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
 • 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 non-
availability 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 Vice-
Chairperson 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 Vice-
chairpersons, 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 tort-
action.

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 re-
imbursement 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 Government-

owned 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)