general legislations on environment

8/14/2019 GENERAL LEGISLATIONS ON ENVIRONMENT

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Index1. 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” . TheAct 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-relationshipwhich exists among and between water, air and land, and human beings, other livingcreatures, 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 modernconcept 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 urbanenvironmental ills like noise, traffic, slums and congestion are conspicuously absent fromthe Act and no provisions have been made for their control. Further, the Act focuses onenvironmental pollution and hazardous substance alone, as source of environmental



degradation. This focus ignores other causes of degradation such as deforestation andunrestrained 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 anyenvironmental modification which has undesirable short term or long term effect on thewelfare 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 theenvironment in quantities, detrimental to the environment, it forms an instance of

pollution.

Thus, the definition of ‘environment’ under the Environment (Protection) Act is notexhaustive but inclusive one. If the expression “includes and means” used in thedefinition, than it would become an exhaustive definition. However, a meeting of expertsrecommended that “an inclusive definition will have the distinct advantage for theexercise 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 torecourse 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 isauthorized to set new national standards for the quality of the environment as well asstandards for controlling emissions and effluent discharges; to regulate industriallocations; to prescribe procedure for managing hazardous substances to establishsafeguards for preventing accidents and to collect and disseminate information regardingenvironmental pollution.

Under Sec. 4, the Central Government has authority to appoint officers with suchdesignations 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 tostop 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 maydeem fit in order to regulate environmental pollution.



Other powers granted to the Central Government to ensure compliance with the Actinclude 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 tothose 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 preventingenvironmental 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 politicalconsiderations than by environmental ones. Thus, the task has to be entrusted to anindependent and expert agency created by statute.

VIOLATIONS AND PENALTIES UNDER THE ACT

The Act explicitly prohibits discharge of environmental pollutants in excess of prescribedregulatory standards (Sec.7).

Sec. 15 prescribes the penalties for offences under the Act – a prison term of up to 5 yearsor a fine of up to Rs. 1 lakh, or both. The Act imposed an additional fine of up toRs.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 7years imprisonment.

The critics say that these provisions have a tendency to protect the guilty rather than theenvironment. 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 thehook 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 wascommitted without his knowledge or that he has exercised all due diligence to prevent thecommission of the offence (Sec. 16&17).

Sec. 24 of the Act is a curious and controversial provision. This section postulates thatwhere 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 toauthorized government officials, may file a complaint with a court alleging an offenceunder the Act. However, the person must give notice of not less than 60 days of thealleged offence and the intent to file a complaint with the government official authorizedto make such complaints. The citizen’s suit provision appears to give the publicsignificant powers to enforce the Environment (Protection) Act. However, some criticsare of the view that during the 60 days notice period required for the government todecide whether to proceed against the alleged violation, the offending industry has timeto 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 tomake mandatory public reports concerning their pollutant emissions and discharges.



NATIONAL ENVIRONMENT APPELLATEAUTHORITY ACT, 1997 AND ITS ANALYSIS

BACKGROUND

On 30 th 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 theestablishment of a National Environment Appellate Authority (NEAA) to hear appealswith respect to restriction in areas in which any industries, operations or processes shallnot 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 theofficial gazette, establish a body to be known as the National Environment Appellate

Authority (hereinafter referred to as ‘Authority’). The Central Government has appointedthe Authority on 17/01/1998. Justice J.S. Verma, while inaugurating the NEAA stated thatits establishment was a very positive response of the executive, as it would bring desiredresult 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 withwhich 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 heardat 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 SupremeCourt, 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 theGovernment of India, and expertise or experience in administrative, legal, managerial or technical aspects of problems relating to environment. A person to be appointed as amember of the Authority should have the professional knowledge or practical experiencein the areas pertaining to conservation (Sec. 5).



Significantly, the appellate jurisdiction is limited only to cases where environmentalclearance 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 suggestedamendments 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 andfair 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 thanleave 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 aspectsconcern “life”, human rights concern “liberty”. In the context of emerging jurisprudencerelating to environmental matters, it is the duty of the Supreme Court to render justice bytaking all aspects into consideration. With a view to ensure that there is neither damageto the environment nor to the ecology and, at the same time ensuring sustainabledevelopment, 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 judicialand 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, theappellate authorities under the Water Act, 1974 and Air Act, 1981 or other rules, there isalways a judge of High Court and a scientist or group of scientists to help in theadjudication 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 idealsset by the Supreme Court.



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



THE NATIONAL ENVIRONMENTTRIBUANAL 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 suchname(s) as may be specified in such order, for the purpose of exercising and performingsuch powers and functions as may be specified as necessary to protect and improveenvironment. 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 todevelop 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 occurringwhile 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, propertyand the environment and for the matters connected therewith or incidental thereon.

The principle of ‘strict’ civil liability (absolute or no-fault liability) arising from theactivities involving hazardous substances has been highlighted in M.C. Mehta’s case(Shriram Gas Leak case): “An enterprise engaged in activities with potential threat tothe health and safety of the persons residing in the surrounding areas of the factory owesan absolute duty to the community to ensure that no harm is caused to any one onaccount 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 anincreasing 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 iscause while handling hazardous substances.



IMPORTANT DEFINITIONS

“Accident” means an accident involving a fortuitous or sudden or unintended occurrencewhile 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 ashazardous 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 asspecified 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 definedunder this Act are different from those provided in the corresponding sections of the

Environment (Protection) Act, 1986. Hence, the treatment, connotation or interpretationthereof 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 hazardoussubstance 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 acompany, any of its directors, managers, secretaries or other officers who is directly incharge 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 aworkman) or damage to any property or environment has resulted from an accident, theowner shall be liable to pay compensation. Clause (2) lays down that in any such claimfor 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 wrongfulact, neglect or default of any person.

Sec. 3(3) provides that if the death, injury or damage caused by an accident cannot beattributed to any individual activity but is the combined or resultant effect of several suchactivities, operation and processes, the tribunal may apportion the liability for



compensation amongst those responsible for such activities, operations and processes onan 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 trialthrough meaningful debate, public opinion, media spotlights and public pressures in anexpeditious and effective manner.

Sec. 4(1) provides that an application may be made by the injured person himself or incase of his death by his legal representatives; by the owner of the damaged property; byany 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 fieldof 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 Tribunalmay, after an inquiry, reject the application summarily. Where the Tribunal does notreject 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 maymake an award determining the amount of compensation which appears to be just andspecifying 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 aninterim order (injunction, stay, etc.) on an application unless copies of such applicationand of all documents in support of the plea for such interim order are furnished to thedefendant 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 issatisfied for reasons to be recorded in writing, that it is necessary to do so for preventingany loss or damage being caused to the applicant which cannot be adequatelycompensated 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 andauthority 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 knownas the principal bench) and at such other places as the Central Government may, bynotification, specify.

A person shall not be qualified for appointment as the Chairperson/Vice-chairpersonunless he is, or has been, a Judge of the High Court; or, has held the post of a Secretaryto 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 toanother. Sec. 21 provides that the case shall be decided according to the majorityopinion. Sec. 22 provides that the amount of compensation on account of damage toenvironment shall be credited to the Environment Relief Fund. Sec. 23 provides that anaward 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 theconsent 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 tocomply 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 inany 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 thelatter has precedence. It may be noted that Sec. 19 gives an ‘exclusive jurisdiction’ to theTribunal 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 thecompensation 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 tohazardous 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 speedydisposal 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 aright to claim for relief under both Acts.

Any claimant making an application under the Environment Tribunal Act may also makean 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 beenreceived 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, theowner, 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 bythe 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 accidentsresulting into damage to property, health and environment, effectively and speedily.

The Act incorporates civil and strict liability, and claim of compensation byenvironmental NGOs. However, the compensation under the Act should not be limited tocases 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 parentcompanies for the acts of their subsidiaries, the responsibilities of multinationalcorporations 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 alsoamendments in the existing Acts and a complete new legislation, The Environment (Protection) Act, 1986, was brought about as a realization of inadequacy of the existinglaws.

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 industrialaccident 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 beenmanufactured and stored in Union Carbide’s chemical plant in Bhopal, escaped into theatmosphere 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 anddiffuse 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 toensure 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 claimsarising from the Bhopal disaster. The entire amount had to be and was paid by March31, 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 noticeand 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 inthe 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 jurymight award, and its uncertainty about whether Union Carbide would submit to the

jurisdiction of an Indian Court . Further, American courts routinely impose strict liabilityfor accidents resulting from hazardous activities, and in such cases reject the notion thatthe 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 heldthat absence of a rule for class actions, which is identical to the American rules, does notlead to the conclusion that India is not alternative forum. The presence in India of theoverwhelming 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 interestfactors weigh heavily toward dismissal of this case on the ground of forum nonconvenience. Justice Keenan of the U.S. District Court observed:



“The Union of India is a world power in 1986, and its courts have the provencapacity 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 patriaerole 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), ithas to develop the thesis that the UCC was the mind and soul of the Bhopal plant and theUCIL 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 andenvironment 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’srole was deliberately reduced by India’s sovereign functions of regulations. Inneither case, is the UCC liable.

Second, either there exists, awaiting recognition, the principle of absolutemultinational liability or there is no such principle. If it so exists, it does notextend to the Bhopal case. If it does not, there is no case. In neither case, is theUCC liable.

Third, either MIC, in the present state of knowledge is not ‘ultra hazardous’ or if itis hazardous it is no more so than other chemicals that India stores in largequantities. 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 interimcompensation of Rs. 350 crores. This action had the effect of derailing the primarylawsuit against Carbide. It also raised questions of fair judicial procedure and the right toa trial on the merits before the issuance of a judgment. Carbide filed a revisionapplication against the interim payment decision.

(III) HIGH COURT’S JUDGMENT

Justice Seth used English rules of procedure to create an entitlement to interimcompensation (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 havebeen 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 isfinancially a viable corporation with $ 6.5 billion (Rs.8,815 crore) unencumbered assetsand $ 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 deathor 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, theSupreme 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 ascribeliability to Carbide, the settlement implicitly establishes the multinational’saccountability. Further, the Bhopal settlement is the first in a mass tort case where amultinational 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 aridiculously low figure. In the US $ 2.5 billion was paid by John Manville Corporationto 60,000 claimants for asbestos related injuries and $ 520 million by AH RobinsCompany 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 tounderstand 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 interimorder 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 thevictims 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 abroad and general estimate in the context of a settlement of the dispute and not on thebasis of an accurate assessment by adjudication. The question is how good or

reasonable it is as a settlement, which would avoid delays, uncertainties and assureimmediate payment.

In the process of arriving at the amount of compensation the court took into accountseveral 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 offersand counter-offers of parties, the estimate made by the High Court in fixing the interimcompensation on the basis of the Mehta principle, etc. In quantifying the compensationwhat 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 tortactions 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 theBhopal settlement. “The criticism of the Mehta principle, perhaps, ignores the emerging

postulates of tortuous liability whose principle focus is the social limits on economicadventurism”. Thus, the trend of the decision evidently rules out the possibility of adverse comment that by resorting to a compromise the Supreme Court lost anopportunity to apply the Mehta doctrine in Bhopal.

However, the Supreme Court seems to have deliberately missed an opportunity todevelop new principles in relation to Multinational Corporations operating withinherently dangerous technologies in the developing countries. As the court itself said, itwould have examined various dimensions of this problem like the protection of theenvironment, 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 thetragedy 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 fairnessand 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 categorizationof the victims was also upheld. It was laid down that “there is no need to tie down thetort-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 torepresent 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. Thelittle wrong is the denial of a fair opportunity (i.e. a notice and opportunity to be heard onany proposed settlement) to the victims.

The court outlined an action programme to avoid future Bhopals. The court inter aliacalled upon the Central Government to enact a law entitling future mass disaster victimsto interim relief and damages, and to somehow compel multinationals engaged inhazardous activities to submit to the jurisdiction of Indian courts for damage claims thatwould 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 bemade by the government and the industries. The Fund should be permanent in nature sothat 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 nineIndian 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 theaccused had no direct knowledge that the factory if allowed to operate, would result indeath of so many people. The court also recognized that that the trial of the criminal caseagainst three foreign accused had to be “segregated and split up as they wereabsconding”.

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 groupsworking 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 intothe local environment causing serious health problems for hereby residents. Thus, therewould be the possibility of another “Slow-motion Bhopal”, where thousands of peopleover 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 the1984 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 “injunctiveenvironmental remediation” against UCC to clean up the pollution it caused in Bhopal.

The term “injunctive environmental remediation” encompasses any work that has to bedone to remove contamination or pollution from a given site in order to restore it tocertain 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 automaticallyand inevitably be inappropriate because it would interfere with or impugn a foreignsovereign’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 andliabilities in India was reluctant to own up responsibility for the clean-up. The M. P. andthe Indian Government has asked to company to do so, but it refused. The IndianSupreme 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 boththe company and the government went for beyond the mere neglect of elementary safetymeasures. ‘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 tobe used for that purpose.”

The doctrine of parens patriae i.e. role of State as sovereign and guardians of personsunder 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 theIndian 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 whichis 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 beenaccompanied by the growing risks from accidents, not only to the workmen employed insuch 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 anddamage private and public properties. Very often, the majority of the people affected isfrom the economically weaker sections and suffer great hardships because of delayedrelief 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 readilycompensate the victims of accidents and the only remedy now available for the victims isto go through prolonged litigation in a court of law. Some units may not have thefinancial 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, wouldalso provide cover and enable the industry to discharge its liability to settle large claimsarising out of major accidents. If the objective of providing immediate relief is to beachieved, 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. Theliability of them is limited to only relief in a ‘limited’ or ‘fixed’ scale . The maximumrelief 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 theamount of premium (proportionate to the paid-up capital of the unit); in addition, asimilar 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 occurringwhile 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 in1992.

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 propertyhas resulted from an accident, the owner shall be liable to give such relief as is specifiedin the Schedule. In any claim for such relief, the claimant shall not be required to pleadand 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 suchrepresentative, may make an application for claim for relief to the Collector, within 5years of the occurrence of the accident.

The right to claim relief under Sec. 3 is in addition to any other right to claimcompensation 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 startshandling hazardous substance, must take out insurance policy and get it renewed withinthe period of its validity. Any owner who has been handling hazardous substance before1-4-1991 (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. Theliability of the insurer under one insurance policy shall not exceed the amount specifiedin the terms of contract of insurance in that insurance policy.

The Central Government may exempt any owner from taking out insurance, viz. theCentral or State Government or any corporation owned or controlled by them, or anylocal authority. Provided that no such order shall be made in relation to such owner unlessa 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 bycausing 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 theapplication, mode of recovery of amount if in arrears, and the time for disposal for theclaim 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) withinthree months of filing, and may make an award determining the amount of relief whichappears 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 asummary procedure.

The insurer is required to deposit the amount of award within a period of 30 days of thedate of announcement of the award. Where the insurer or owner fails to do so, suchamount 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 viewto evade payment of amount, the Collector may, grant a temporary injunction to restrainsuch 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 anyinformation to be required by the person authorized by the CentralGovernment for the purpose of ascertaining whether any requirements of this Act or of any rule/direction given under this Act have been compliedwith (Sec.9).

(ii) Powers of entry and inspection - The Central Government may authorizeany person to enter and inspect any place, premises or vehicles wherehazardous substance is handled at all reasonable time and with necessaryassistance (Sec.10).

(iii) Power of search and seizure - A person who is authorized by the CentralGovernment in this behalf, may enter into and search a place, premises or vehicle (other than railways); seize hazardous substance; require theowner not to remove or part with hazardous substance; dispose of theseized 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 handlinghazardous 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 6years) 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 haveeffect 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 sectionswho have little capacity to secure compensation, as the industries do not often readilycompensate 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 shortcomingshave been noticed in the Act:

(i) The Act is limited to accidents arising out of handling hazardoussubstances. Accidents arising out of other equally perilous factors (viz. anaccident by way of war or radioactivity) and from non-hazardoussubstances 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 preparationwhich 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 maylead 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 hazardoussubstances 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 itsdeleterious effect on the health and property are ignored under the Act.

(vi) The discretion given to the Collector to determine the award has beencriticized.

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

(viii) The requirement of sixty days’ notice to the Central Government for filinga complaint under the Act is an unnecessary embargo keeping in view theinherent 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 probabilityespecially in cases where the amount of total compensation awardedexceeds Rs. one lakh. Moreover, no punishment has been prescribed todeal 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) toformulate better package of insurance policy to ensure best of the benefitsto 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 insuranceor hazardous substances, it should be two experts of insurance andhazardous substances. The voluntary agencies engaged in the health andenvironment 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 eventhe power to give direction under Sec. 12 can be delegated.

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

(xiv) At present, there is a multiplicity of legal proceedings. The Act requires avictim 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. Itwould be better if a quasi-judicial authority was created to decide thequantum 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 aforesaideffort.



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)

general legislations on environment

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