The latest incident of Vizag gas leak has received a lot of public attention due to the increasing cases of industrial accidents and the limited liability of the companies for the same. The calamity has shown us how legislations in our country are outdated, therefore more supportive of the capitalists. It also reminds us of the lack of effective legislation to control industrial accidents and a proper mechanism of providing relief to the victims. The leak has invited the application of The Public Liability Insurance Act, 1991[1] (hereinafter referred to as “The Act”) which aims at providing immediate relief to the victims of the accident, but the legislation suffers certain shortcomings which have been discussed further.


The Act was formed after the incident of Bhopal Gas Tragedy[2], to ensure quick and immediate relief to the victims out of such industrial accidents. The insurance protects the policyholder from claims that are made by third parties caused by the mishandling of hazardous substances in a factory. It contains 23 sections and the Schedule which provides the amounts for compensation on the occurrence of an accident. The burden of compensation lies upon the insurance company for the victims other than the workmen of the company. There exists a cap of Rs. 50 crore for the insurance policy despite the size of the factory.


The act aims at providing immediate relief to the third parties that are affected by any accident due to the company handling hazardous substances. “The act makes it mandatory for every owner to take our insurance policies before handling any hazardous substances for coverage against any liability that may arise of an accident or incident involving these substances”[3]. It ensures the “No-fault liability” of the owner so that the victim can claim compensation without establishing the fault of the company. The limitation period for the same is five years which proves to be beneficial especially during this period when a pandemic is controlling all our activities. The act does not provide any guidelines for the compensation of workmen as there are separate rules for them under the Workmen Compensation Act.


No amendment has been made to the schedule which contains the maximum amount to be provided as per Section 3(1) of the act “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”[4]. The same amount of compensation is being used for the last 29 years. Medical expense is allowed up to Rs. 12,500 for each case, in cases of fatal accidents Rs. 25,000 would be provided along with medical expenses if any of Rs. 12,500. In case of loss of wages due to temporary disability, a monthly relief of 1000 would be provided for a maximum period of three months. Further, Rs. 6,000 would be provided for the damage caused to private property. All of these amounts are trivial in 2020 and adds to the financial problems faced by the victim and his/her family. Even as per insurance experts “The policy value limits stipulated in the act are very low and need upward revision”[5].


The Visakhapatnam Gas Leak occurred on 7th May 2020 from the LG Polymers Company which was resuming its functioning after abiding by the lockdown. The factory was situated in R.R. Venkatapuram village, which falls on the outskirts of Visakhapatnam. Styrene gas leaked out of the factory thus causing 11 people[6] to lose their lives and hundreds of them were affected. A lot of people have compared it with the Bhopal Gas Tragedy, the aftermath of which is still being seen in the pandemic where a huge number of deaths due to COVID-19 have been of survivors of Bhopal Gas Tragedy.

The incident has caused a lot of irreparable damages to the surroundings and has changed the lives of hundreds of people. People were having burning sensations in their eyes and breathing troubles as the effect of the same had spread around a radius of 3 km[7].  The flora and fauna of the city have been highly compromised with and various pollutions such as land, air, and water pollution have also been caused by the leak. The National Green Tribunal on taking up the matter has considered a much “diluted principle of liability i.e. Strict Liability and not an absolute liability”[8].

The Andhra Pradesh High Court had also ordered to seal the premises of LG Polymers, from where the catastrophe occurred. The assets as well as money haven’t been allowed to be shifted as well. According to the high power committee which was set up for investigating the matters, “the leakage occurred due to human error”[9]. This should therefore invoke the principle of absolute liability and not a strict liability as the act has been due to human negligence.


The Act provides minimal compensation only. On death and permanent disability a small number of only Rs. 25,000 is provided apart from the medical expenses of Rs. 12,500. The amount provided has been the same for three decades and has never been revised. In 2020, such an amount is not enough to financially support someone, moreover, the maximum amount on the compensation reliefs the company from any extra compensation to the victims, which leaves them in a miserable state.


According to the act, the “Any One Accident Limit (AOA) should not exceed Rs. 5 Crores”[10]. The company LG Polymers, a South Korean Subsidiary, which is responsible for the Vizag gas leak case, was insured by the New India Assurance Company under the Public Liability Insurance Policy as prescribed in the act. The company has 2 policies of Rs. 5 Crores each; one of them for AOA and the other is a PLI policy, which reveals the fact that the insurance cover of Rs. 10 Crores is only available to LG polymer through the insurance company, to pay the victims of the accident. This establishes how inadequate the existing legislature is, which provides only a trivial amount for compensation.

The fact that the act provides a meager amount of compensation and has not been revised ever since its formulation shows how the existing laws are not compatible and this is why people have to explore other judicial remedies to claim the necessary compensation, despite the atrocities they have been facing due to the accident.


According to experts, the medical expense alone can run into much higher amounts than the paltry compensation which would be provided through the act. For compensation above the specified amount, the victims have the right to sue the company, which if ordered by the courts would have to be paid by the company. Another problem that arises is that the Indian Judiciary is not completely functioning due to the restrictions imposed keeping in mind the ongoing pandemic. The legal procedure to claim additional compensation would take a long time, such as in the Bhopal Gas Tragedy, where a “curative petition”[11] has been filed in the apex court, and is still pending.

Furthermore, the National Green Tribunal (NGT) took up a Suo Moto cognizance of the case under Section 14 and Section15 of the National Green Tribunal Act[12] and had directed the company to deposit an initial amount of Rs. 50 Crores to the district to compensate the victims, but “a bench led by U.U. Lalit has stayed this tribunal order for the next 10 days”.[13] This shows the delay caused in ensuring justice to the victims. The legal remedies in itself are time-consuming and therefore some people prefer not to move to the judicial setup of our country.


Better legislation should come into force where the responsibility lies wholly on the company and there should be adequate compensation provided to the victims of the gas leak. Gas leaks not only affect the present generation but also affect the future generation as we can see in the case of Bhopal Gas Tragedy. Furthermore, stricter policies should be implemented and the industries should comply with every procedure and rule to rule out the possibility of such accidents in the future.

Through this case the judiciary should try enabling the “polluters pay principle”[14] i.e. to restore the environment and human damage caused by the company. Proper legislation should also be made in the legislature which can be used by the judiciary to enable every victim to get his rights. The amount provided in this act should be multiplied to help one out of the abysmal state due to the accident. Legislations should not allow the company owners to get away from their responsibilities, just by taking up insurance policies for the company under the act. If the compensation amount goes higher than the company should have to take up the responsibility and compensate everyone in a fair and just manner.


In view of the recent event of the Vizag Gas leak and the minimal compensation available and provided under the Public Liability Insurance Act, India needs to step up its legislative framework. Though the act aims at providing instant relief for the damages caused, the amount provided is inadequate. The amounts have not been revised since the formation of the act 29 years ago and therefore, leave the victims in a dreadful position. The cap amount for the relief is also set up at Rs. 50 Crores only, irrespective of the size of a unit, this supports the capitalist regime at the cost of the victims of such incidents. Therefore, to ensure justice in a true sense to the victims of such accidents, the act should revise its amount from time to time to suit the dynamic world. It is high time now that the policymakers start considering the welfare of its citizens rather than enforcing a statutory regime which favors the industrialist


[1] The Public Liability Insurance Act, 1991, Act No. 6, Acts of Parliament, 1991.

[2] Union Carbide Corporation v. Union of India, 1992 AIR 248.

[3] Vikram Raghavan, Public Liability Insurance Act: Breaking New Ground for Indian Environmental Law, 39(1) Journal of the Indian Law Institute (1997).

[4] Sec. 3(1), The Public Liability Insurance Act, 1991, Act No. 6, Acts of Parliament, 1991.

[5] Vizag gas leak brings back focus on Public Liability Insurance, Outlook, (May 7, 2020, 3:43 P.M.)

[6] Vishakhapatnam Gas Leak Updates, The Hindu, (May 7, 2020, 22:30 P.M.)

[7] India Gas Leak: At least 11 people dead after Visakhapatnam Incident, BBC News, (May 7, 2020)

[8] Amit Anand Trivedi, Vizag Gas Leak: India must overhaul its compensatory regime, Hindustan Times, (May 15, 2020, 17:13 P.M.)

[9] Chitranjan Kumar, Vizag gas leak: AP HC orders seizure of LG polymers’ premises; bars directors from leaving India, Business Today, (May 24, 2020, 22:36 P.M.)

[10] State Bank of India General,  Public Liability Insurance Policy, (last visited on May 7, 2020)

[11] Supreme Court adjourns hearing of curative plea in Bhopal gas case, The Hindu, (Jan. 29, 2020, 00:57 A.M.)

[12], 2010, Act No. 19, Acts of Parliament, 2010.

[13] SC stays green tribunal’s orders in Vizag gas leak case, The Hindu (June 15, 2020, 22:47 P.M.)

[14]What is Polluter pay principle?,  The London School of Economics and Political Science, (May 11, 2018)’polluter%20pays’%20principle%20is,human%20health%20or%20the%20environment.&text=This%20principle%20underpins%20most%20of,affecting%20land%2C%20water%20and%20air.


DISCLAIMER: The views and opinions expressed are that of the authors and do not necessarily reflect that of

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