'Parliament’s Liability Cap Does Not Bar Courts From Granting Fair Compensation To Nuclear Accident Victims': SC On SHANTI Act

The Supreme Court on Monday sought clarification from the Centre on whether the provisions of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, prevent constitutional courts from awarding fair and just compensation in the event of a nuclear accident.

A bench headed by Chief Justice of India Surya Kant and comprising Justices Joymalya Bagchi and V. Mohana issued limited notice to the Centre on the issue while hearing a petition challenging several provisions of the SHANTI Act. The court also sought a response on the mechanism for appointing members of the nuclear regulatory body under the legislation.

‘Too Much Apprehension’ Over Liability Provisions: SC

During the hearing, CJI Surya Kant observed that there appeared to be “too much apprehension” surrounding the liability provisions of the legislation.

The Chief Justice indicated that even if Parliament has imposed a statutory cap on the liability of nuclear operators to encourage investment and attract project proponents, that does not necessarily prevent constitutional courts from determining appropriate compensation for victims.

The court made it clear that the existence of a statutory liability ceiling does not, at this stage, appear to take away the constitutional courts’ power to consider claims for fair compensation.

What Is The SHANTI Act?

The SHANTI Act, enacted in 2025, replaced the Civil Liability for Nuclear Damage Act, 2010. Among other changes, the legislation permits private companies to participate in setting up and operating civil nuclear power plants.

The law also provides for limits on the liability of nuclear operators in the event of an accident. Reports have cited a maximum operator liability of around ₹3,000 crore, depending on the category and capacity of the installation.

The petitioners have challenged these provisions, arguing that the liability framework could undermine safety incentives and leave victims inadequately compensated in the event of a major nuclear disaster.

EAS Sarma-Led Plea Challenges Nuclear Liability Framework

The petition has been filed by former bureaucrat EAS Sarma and others, with advocate Prashant Bhushan appearing for the petitioners.

The petitioners have challenged several provisions of the SHANTI Act on constitutional grounds, alleging violations of Articles 14, 19 and 21 of the Constitution.

They have particularly raised concerns over the limits placed on operator liability, the treatment of supplier liability and the safeguards available to victims in the event of a nuclear accident.

The plea seeks, among other reliefs, a framework under which the entire cost of nuclear damage could be recovered from operators and suppliers in appropriate circumstances.

SC Questions Whether Liability Cap Limits Court’s Power

The central issue before the court is whether Parliament’s decision to cap statutory liability can restrict the power of constitutional courts to determine compensation based on the circumstances of an accident.

The bench indicated that the two concepts may operate separately: Parliament can prescribe a statutory liability framework, while courts may still retain constitutional powers to ensure that victims receive appropriate compensation.

The court has therefore sought the Union government’s formal clarification on the issue rather than ruling on the validity of the liability provisions at this stage.

Petitioners Raise Safety Concerns

Bhushan argued that a low liability ceiling could create an incentive for operators or suppliers to compromise on safety standards.

He pointed to the potentially enormous consequences of nuclear accidents and argued that the financial burden of a disaster should not ultimately be shifted to the public.

The petitioners have also questioned provisions concerning supplier liability and argued that the regulatory framework must ensure strong accountability and safety standards.

SC Seeks Clarification On Nuclear Regulator Appointments

Apart from compensation, the Supreme Court sought clarification on Section 17(4) of the SHANTI Act concerning the appointment of members of the Atomic Energy Regulatory Board (AERB).

The petitioners have alleged that the appointment mechanism could raise concerns over the independence of the nuclear regulator, particularly because the Atomic Energy Commission is involved in the selection process.

The bench has issued limited notice on this aspect as well and sought the Centre’s response.

The Supreme Court has not struck down or upheld the challenged provisions of the SHANTI Act. Monday’s proceedings were limited to seeking clarification from the Centre on specific aspects of the legislation.