As a ‘next step’ in the process of giving the principle of Absolute Liability a sound backing and reasoning in India, the Public Liability Insurance Act of 1991 was introduced. The object behind implementing such an act is that the rapid increase in the number of hazardous industries and operations in India has led to the incline in the risk of accidents, injuries, and damages, not only to the employees but also to the individuals and property located in the vicinity of such industries. This act, therefore, makes the situation of the affected persons better, by providing immediate relief in terms of insurance, to the workers and people affected and injured in the process of handling hazardous materials, either by themselves or industry or operation running nearby. The main purpose is to create a Public Insurance Fund to provide relief and immediate aid to people affected by such hazardous industries. The understanding of ‘Absolute Liability’ in this Act, is not clearly and explicitly stated therein, but has similar connotations under Sections 2(a) and 2(c) of the Act. 

This act was implemented as a pursuant to the dangers propagated by hazardous industries, the understanding of which came as an afterthought to the Bhopal Gas Tragedy, and the ruling given in the Oleum Gas Leak case of the Supreme Court. 

Essentials of absolute liability

The essentials of Absolute Liability are similar to the understanding of Strict Liability, in the sense that it too requires the preconditions of a dangerous thing, the escape of such dangerous things, and damage caused due to the escape of such dangerous things. However, as required under Strict Liability, the essential of ‘Non-natural use of land’ is not a prerequisite to the rule of Absolute Liability. Blackburn J stated in the Chamber hearing of Rylands v. Fletcher, the escape of a substance from any kind of its use would make the defendant liable, which was later changed to only the ‘non-natural use’ of the land by Lord Cairns while addressing Strict Liability in the House of Lords. In taking Blackburn J’s conception further, absolute liability too, does not differentiate on the use of the land as natural or non-natural, while determining its applicability. Therefore the essentials of Absolute Liability are as follows:

1. Dangerous Thing
2. Escape 
3. Hazardous or inherently dangerous substance: The major distinguishing factor in the essentials of Absolute Liability is the presence of a hazardous or inherently dangerous substance on the land. This means that if the defendant has a hazardous substance on his land, no matter what its use, such a defendant would be absolutely liable if such substance escapes his premises. The liability does not lie in the use of an object or thing, but in the nature of such an object or thing. Hazardous defined under Section 2 of the Public Liability Insurance Act 1991, is ‘any substance or preparation which is defined as hazardous substance under the environment (protection) Act, 1986 (29 of 1986), and exceeding such quantity as may be specified, by notification, by the Central Government’. This is the imperative distinguishing factor that validates the application of absolute liability.

Need for the principle of absolute liability

The rule of Strict Liability was introduced in Rylands v Fletcher as seen herein above. This rule in the case concerned has many exceptions, that the actual spectrum of the liability becomes very narrow. This old principle as brought out in 1868, may not suit all countries as well as it did then, due to the dynamic nature of technology and society. Though India did follow the laws of England since the pre-independence era, adjustments and amendments have been made to suit the country’s needs over time. Many rules and concepts which were not quite suitable in the Indian scenario, were modified to fit the criteria of Indian legislation. In the no-fault liability law, India followed the Strict Liability for itself, until it realized that this could not be properly applied to the Indian context. The major push came from the two incidents of the Bhopal Gas tragedy and the Oleum Gas Leak case, which instilled a realization of the need for a new principle for liability in India, to meet its industrial and economical requirements. 

Industrialization and Growth

The Strict Liability concept was applicable when India was not as technologically adept as it is seen to be today. The prerequisites and essentials of Strict Liability just do not cover all the bases that it can to protect people that are harmed due to dangerous items. Therefore to meet the new era of industries and thereby even more dangerous substances and hazardous activities, a new norm was to be followed to pin responsibility on such industries. 

Agriculture

In India, agriculture is a common and widespread area of employment. As a result, the storing of large amounts of water on one’s land becomes quite normal and escapes the ambit of ‘non-natural use’ of land, as was established in Rylands v Fletcher. In other parts of the country as well, there may be the use of certain things and execution of certain activities that may come under the umbrella term of ‘non-natural use of land’ in other countries, but not in the densely populated and developing country such as India. Thus, India required a principle that could cater to its own needs, and not a duplicate of the laws made in England. 

Social Responsibility

he major party targeted in applying the Absolute Liability rule are industries and operations that use or manufacture hazardous or inherently dangerous substances in its premises. These industries were not present earlier and therefore the Strict Liability rule could be used on a general basis. These industries now utilize the country’s resources and additionally also pose a risk to the citizens. This Absolute Liability rule makes it compulsory for industries to take responsibility for their damages completely and non negotiable so that the health and well being of the citizens and society are given priority. 

Object and reasons

The Act has been enacted according to its opening statement to’ provide for public liability insurance for the purpose of providing relief to the persons affected by accident occurring while handling any hazardous substance connected there with or incident altogether’.In the background of the principle so the Oleum Gas Leak case,discussed earlier and the Bhopal litigation, the Act was passed to consolidate the law relating to enterprise liability particularly in relation to hazardous activity. It seeks to provide relief to the members of the general public who become the victims of industrial accidents. In effect, the Act is also an answer to reflection so of the Supreme Court in Charan Lai Sahu’s case,where a call had been made to enact such a legislation.

Powers and Penalties under the Act

Extensive powers have been conferred on the central government for the purpose of giving effect to provisions of PLIA. This includes authorizing any person to call for any information for ascertaining as to whether the requirements of PLIA have been fulfilled; the power of entry and inspection, search and seizure of premises or vehicle where the hazardous substances are being handled. The central government is also given the powers to make directions for the purposes of PLIA and to make an application to a court of law for restraining an owner from handling hazardous substances in contravention of the provisions of PLIA. A criminal sentence of up to six years, with a minimum mandatory sentence of one and a half years is prescribed for persons who do not take out insurance policies under section 4 and fail to adhere to directions under section 12 of the Act, with a fine of a minimum of a lakh of rupees.There is also a penalty for obstructing the carrying on off unctions under sections 10 and II.The principles of corporate criminal liability are also recognized in the Act, by stipulating that companies can also be proceeded against for offences. There is also the possibility for the heads of government departments to be proceeded against for committing an offence.