The Author, Namrata Pal is a 2nd Year student of B.A.LL.B.(Hons) student at Dr Ram Manohar Lohiya National Law University, Lucknow
With the growing industrial development grows the risk and odds of industrial mishaps and last few decades have seen umpteen such accidents apparently claiming lives and polluting the environment . Government statistics show 54,000 workers killed or injured in factory accidents between 2014 and 2016 and are thought to only represent a fraction of all casualties.
Likewise in the Bhopal Gas Tragedy initial official figures indicated around 3000 deaths which now have been estimated as to be more than 15000. India witnessed three such unfortunate industrial accidents in a single day on 7th May, 2020 bringing up concerns regarding the health and safety of people being at stake and the extent to which these enterprises are liable in event of such industrial accidents.
Especially in Vizag Gas Leak accident NGT acted promptly in taking the suo moto cognizance of this accident and termed it as the one attracting ‘Strict Liability’, which was quite unlooked for as after the Oleum Gas Leak case ‘absolute liability’ rule was the settled law. The evolution of strict and absolute liability principles is reflective of the two eras of industrial advancement.
The doctrine of strict liability was devised in late nineteenth century in the landmark case of Ryland v Fletcher where Lord Chancellor Lord Cairns rested the liability for the escapade or nuisance on the fact that whether such incident occurred in course of natural or unnatural use of land.
Strict liability was thus ascribed to non- natural use of land accompanied by exceptions such as, the Plaintiff being at fault ,Vis Major or Act of God, Fault of third party and Consent of plaintiff. It was then in a way an absolute liability but with exceptions to it. Absolute Liability in its present form evolved in India in Oleum Gas Leak Case when India was at the peak of judicial activism along with outreach of Human Right activism constantly increasing. In this case CJ P.N. Bhagwati gave new interpretation to the rules of Strict liability and Absolute liability that was in consonance with the modern industrial and economic advancements.
Absolute Liability concerned only those enterprises which were involved in hazardous[as defined under Section 2(e) of Environment (Protection) Act, 1986] or inherently dangerous activities, implying that other industries not falling in the above ambit shall be covered under the rule of Strict liability. In words of CJ Bhagwati, ‘As new situations arise the law has to be evolved in order to meet the challenge of such new situations. Law cannot afford to remain static. We have to evolve new principles and lay down new norms which would adequately deal with the new problems which arise in a highly industrialised economy.’
As per absolute liability rule any industry or enterprise engaged in any hazardous activity that is inherently dangerous and poses as a threat to health and safety of workers or residents in its surrounding owes an absolute and non delegable duty to them to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. Also the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part.
This time it was sans exceptions with addition of duty to indemnify those affected by its actions, widening the scope of responsibility for the owners of industries involved in hazardous activities. Indemnifying the victims- PLIA, 1991 The Oleum Gas judgement provided for the enterprise to compensate the victims of accidents caused by hazardous activity regardless of the fact that whether such activity was carried out carefully or not. Nevertheless lack of competent legislation in regards to the indemnification of victims created lot of ambiguity and to address this issue The Public Liability Insurance Act, 1991 was passed by the Government.
It mandated the owners of all hazardous industries, to take insurance policy or policies providing for contracts of insurance whereby he/she is insured against liability to give relief to the victims in anticipation of any accidental hazardous activity. The face value of the insurance policy could be paid-up-capital for the unit or Rs 50 (fifty) Crore, whichever is less. This act provides for public liability insurance for the purpose of providing immediate relief to the persons affected by accident occurring while handling any hazardous substance.
Relief for such death, injury or damages caused is specified in the Schedule of the PLI Act which comprises-reimbursement of medical expenses incurred up to a maximum of Rs. 12,500 in each case and for fatal accidents the relief will be Rs. 25,000 per person in addition to reimbursement of medical expenses if any, incurred on the victim up to a maximum of Rs. 12,500.
At present the ministry of Environment Forest and Climate Change administers the operation of PLIA, 1991 and in order to further strengthen the implementation of the act it keeps issuing guidelines at times, which include State Pollution Control Boards(SPCBs)/Pollution Control Committees (PCCs) for UTs being directed to include PLI insurance policy as one of the point in the check list before according or renewing CTE(Consent to Establish) or CTO(Consent to Operate) to an industry. Analysing the NGT’s decision of holding LG Polymers India Ltd Strictly liability was completely unwarranted for.
The whole of PLI Act was framed and enacted on the premise of ‘absolute liability’, disregarding all the defences to evade liability and furthermore assuming the responsibility to indemnify the general public affected by its activities. Section 14 read along with Schedule I of NGT Act, 2010, provide for the jurisdiction of The National Green Tribunal over all the environmental matters and related Acts including the PLI Act and Section 15 refers to the compensation to the victims of pollution and environmental damages along with the victims of accidents occurred while handling any hazardous substances.
Since PLIA is no fault liability based Act and LG Polymers like all other industries has taken Insurance under this act as per the strict guidelines of Ministry of Environment Forest and Climate Change, it certainly will be peculiar to consider this as a strict liability matter. Strict Liability is generally accompanied by General defences using which the company in this case could evade this liability making these whole lot of Acts and Case laws pointless and we are back to square one. LG Polymers India Ltd. dealt with the chemical called Styrene, a hazardous substance [ under Rule 2(e) read with Entry 583 of Schedule I to the Manufacture, Storage and Import of Hazardous Chemical Rules, 1989] which caused death of 11 citizens, more than 100 being hospitalized, along with many animals and birds being reported death. This qualifies as an industrial disaster and its graveness shouldn’t be measured by the number of deaths caused as the company shall still be liable for even the least of harm caused to people and environment.
Moreover as per the order issued by NGT on 8th May, it has directed the company to deposit 50 Crore with the District Magistrate of Vishakhapatnam, which is same course of action that would have followed in an absolute liability case. Conclusively this accident is plainly an ‘absolute liability’ incident and the ‘strict liability’ mentioned in NGTs order either needs to be rectified or at least it owes a detailed explanation for using the term or for invoking ‘strict liability’ in this case, after so many years.
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