The one who spilled the oil pays. In India that means the shipowner and its insurer for a spill from a vessel, and the pipeline company, refinery, depot owner, transporter or factory for a spill on land. Liability does not depend on proving carelessness: Indian courts apply absolute liability to hazardous activities and the polluter pays principle, and the National Green Tribunal can award compensation without fault for accidents. What decides whether you actually get paid is how quickly you record the damage, which forum you choose and what you sign in the first few weeks.
This guide is for people who have lost something to spilled oil: fishermen whose nets and catch are ruined, farmers whose fields or wells have turned black, residents near a depot or pipeline, and the small hotels and boat owners who lose a season. It explains who is legally responsible, what you can claim, how to build the claim, and the mistakes that cost people money. It sits alongside our guides on thermal power, fly ash and industrial accidents and chemical leaks and industrial accident compensation.
If the oil is on the coast and fishing is the main loss, read this with our guide on port and marine pollution remedies for fishermen. If a toxic gas came with the spill, the guide on rights of residents after a gas leak covers the health side in more detail.
हिंदी में सारांश
तेल रिसाव (ऑयल स्पिल) का खर्च वही उठाता है जिसने तेल फैलाया: समुद्र में जहाज़ का मालिक और उसका बीमाकर्ता, ज़मीन पर पाइपलाइन कंपनी, रिफाइनरी, डिपो, टैंकर या फैक्ट्री। मछुआरे, किसान और प्रभावित निवासी मछली पकड़ने के नुकसान, फसल, कुएँ, नाव और जाल, इलाज और सफाई के खर्च का दावा कर सकते हैं। सबसे ज़रूरी है जल्दी सबूत जुटाना: तारीख वाली फोटो, पानी और मिट्टी के सैंपल, पुराने रिकॉर्ड और सरकारी सर्वे की कॉपी। कंपनी के किसी भी 'फुल एंड फाइनल' रसीद पर बिना समझे दस्तखत न करें। NGT में मुआवज़े का दावा पाँच साल के भीतर किया जा सकता है।
The essentials
The polluter pays
Liability falls on whoever controlled the oil, and fault does not have to be proved for hazardous activities.
Sea and land differ
Ship spills follow a special insurance and fund system; land spills are claimed from the operator directly.
Evidence goes fast
Oil spreads, evaporates and gets cleaned; photograph, sample and record within days, not months.
Read before signing
Early cash offers often carry a full and final release that wipes out later claims.
Claim together
A village, cooperative or fishermen's society carries more weight than a hundred scattered applications.
Watch the clock
NGT compensation must be sought within 5 years; ship convention claims have their own strict limits.
Who pays for an oil spill in India?
The person or company that had control of the oil pays, and it pays whether or not it was careless. Since the Supreme Court's decision in M.C. Mehta v Union of India (the Oleum gas case, 1987), an enterprise engaged in a hazardous activity has been absolutely liable for the harm it causes, with no defence of 'we took all care'. The polluter pays principle, applied in Indian Council for Enviro-Legal Action v Union of India (1996) and Vellore Citizens' Welfare Forum v Union of India (1996), adds that the polluter must pay both for the victims and for restoring the damaged environment.
On land, that usually means the pipeline operator, the refinery, the depot or terminal owner, the road tanker's owner, or the factory whose tank burst or whose used oil went into a drain. If a contractor caused the leak, for example by drilling through a buried pipeline, the operator is still the first target and can recover from its contractor later.
At sea, the system is different. A ship spilling oil cargo or bunker fuel triggers a regime based on international conventions that India has adopted through its merchant shipping law. The registered shipowner is strictly liable, it must carry insurance, and claimants can go directly against the insurer (usually a protection and indemnity club). For big tanker spills, where losses exceed the shipowner's limit, an international compensation fund financed by oil receivers pays the balance.
Different spills, different defendants
The type of spill decides who you claim from and where. This is the usual position; the facts of each case can change it.
| Type of spill | Usually liable | Where claims usually go |
|---|---|---|
| Tanker or cargo ship spill at sea or in port | Registered shipowner and its insurer; international fund for large tanker spills | Claims office set up by the insurer, admiralty jurisdiction of the High Court, NGT for restoration |
| Bunker fuel from any ship (cargo, fishing, passenger) | Shipowner and insurer | Insurer's claims process, admiralty suit to arrest the vessel |
| Offshore platform or subsea pipeline | Operator of the field or pipeline | Operator's claims process, NGT, civil court |
| Onshore pipeline leak through farmland | Pipeline company | Joint survey with revenue officials, Collector, NGT |
| Refinery, depot or storage tank failure | Owner and occupier of the facility | Collector (insurance relief), State Board, NGT |
| Road tanker accident | Tanker owner and its insurer, often the oil company too | Motor accident claims for injury; NGT or civil court for land and water damage |
| Factory or workshop draining used oil | Occupier of the unit | State Board complaint, NGT |
What losses can be claimed after an oil spill?
Start with what you can prove in rupees. Fishermen claim the catch they could not take during a fishing ban or while the water was oiled, damaged or destroyed nets, boat cleaning and engine repairs, and the loss of fish already stored. Farmers claim the standing crop, the next crop if the field cannot be sown, cleaning and reclamation of soil, and the cost of a new borewell or water supply if a well or handpump is contaminated. Households claim cleaning costs, damaged goods and medical bills.
Shore businesses such as homestays, beach shacks, boat operators and fish traders also lose money, but they must show the link to the spill rather than assume it. Under the ship convention regime, purely economic losses are paid only where the link is close, so a fish vendor on the oiled beach stands a better chance than a wholesaler three districts away.
The NGT's power under Section 15 of the NGT Act is wider than a damages suit. It can order relief and compensation to victims of pollution, restitution of damaged property, and restitution of the environment, meaning the polluter pays for cleaning the creek, restoring mangroves or treating contaminated soil. Restoration money does not go into your pocket, but it fixes the place you live in, and it is often what villages want most.
The laws that apply to oil spills
Section 15 lets the NGT award compensation, restore property and restore the environment, on an application made within 5 years of the cause of action first arising (plus up to 60 days for sufficient cause). Section 17 makes liability for accidents no-fault. Section 18 lets the injured person, the property owner, legal heirs, an agent, any aggrieved person including a representative body, the government or the Pollution Control Board apply.
An owner who handles hazardous substances covered by the Act must carry insurance and pay fixed relief, without proof of fault, for death, injury or property damage caused by an accident. Many petroleum facilities fall within it. The application goes to the District Collector, who can award relief quickly. The relief is interim and does not stop you claiming full compensation elsewhere. This Act is also in Schedule I of the NGT Act.
These let the State Board and the government inspect, take samples and issue closure or clean-up directions under Water Act s.33A, Air Act s.31A and EP Act s.5. Used and waste oil is hazardous waste under the Hazardous Waste Rules 2016, so dumping it is a separate violation.
India's merchant shipping legislation gives effect to the international conventions on civil liability for oil pollution and the compensation fund, with compulsory insurance and direct claims against insurers. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act 2017 lets coastal High Courts arrest a ship as security for maritime claims, including environmental damage. These rules have their own time limits, so check the current text.
How do fishermen claim after a ship spills oil?
After a large spill, the shipowner's insurer usually opens a local claims office or appoints surveyors, often with the Fisheries Department and the Collector gathering claims. This is the fastest route for routine losses. Surveyors look for boat registration, fishing licence, cooperative membership, landing centre sale records and auction slips showing what you normally earn.
Fishermen rarely keep accounts, and insurers know it. A cooperative society or group of boat owners can prepare one schedule of boats, nets, normal catch and days lost, backed by landing centre records and the Fisheries Department's catch data for previous seasons. That is much harder to cut down than scattered individual forms.
If the claims process stalls or the offers are unreasonably low, there are two legal levers. An admiralty suit in a coastal High Court can arrest the ship, or another ship of the same owner, as security, which brings the owner to the table quickly. And an application before the NGT bench for the coast can seek compensation and restoration, with the Coast Guard, the State Board and the shipowner as respondents. The NGT tends to appoint a committee to assess damage and order interim compensation, which helps when people cannot wait years.
Oil leaked from a pipeline into my field or well: what now?
Pipeline companies generally send an emergency team within hours and a compensation team within days. The usual practice is a joint survey of affected land with the revenue staff (patwari, lekhpal or village accountant), after which the company offers a sum per acre or per tree based on crop value. Insist on being present at the survey and get a signed copy of the survey sheet. Count your trees, borewells, pipes and boundary walls yourself and compare.
The visible crop is only part of the loss. Crude and diesel soak into soil and can reach shallow groundwater, so a handpump that looks fine today can start smelling of oil months later. Ask the State Board to collect soil and water samples from your field and well, and get a copy of the sample report. If the board is slow, a private sample from a recognised laboratory, collected in front of witnesses with photographs, is better than none. Our guide on proving groundwater contamination from industry explains what makes a sample stand up later.
For spills from depots, terminals and factories, inform the State Board first and the District Magistrate if people are affected. If the facility handles hazardous substances covered by the Public Liability Insurance Act, apply to the Collector for relief under that Act at the same time; it does not prevent a full claim.
How to claim compensation after an oil spill
Follow this order; steps 1 to 4 belong in the first two weeks.
Record the damage immediately
Take dated photographs and videos of the oil, the dead fish or crop, the boats and nets, and the source if visible. Note dates, times and the names of officials who visited.
Report it in writing
Send a written complaint to the State Pollution Control Board, the District Magistrate and, for spills at sea or on the coast, the Coast Guard and the Fisheries Department. Keep the diary number or email acknowledgement.
Get samples taken
Ask the board to sample water, soil or sediment and to give you the report. Use RTI if it does not, since a reply is due within 30 days.
Collect proof of normal income
Gather boat registration, fishing licence, landing slips, mandi receipts, khasra and khatauni entries, crop sale bills and previous years' records.
Organise as a group
Form a committee through the gram panchayat, cooperative society or RWA and prepare one schedule of losses with each person's documents attached.
File the first claim
Submit the schedule to the operator's or insurer's claims office and, where it applies, apply to the Collector for relief under the Public Liability Insurance Act. Get a receipt.
Respond to the offer with reasons
If the offer is low, reply in writing with the figures and documents you rely on. Do not sign a full and final release while contamination is still being assessed.
Escalate to the right forum
If the claim stalls, file an application before the NGT under Sections 15 and 17 within 5 years, or an admiralty suit for a ship spill, after taking advice on which suits the facts.
Documents and evidence that make an oil spill claim work
For fishermen and boat owners
- Boat registration and fishing licence
- Landing centre and auction records for past seasons
- Photos of oiled boats, nets and catch
- Repair and replacement bills for nets and engines
For farmers and households
- Khasra, khatauni or land record extract
- Joint survey sheet signed by revenue staff
- Crop sale bills and mandi receipts
- Water and soil sample reports
- Medical prescriptions and bills, if anyone fell ill
Official records to obtain
- State Board inspection and sample reports
- Coast Guard or port incident report, where available
- Collector's or SDM's damage assessment
- News reports and notices of any fishing ban
The NGT accepts photographs, lab reports and RTI replies, but how they are collected matters. Our guide on using photos, lab reports and RTI replies in the NGT covers the common weak points.
How is the compensation amount worked out?
There is no fixed rate card for oil spills. Crops are usually valued at expected yield times market price, plus soil restoration and any later season lost. Fishing losses are normal catch value over the days fishing stopped, taken from past landing records, plus damaged gear. Property is valued at repair or replacement cost.
Environmental restoration is assessed separately. When the NGT hears a spill case it typically forms a joint committee, often the CPCB, the State Board and the District Magistrate, sometimes with a fisheries or marine institute, to inspect the area and report on the damage and the cost of restoring it. Parties can file objections to that report, and the report often decides the outcome, so read it closely. Our guide on objecting to a joint committee report explains how.
When Advocate B.K. Singh assesses a spill claim, the first thing he looks at is whether the loss figures are tied to records that existed before the spill. A claim built on last year's landing slips or mandi bills is hard to argue with. A claim built on round numbers written after the event invites the operator to discount everything, and the tribunal can award costs against claims it finds exaggerated under Section 23 of the NGT Act.
A pipeline leak in paddy country
Here's a made-up example. A product pipeline running under farmland near a village develops a leak in October. By the time the company isolates it, diesel has spread across about 12 acres of paddy close to harvest, and two handpumps near the field begin to smell. The company's team arrives with the lekhpal, surveys the field, and offers each farmer a per-acre sum for the crop, with a receipt that says 'full and final settlement of all claims'.
Three farmers sign on the spot. The others, through the gram pradhan, write to the State Board and the DM, get the board to sample soil and both handpumps, and gather land records and last year's mandi receipts. The report shows petroleum hydrocarbons in the soil and one handpump, and the group sends a reasoned claim covering the crop, two seasons of reduced yield, soil reclamation and a new deep borewell.
When the company does not move beyond its first offer, the group files an application before the NGT under Sections 15 and 17, with the company, the State Board and the DM as respondents. A joint committee inspects and confirms soil contamination, and recommends remediation by the company under the board's supervision. The farmers who did not sign are in a far better position than those who did.
When is the NGT the right place for an oil spill claim, and when is it not?
The NGT suits spill cases where the environment itself is damaged and many people are affected: a creek, a coastline, farmland, groundwater. It can order restoration, appoint committees, order interim payments and supervise the clean-up. The application must be filed within 5 years of the cause of action first arising, with up to 60 more days if there was sufficient cause, and the court fee for a compensation claim is 1% of the amount claimed, subject to a minimum of ₹1,000. Most spill cases go to the bench covering the state, so see our page on filing an NGT case for how that works.
It is not the right forum for everything. A dispute with your own insurer over a crop or boat policy is a contract or consumer matter. Injury in a road tanker crash goes to the motor accident claims tribunal. A foreign ship that may leave Indian waters needs an admiralty arrest, which only certain High Courts can order.
Advocate B.K. Singh's usual advice to fishing cooperatives is to run the insurer's claims process and the legal remedy side by side rather than one after the other. Claims offices can take months and the time limits keep running. A well-documented NGT application filed within time does not stop a settlement, and it often makes one more realistic.
Checks before accepting any settlement offer
- Does the receipt say 'full and final' or waive future claims? If so, is the amount enough to cover everything you know about today and what may appear later?
- Has the soil, well or water been tested, and have you seen the report?
- Does the offer cover the next season, or only the crop or catch already lost?
- Are boats, nets, borewells, trees and structures counted separately from crop or catch?
- Is there a written breakdown of how the figure was calculated?
- Does the company accept responsibility for clean-up, separately from your payment?
- Have you kept copies of everything you submitted and received?
What a company should do after a spill
For an operator, the first 72 hours shape the liability. Contain the spill, inform the State Board and the District Magistrate in writing (and the Coast Guard or port authority at sea), and record what was done and when. Pass claims to the Public Liability Insurance policy rather than resisting them. Spilled product and oily soil are hazardous waste that must go only to authorised facilities with manifests; see our guide on used oil and chemical sludge disposal.
Underpaying quietly, asking villagers to sign wide releases and leaving contaminated soil for months are exactly the facts that turn a manageable claim into an NGT case with a large environmental compensation order. If a case has already been filed, see our guide on defending an NGT case filed against your industry.
Where to read next
If the spill came with a breach of a coal ash dyke rather than oil, the liability analysis is similar but the evidence differs; see ash pond breach liability and compensation. For help putting a value on pollution losses and pressing the claim, see our page on compensation for pollution damage.
Frequently Asked Questions
Who is responsible for an oil spill in India?
The person or company that controlled the oil: the shipowner for a vessel, and the pipeline company, refinery, depot owner, tanker owner or factory on land. Fault need not be proved for hazardous activities.
Can fishermen get compensation for an oil spill?
Yes. Fishermen can claim lost catch, damaged boats and nets, and related costs, usually through the shipowner's insurer or the operator, and through the NGT if claims are refused or underpaid.
How long do I have to claim oil spill compensation in the NGT?
An application for compensation under Section 15 of the NGT Act must be filed within 5 years of the cause of action first arising. The tribunal can allow up to 60 more days for sufficient cause.
Do I have to prove the company was negligent?
No. Indian law applies absolute liability to hazardous activities, and Section 17 of the NGT Act makes liability for accidents no-fault. You still have to prove the spill caused your loss.
What is the Public Liability Insurance Act relief?
It is quick, fixed relief paid through the District Collector for death, injury or property damage from an accident involving hazardous substances covered by the Act. It does not stop you claiming full compensation elsewhere.
Should I sign the company's compensation receipt?
Read it first. If it says 'full and final settlement', it may bar later claims, so do not sign while soil, water or catch damage is still unknown.
Can the NGT order the oil company to clean up?
Yes. Under Section 15 the NGT can order restitution of the environment, which means the polluter pays for cleaning and restoring land, water, coast or mangroves.
My well smells of diesel after a pipeline leak. What should I do?
Stop using it for drinking, ask the State Board in writing to sample it, and keep the report. Claim the cost of an alternative water source along with your other losses.
Can a foreign ship be held liable for a spill on the Indian coast?
Yes. Shipowners must carry insurance and can be claimed against directly, and coastal High Courts can arrest the ship as security for maritime claims.
Can a village file one case for everyone affected?
Yes. Section 18 of the NGT Act allows any aggrieved person, including a representative body or organisation, to apply, so a panchayat, society or group can file one application.
About the author
Advocate B.K. Singh, Founder & Principal Advocate, MCA, LL.B., LL.M.
Advocate B.K. Singh has practised for more than twenty years before the Supreme Court, the High Courts and the National Green Tribunal, and leads the environmental practice from offices in Dwarka (New Delhi) and Vaishali (Ghaziabad) with Advocate Sadhna Singh. Read his profile.
Lost crops, catch or water to an oil spill?
Send us the photographs, any survey sheet or settlement receipt and a short note of what happened on WhatsApp or by phone. We will tell you which route fits and what to collect next.
This page gives general information about environmental law as it stood when it was last reviewed. It is not legal advice on your case and does not promise any result. Laws, rules, fees and time limits change, so check the current position for your matter before acting.
Have a question about your own case?
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