Assignment – 5

Public Liability Insurance Act, 1991

SRI PRASAD. J
BC0160048

The act was enacted on January 22, 1991 which was importantly brought up as a result of the
Bhopal Gas Tragedy. The Public Liability Insurance Act of 1991 establishes compulsory liability
insurance. By law, companies must install and handle dangerous substances that are reported
under the Environmental Protection Act.

The growth of hazardous industries, processes and operations in India has been accompanied by
growing risks of accidents, not only to the workmen of such undertakings, but also members of
the public in the vicinity.

Therefore, under the Public Liability Insurance Act of 1991, before beginning to work with
hazardous materials, each owner must write one or more policies that cover the responsibility of
providing immediate relief on a given scale to those who suffer personal injury. or property
damage. , in the event of death, to the deceased's legal heirs.
The Public Liability Insurance Act of 1991 was enacted to provide immediate assistance to
persons affected by accidents while handling hazardous materials, as well as for other auxiliary
and related matters.

Speciality of this act is it ensures `No Fault Liability’ against the owners of hazardous
substances. In other words, it could be said that the owner of a hazardous substance must have
insured so that any person injured or died of any hazardous substance could claim compensation,
without  going into any question of fault  on the part of the owner.

People who can insure this is every owner of any hazardous property, before handling that
property, shall take one or more insurance policies providing contracts of insurance whereby he
is insured against the liability to give relief claimed by the person injured or suffered any loss
occurred due to that hazardous substance.

Under Public Liability Insurance Act , 1991 people who can apply for calm or relief
 a) The person who has sustained the injury,
b) The owner of the property to which the damage has been caused,

c) The legal representatives of the deceased, in case of death occurred as a result of the
accident and
d) The authorized agent of the above mentioned.

Application for relief: Under the Public Liability Insurance Law, the claimant files a claim for
damages to the creditor within 5 years after the accident, after notifying the owner and the
insurer and after listening to the parties, the compensation that the amount of reduction
determines. However, the victim is free to ask the court for further compensation.

Establishment of relief fund: Section 7A of the Law on Public Liability Insurance empowers the
central government to establish, by notification in the Official Journal, the Environmental Aid
Fund in favour of the payment of aid at a premium granted by the collector in accordance with
section 7 of this law.

Another speciality about this act is the provisions regarding the establishment of environmental
relief fund. According to this provision, the Central Government may establish a fund called as
Environmental Relief Fund which shall be utilised for paying and compensating the hazardous
damages. The central government can also make a scheme specifying the authority handling the
relief fund. An owner shall contribute to the Environmental Relief fund a sum equal to the
premium payable to the insurer and every contribution to the Environmental Relief Fund shall be
payable to the insurer, together with the amount of premium.

Power to call for Information, Entry and Inspection: The Liability Insurance Act deals with the
power to request information, access, inspection, search and seizure. The owner of the hazardous
installation is required to provide the information authorized by the central government that the
investigator reasonably needs to determine, any requirement, rule or instruction issued under this
Act must be compiled.

Power to give directions: Section 12 of the Public Liability Insurance Act of 1991 empowers the
central government to provide written instructions to any owner, officer or agency. The
instructions also contain the prohibition or the regulation of the handling of dangerous
substances. In addition, it can also regulate the supply or interruption of electricity.

Offences and Penalties: The Public Liability Insurance Act 1991 provides for the penalties of
non-compliance: Non-compliance of not taking an insurance policy.
Furthermore, failure to comply with any direction issued with regard to prohibition or regulation
of the handling of any hazardous substance or stoppage of supply of electricity, water etc.
Punishable with an imprisonment for a minimum period of one year and six months but which
may extend to six years, or with fine, which shall not be less than one lakh rupees or with both.
For subsequent offences, the person shall be punishable with the minimum imprisonment of two
years. However, it can extend to seven years, with fine of not less than 1 lakh rupees.

Cognizance of offence: No court shall take cognizance of any offence under this Act except on a
complaint made by,
(a) the Central Government or any authority or officer authorised* in this behalf by that
Government; or

(b) any person who has given notice of not less than sixty days in the manner prescribed, of the
alleged offence and of his intention to make a complaint, to the Central Government or the
authority or officer authorised as aforesaid.

Provisions as to other right to claim compensation for death, etc:

(1) The right to claim relief under sub-section (i) of section 3 in respect of death of, or injury to,
any person or damage to any property shall be in addition to any other right to claim
compensation in respect thereof under any other law for the time being in force.

(2) Notwithstanding anything contained in sub-section (i), where in respect of death of, or injury
to, any person or damage to any property, the owner, liable to give claim for relief, is also liable
to pay compensation under any other law, the amount of such compensation shall be reduced by
the amount of relief paid under this Act.

Power of search and seizure:

(1) If a person, authorised by the Central Government in this behalf, has reason to believe that
handling of any hazardous substance is taking place in any place, premises or vehicle, in
contravention of sub-section (i) of section 4, he may enter into and search such place, premises
or vehicle for such handling of hazardous substance.

(2) Where, as a result of any search under sub-section (i) any handling of hazardous substance
has been found in relation to which contravention of sub-section (i) of section 4 has taken place,
he may seize such hazardous substance and other things which, in his opinion, will be useful for,
or relevant to, any proceeding under this Act: Provided that where it is not practicable to seize
any such substance or thing, he may serve on the owner an order that the owner shall not remove,
part with or otherwise deal with, the hazardous substance and such other things except with the
previous permission of that person.

(3) He may, if he has reason to believe that it is expedient to do to prevent an accident dispose of
the hazardous substance seized under sub-section (ii) immediately in such manner as he may
deem fit.

(4) All expenses incurred by him in the disposal of hazardous substances under sub-section (iii)
shall be recoverable from the owner as arrears of land revenue or of public demand.

Effect of other laws: The provisions of this Act and any rules made thereunder shall have effect
notwithstanding anything inconsistent therewith contained in any other law.

Power to delegate: The Central Government may, by notification, delegate, subject to such
conditions and limitations as may be specified in the notification, such of its powers and
functions under this Act (except the power under section 23) as it may deem necessary or
expedient to any person (including any officer, authority or other agency).

Protection of action taken in good faith: No suit, prosecution or other legal proceeding shall lie
against the Government or the person, officer, authority or other agency in respect of anything
which is done or intended to be done in good faith in pursuance of this Act or the rules made or
orders or directions issued thereunder.