No-fault Principle in the Public Liability Insurance Act, 1991: Legislative History, Implementation and Present-day Relevance of Compensation Structure

The principle of no-fault liability is embodied in Section 3 of the Public Liability Insurance Act, 1991 (hereinafter referred to as “the Act”) and is further extended by Section 4 of the Act which imposes a duty upon the owner of industrial establishments handling hazardous substances to take out insurance policies. The Act was an answer to the disastrous Bhopal Gas Tragedy in 1984 and the soon after occurring Oleum Gas Leak in 1985. Since then, the courts have applied this principle to a plethora of cases to serve justice to the victims as well as the survivors. But the question arises that whether the meagre tune of relief provided in Schedule I of the Act is truly just to compensate for the sufferings of those who have lost their life and limb, as well as for their dependents? Keeping justice aside, is the compensation even enough keeping in view the soaring medical expenses today? This research paper investigates the legislative history of the Act, focusing on the principle of no-fault liability; mechanism for enforcement and implementation; compensation structure and its sufficiency or insufficiency