The Public Liability Insurance Act, 1991


ACT NO. 6 OF1991

[22nd January, 1991.]

An Act to provide for public liability insurance for the purpose of providing immediate relief to the persons affected by accident occurring while handling any hazardous substance and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Forty-first Year of The Republic of India as follows:—

  1. Short title and commencement.—(1) This Act may be called the Public Liability Insurance Act,1991.

(2) It shall come into force on such date1as the Central Government may, by notification, appoint.

  1. Definitions.—In this Act, unless the context otherwise requires,—

2[(a) “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 but does not include an accident by reason only of war or radio-activity;]

(b) “Collector” means the Collector having jurisdiction over the area in which the accident occurs;

(c) “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 substance;

(d) “hazardous substance” means any substance or preparation which is defined as hazardous substance under the Environment (Protection) Act, 1986 (29 of 1986), and exceeding such quantity asmay be specified, by notification, by the Central Government;

(e) “insurance” means insurance against liability under sub-section (1) of section 3;

(f) “notification” means a notification published in the official Gazette;

3[(g) “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 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 business of the company;]

(h) “prescribed” means prescribed by rules made under this Act;

4[(ha) “Relief Fund” means the Environmental Relief Fund established under section 7A];

(i) “rules” means rules made under this Act;

(j) “vehicle” means any mode of surface transport other than railways.

3.Liability to give relief in certain cases on principle of no fault.—(1) 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 for such death, injury or damage.

(2) In any claim for relief under sub-section (1) (hereinafter referred to in this Act as claim for relief),the claimant shall not be required to plead and 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.

Explanation.—For the purposes of this section,—

(i) “workman” has the meaning assigned to it in the Workmen’s Compensation Act, 1923

(8 of 1923);

(ii) “injury” includes permanent total or permanent partial disability or sickness resulting out of an accident.

  1. Duty of owner to take out insurance policies.—(1) Every owner shall take out, before he starts handling any hazardous substance, one or more insurance policies providing for contracts of insurance whereby he is insured against liability to give relief under sub-section (1) of section 3:

Provided that any owner handling any hazardous substance immediately before the commencement of this Act shall take out such insurance policy or policies as soon as may be and in any case within a period of one year from such commencement.

(2) Every owner shall get the insurance policy, referred to in sub-section (1), renewed from time to time before the expiry of the period of validity thereof so that the insurance policies may remain in force throughout the period during which such handling is continued.

1[(2A) No insurance policy taken out or renewed by an owner shall be for an amount less than the amount of the paid-up capital of the undertaking handling any hazardous substance and owned or controlled by that owner, and more than the amount, not exceeding fifty crore rupees, as may be prescribed.

Explanation.— For the purposes of this sub-section, “paid-up capital” means, in the case of an owner not being a company, the market value of all assets and stocks of the undertaking on the date of contract of insurance.

(2B) The liability of the insurer under one assurance policy shall not exceed the amount specified in the terms of the contract of insurance in that insurance policy.

(2C) Every owner shall also, together with the amount of premium, pay to the insurer, for being credited to the Relief Fund established under section 7A, such further amount, not exceeding the sum equivalent to the amount of premium, as may be prescribed.

(2D) The insurer shall remit to the authority specified in sub-section (3) of section 7A the amount received from the owner under sub-section (2C) for being credited to the Relief Fund in such manner and within such period as may be prescribed and where the insurer fails to so remit the amount, it shall be recoverable from insurer as arrears of land revenue or of public demand.]

(3)The Central Government may, by notification, exempt from the operation of sub-section (1) any owner, namely:—

(a) the Central Government;

(b) any State Government;

(c) any corporation owned or controlled by the Central Government or a State Government; or

(d) 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 in accordance with the rules made in this behalf for meeting any liability under sub-section (1) of section 3.

  1. Verification and publication of accident by Collector.—Whenever it comes to the notice of the Collector that an accident has occurred at any place within his jurisdiction, he shall verify the occurrence of such accident and cause publicity to be given in such manner as he deems fit for inviting applications under sub-section (1) of section 6.
  2. Application for claim for relief.—(1) An application for claim for relief may be made—

(a) by the person who has sustained the injury;

(b) by the owner of the property to which the damage has been caused;

(c) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or

(d) by any agent duly authorized by such person or owner of such property or all or any of the legal representatives of the deceased, as the case may be:

Provided that where all the legal representatives of the deceased have not joined in any such application for relief, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined shall be impleaded as respondents to the applicatio

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