Author: Akhil Ganatra, LLM (Corporate and Business Laws) at Gujarat National Law University, Gandhinagar
The Public Liability Insurance Act, 1991, designed to facilitate the efficient and expeditious implementation of the principle of no-fault liability, has revealed significant shortcomings in its compensation structure. Several crucial issues underscore the need for urgent amendments. Firstly, the ambiguity surrounding the term “hazardous substances” creates confusion, with the judiciary asserting that Central Government notice is unnecessary for categorizing materials as hazardous. Secondly, the Act’s limitation to accidents involving the transportation of hazardous materials by road, excluding railroads, raises questions about its comprehensiveness. The exclusion leaves potential victims without recourse, as the reasoning behind this restriction remains uncertain. Addressing this limitation is essential for ensuring the Act’s efficacy and fairness. Thirdly, the Act’s primary objective is compromised by the stringent five-year time limit for seeking relief. A more flexible approach to the time limit is imperative to accommodate the varied and often delayed consequences of hazardous incidents. Lastly, the Act’s outdated compensation structure, established almost three decades ago, fails to consider inflation and escalating medical costs. The calculation method for compensation is deemed unjust, necessitating a revision. Drawing inspiration from the Motor Vehicles Act, a more comprehensive and fair approach to determining compensation, considering various factors beyond injury severity, is recommended. Overall, a comprehensive reevaluation and amendment of the Public Liability Insurance Act, 1991, are imperative to address these critical deficiencies and enhance its effectiveness in providing just compensation for victims of hazardous incidents.