Fund should be permanent in nature so that money is readily available for providing immediate relief to the victims. (VI) CRIMINAL LIABILITY OF CARBIDE OFFICIALS In UCC v UOI AIR 1992 SC 248, the Supreme Court reinstated criminal charges for ‘homicide not amounting to murder’ (Sec. 304, Part II, IPC) against top executives at Union Carbide (viz. nine UCIL employees and three foreign accused, including Warren

Anderson, the CEO) while upholding the rest of the settlement. The CBI in Dec. 1993 finally prepared the documents necessary to extradite Warren Anderson.

In Keshub Mahindra v State of M.P., JT 1996 (8) SC 136, the charges against the nine Indian accused were reduced to one of rash and negligent act under Sec. 304-A, I.P.C., from an offence of culpable homicide not amounting to murder. This was because the accused had no direct knowledge that the factory if allowed to operate, would result in death of so many people. The court also recognized that that the trial of the criminal case against three foreign accused had to be “segregated and split up as they were absconding”. However, the CBI in 2002 filed an application before the CJM, Bhopal, for the dropping of the charge of culpable homicide against the former chairman of the UCC, Warren Anderson. It relied on the aforesaid judgment of the apex court. The dilution of charges against Anderson has been vehemently opposed by the various social action groups working for the Bhopal victims. (VII) “CLEAN-UP/SLOW-MOTION BHOPAL” CASE: US COURT The present case – a “class action suit” – was filed in the U.S. District Court by Haseena Bi, one of the survivors of the tragedy, and several organizations in Bhopal representing survivors, seeking damages and injunctive relief for the severe pollution of their land and the drinking water. They claimed that the pollutants for the plant continued to seep into the local environment causing serious health problems for hereby residents. Thus, there would be the possibility of another “Slow-motion Bhopal”, where thousands of people over several generations may be injured or even killed by the underground contamination spreading through the water supplied of the area. The U.S. District Court, however, rejected their claim. The matter came up before the Appeals Court. After nearly 20 years of struggle for justice and due compensation, the survivors for the 1984 Bhopal gas tragedy won a major legal victory against UCC, in the U.S. Court of Appeals for the Second Circuit, New York. On March 17,2004, setting a significant precedent in the history of environmental litigation, the court approved “injunctive environmental remediation” against UCC to clean up the pollution it caused in Bhopal. The term “injunctive environmental remediation” encompasses any work that has to be done to remove contamination or pollution from a given site in order to restore it to certain applicable environmental standards. While the U.S. District Court held that any grant of such equitable relief by the U.S. Courts for remediation affecting property located outside the U.S. would automatically and inevitably be inappropriate because it would interfere with or impugn a foreign sovereign’s interests. The Appeals Court said:

“Three may be circumstances in which it is appropriate for a court to grant injunctive relief with respect to the remediation of an environmental problem in a foreign country.” It may be noted that the Dow Chemical, which has inherited the UCC’s assets and liabilities in India was reluctant to own up responsibility for the clean-up. The M. P. and the Indian Government has asked to company to do so, but it refused. The Indian Supreme Court too has looked at the matter and asked that the international principle of “polluter pays” should be applied to the issue. CONCLUDING REMARKS Investigations following the Bhopal catastrophe showed that the responsibility of both the company and the government went for beyond the mere neglect of elementary safety measures. ‘Bhopal’, concluded a UN expert ‘was a catastrophe waiting to happen’. Further, the case in chief was never adjudicated on the merits, nor have the criminal charges, still pending in India, been effectively pursued by the Indian Government. Warren Anderson, till date, is a fugitive living in the United States, avoiding criminal prosecution in India. It is hard to understand why the CBI moves an application favoring Anderson when the latter is still a fugitive in the eyes of Indian law. In an article written just after the Bhopal settlement, the Supreme Court lawyer Prashant Bhusan said: “The government has capitulated to Union Carbide for reasons that have nothing to do with justice or the plight of the victims, and the court has allowed itself to be used for that purpose.” The doctrine of parens patriae i.e. role of State as sovereign and guardians of persons under legal disability has been, thus, negated by the Bhopal case. In an article “Union Carbide’s “Bhoposhima” and Indian Justice in Somno-Coma”, Justice V. R. Krishna Iyer called ‘Bhopal Tragedy’ a “mini-Hiroshima”. He criticized the Indian Judicial system as he noted: “Judicial engineering assumes credibility only if there is jurisdictional simplicity, procedural fairness and naturalness in the rules of evidence. Unfortunately, our court system more or less negates both. Inevitably, the reforms of these aspects of our legal system are imperative especially when we deal with category of victims of injustice which is overcome by insufferable tragedies and over-borne by economic, social and educational disabilities”.

THE PUBLIC LIABLITY INSURANCE ACT, 1991 AND ITS ANALYSIS BACKGROUND The growth of hazardous industries, processes and operations in India has been accompanied by the growing risks from accidents, not only to the workmen employed in such undertakings, but also innocent members of the public who may be in the vicinity. Such accidents lead to death and injury to human beings and other living beings and damage private and public properties. Very often, the majority of the people affected is from the economically weaker sections and suffer great hardships because of delayed relief and compensation. While workers/employees of hazardous installations are protected under separate laws, members of the public are not assured of any relief except through long legal processes. Industrial units seldom have the willingness to readily compensate the victims of accidents and the only remedy now available for the victims is to go through prolonged litigation in a court of law. Some units may not have the financial resources to provide even minimum relief. It is, therefore, essential to provide for “mandatory public liability insurance” for installations handling hazardous substances to provide minimum relief to the victims. Such insurance, apart from safeguarding the interests of the victims of accidents, would also provide cover and enable the industry to discharge its liability to settle large claims arising out of major accidents. If the objective of providing immediate relief is to be achieved, the mandatory public liability insurance should be on the principle of “no fault” liability as it is limited to only relief on a ‘limited’ or ‘fixed’ scale. The insurance companies were reluctant to provide for an ‘unlimited’ liability. The liability of them is limited to only relief in a ‘limited’ or ‘fixed’ scale. The maximum relief under the Act is Rs.25,000 per person for fatal accidents in addition to reimbursement for medical expenses, if any, incurred on the victim up to a maximum of Rs. 12,500. By 1992 amendment to the Act, the liability of insurer has been limited to the amount of premium (proportionate to the paid-up capital of the unit); in addition, a similar amount (as of premium) has to be given by the owner to an Environment Relief Fund {Public Liability Insurance Rules, 1991, Rule 11]. However the liability of the polluter (insured) is not limited. In other words, availability of immediate relief would not prevent the victims to go to courts for claiming larger compensation.

The Public Liability Insurance Act, 1991, thus, provide for mandatory insurance for the purpose of providing an immediate relief to the persons affected by accident occurring while handling any hazardous substance and for matters connected therewith or incidental thereto [Preamble to the Act].

The Act covers every industry, public or private, which handle hazardous substances. The Act is a “Special law”. It came into force on 1.4.1991. The Act was amended in 1992. The definitions of “accident”, “handling”, “hazardous substance” and “owner” are similar to as given in the Environment Tribunal Act, 1995. NO FAULT LIABILITY / APPLICATION FOR CLAIM FOR RELIEF. 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. In any claim for such relief, the claimant shall not be required to plead and establish that the death, injury, etc. was due to any wrongful act, neglect or default of any person (Sec. 3). Therefore the owner’s liability is ‘strict’. The claimant may claim for relief by way of an application under Sec. 6. An injured person (other than a workman) or his authorized agent; an owner of the (damaged) property or his authorized agent; the deceased’s legal representative or agent of such representative, may make an application for claim for relief to the Collector, within 5 years of the occurrence of the accident. The right to claim relief under Sec. 3 is in addition to any other right to claim compensation in respect of death, injury or damages under any other law for the time being in force. Under certain circumstances, the amount of relief paid under this Act shall be liable to deduction (Sec. 8). Owner’s duty to take out insurance policies (Sec.4) – Every owner, before he starts handling hazardous substance, must take out insurance policy and get it renewed within the period of its validity. Any owner who has been handling hazardous substance before 1-4-1991 (the date of commencement of this Act) is expressly required to take out insurance policy within one year from such commencement i.e. till 31-3-1992. The liability of the insurer under one insurance policy shall not exceed the amount specified in the terms of contract of insurance in that insurance policy. The Central Government may exempt any owner from taking out insurance, viz. the Central or State Government or any corporation owned or controlled by them, or any local authority. Provided that no such order shall be made in relation to such owner unless a fund has been established and is maintained by that owner.

DUTIES AND POWERS OF COLLECTOR

Where an accident has occurred at any place within his jurisdiction, it shall be the duty of the Collector to verify the occurrence of accident and invite applications under Sec. 6 by causing publicity (Sec.5). Sec. 7 specifies procedure for inquiry and disposal of an application made under Sec. 6, period for payment of amount, powers of the Collector while dealing with the application, mode of recovery of amount if in arrears, and the time for disposal for the claim for relief (i.e. 3 months). On receipt of an application, the Collector shall, after giving notice to the owner and after giving the parties an opportunity of being heard, hold an inquiry into claim(s) within three months of filing, and may make an award determining the amount of relief which appears to him to be just and specifying the person(s) to whom such amount of relief shall be paid. The collector shall have all the powers of a civil court, and he may follow a summary procedure. The insurer is required to deposit the amount of award within a period of 30 days of the date of announcement of the award. Where the insurer or owner fails to do so, such amount shall be recoverable from the owner/insurer as arrears of land revenue or of public demand. Where an owner is likely to remove/dispose of his property with a view to evade payment of amount, the Collector may, grant a temporary injunction to restrain such act. When the Collector makes an award under Sec. 7, the amount of relief shall be paid out of the “Environment Relief Fund” established and maintained under Sec. 7A. POWERS OF CENTRAL GOVERNMENT (i)

Power to call for information - The owner shall be bound to submit any information to be required by the person authorized by the Central Government for the purpose of ascertaining whether any requirements of this Act or of any rule/direction given under this Act have been complied with (Sec.9).

(ii)

Powers of entry and inspection - The Central Government may authorize any person to enter and inspect any place, premises or vehicles where hazardous substance is handled at all reasonable time and with necessary assistance (Sec.10).

(iii)

Power of search and seizure - A person who is authorized by the Central Government in this behalf, may enter into and search a place, premises or vehicle (other than railways); seize hazardous substance; require the owner not to remove or part with hazardous substance; dispose of the seized substance; and recover expenses incurred on doing so (Sec.11).

(iv)

Power to give directions - Any owner, or any person, officer, authority or agency, shall be bound to comply with such directions as may be issued (viz. prohibition or regulation of the handling of any hazardous substance) by the Central Government (Sec. 12).

(v)

Power to make application to Courts for restraining owner from handling hazardous substances (Sec. 13).

PENALTIES The Act provides for stiff penalties to the defaulting persons. Whoever contravenes the provisions of Sec. 4 or Sec. 12, shall be punishable with imprisonment (1-1/2 years to 6 years) or with fine of 1 lakh rupees, or with both. In the case of second default, he shall be punishable with imprisonment (2-7 years) and with fine of 1 lakh rupees (Sec. 14). These penalties are similar to that provided under the Environment, Water, and Air Acts. The benefit of probation may be given to a juvenile offender who has committed an offence under Secs. 4 or 12 of the Act. OVERRIDING EFFECT OF THE ACT Sec. 22 provides that the provisions of this Act and rules made there under shall have effect notwithstanding anything inconsistent therewith contained in any other law. SHORTCOMINGS OF THE PUBLIC LIABILITY INSURANCE ACT, 1991 The Public Liability Insurance Act, 1991, is a very useful Act for the weaker sections who have little capacity to secure compensation, as the industries do not often readily compensate the victims. The Act also encourages industrial growth. The very process of compulsory insurance will create a “safety consciousness” among the industries. Also, the industries are safeguard against unanticipated liabilities in the event of accidents, as prior insurance will enable them to face such situations. However, certain shortcomings have been noticed in the Act: (i)

The Act is limited to accidents arising out of handling hazardous substances. Accidents arising out of other equally perilous factors (viz. an accident by way of war or radioactivity) and from non-hazardous substances is not covered under the Act. Further, a ‘workman’ is not covered under the Act.

(ii)

The Act defines “hazardous substance” as “any substance or preparation which is defined as hazardous substance under the Environment Protection Act, 1986”. Thus, a dependent definition has been provided for in the Act.

(iii)

The exemption from ‘no-fault liability’ to Government or Governmentowned or controlled corporations or local authorities has been criticized as

it may lead to the dilution of the concept of mandatory insurance under the Act. Further, the discretionary powers of the Central Government may lead to arbitrariness. (iv)

The limitation period of five years to make a claim under the Act may not be sufficient, because sometimes the deleterious effects of hazardous substances could take a longer time to appear.

(v)

Under the Act, only an over-dose exposure to hazardous substances (exceeding such quantity as may be prescribed by notification by Central Government) attracts condemnation. The “routine” exposure and its deleterious effect on the health and property are ignored under the Act.

(vi)

The discretion given to the Collector to determine the award has been criticized.

(vii)

No scope has been provided for social action litigation and public participation in claiming the compensation. The Act intends to protect the innocent victims especially the weaker sections of the society but on the other hand it discourages the representative suit, class action and social action litigation.

(viii) The requirement of sixty days’ notice to the Central Government for filing a complaint under the Act is an unnecessary embargo keeping in view the inherent risk involved in handling hazardous substances. (ix)

As regards appeal, there are no provisions in the Act.

(x)

The amount of fine in case of non-compliance to the provisions of the Act is not much. The chances of non-compliance exist in all probability especially in cases where the amount of total compensation awarded exceeds Rs. one lakh. Moreover, no punishment has been prescribed to deal with the cases of non-compliance of liability to pay immediate relief under Sec.3.

(xi)

The Act provides for the constitution of an advisory committee (Sec.21) to formulate better package of insurance policy to ensure best of the benefits to victims. The committee is to consist of three representatives of Central Government, two representatives of owner and two experts of insurance or hazardous substances. It is suggested instead of two experts of insurance or hazardous substances, it should be two experts of insurance and hazardous substances. The voluntary agencies engaged in the health and environment protection should be given representation.

(xii)

The Central Government is empowered to delegate (Sec. 19) such of its powers and functions as it may deem necessary or expedient, to any person including any officer, authority or other agency, except the power to make rules under Sec. 23. The power to delegate is quite wide and even the power to give direction under Sec. 12 can be delegated.

(xiii) The Act should be brought under the purview of “polluter pays” principle to make the mandatory insurance scheme under the Act more vibrant. (xiv)

At present, there is a multiplicity of legal proceedings. The Act requires a victim to claim relief under this Act and then go to other forum for higher compensation which is not possible particularly in cases where the poor victim of the accident will be unable to claim relief under law of torts. It would be better if a quasi-judicial authority was created to decide the quantum of compensation, according to the “Deep-pocket Theory” of compensation established in Shriram Gas Leak Case. The National Environment Tribunal Act, 1995 makes an attempt to rectify the aforesaid effort.

LIST OF REFERENCES 1. THE ENVIRONMENT (PROTECTION) ACT, 1986 2. THE NATIONAL ENVIRONMENT TRIBUNAL ACT, 1995 3. THE PUBLIC LIABILITY INSURANCE ACT, 1991 4. THE NATIONAL ENVIRONMENT APPELLATE AUTHORITY ACT, 1997

5. A.P. POLLUTION CONTROL BOARD v. M.V. NAYUDU (AIR 1999 SC 812) 6. UNION CARBIDE CORPORATION v. UNION OF INDIA (AIR 1990 SC 273)