New Delhi, Aug 17: The Supreme Court on Monday asked the Centre to clarify whether courts are precluded from granting fair and just compensation under the SHANTI Act in case of a nuclear accident.
A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana said it needs a clarification on two aspects: whether there are any fetters on the power of constitutional courts to fix fair and just compensation, and on Section 17(4) of the Act, which deals with the appointment of members to the Atomic Energy Regulatory Board (AERB).
It said the government should clarify whether there was any conflict of interest in appointing members to the regulatory body under the SHANTI (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India) Act.
Court seeks Centre's clarification
The top court was hearing a plea filed by a group of petitioners, including professors and scientists, led by former bureaucrat EAS Sarma. It submitted that the 2025 Act violated fundamental rights under Articles 14, 19 and 21 of the Constitution.
Advocates Prashant Bhushan and Neha Rathi, appearing for the group, said the law caps the liability in case of any accident.
CJI Kant said there was too much apprehension and pointed out that even if Parliament has capped the liability of operators of nuclear plants, it does not preclude the court from granting fair and just compensation.
He said Parliament has passed the bill to incentivise the project proponent and bring investment.
Bhushan submitted that it was like allowing operators to cut corners on safety.
Concerns over regulatory body
The bench asked the Centre to clarify its position on the appointment of members of the Atomic Energy Regulatory Board (AERB) under Section 17(4) of the SHANTI Act on the recommendation of the search and selection panel constituted by the Atomic Energy Commission.
Bhushan said the Atomic Energy Commission is responsible for running atomic power stations in the country and it cannot recommend members to the regulatory body, which is a conflict of interest.
He submitted that exempting nuclear plant suppliers from liability and capping operators' liability violates the Supreme Court's Constitution Bench principle of absolute and unlimited liability for hazardous industries.
"This is a challenge to some provisions of the SHANTI Act, which is an Act that has been brought primarily to exempt the nuclear power plant suppliers from liability, and to cap the liability of the operators also to a very low level. In fact, the highest liability of the largest plant of the operator is only Rs 3,000 crore," he told the bench, adding that the cost of a nuclear accident, in case there is one, like in Chernobyl, Russia, in 1986 or Fukushima, Japan, in 2011, the damage was in excess of more than a hundred times the liability.
Arguments on liability limits
"The Constitution Bench of this court in the MC Mehta case (Oleum gas leak case of 1987) had very clearly laid down this principle that if somebody operates a hazardous industry, then if there is an accident from that industry, the person who runs that industry will have absolute and unlimited liability. So that's a strict and absolute liability," he submitted.
He said there are manifold problems – one is of the suppliers, the other is of nuclear power plant operators and the third is of the regulatory body.
He submitted that the Atomic Energy Commission is itself running some of the nuclear power plants and under the new law it has been given a significant role in appointing members to the regulatory body.
This is in violation of the principles laid down about the independence of the regulator, which has to be an autonomous body, by all international conventions, Bhushan said, adding that the law was in violation of the apex court's decision of a five-judge bench.
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Challenge to SHANTI Act provisions
He highlighted that the liability imposed upon the operator of a nuclear installation is subject to an abysmally low statutory cap, while suppliers of equipment, manufacturers etc responsible for defects or deficiencies are exempted from any liability under the existing statutory framework.
The SHANTI Act, which replaced the Civil Liability for Nuclear Liability Act of 2010, permits private companies to set up civil nuclear power plants but exempts them from liability beyond Rs 3,000 crore in the event of any unfortunate incident at a nuclear power plant.
On May 19, the top court observed that the issues raised in the plea challenging various provisions of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, touch upon "economic policy".
The plea by Sarma said, "The SHANTI Act, 2025, brought into force recently, while allowing private sector and foreign companies to operate nuclear power plants in India, has also capped the liability of these operators at an absurdly low level and exempted the supplier from any liability." It further says that the repealed Civil Liability for Nuclear Damage Act, 2010, had expressly provided for the operator's right of recourse against the supplier.
The public interest litigation (PIL) plea points out that instances like the Chernobyl nuclear disaster, which occurred in the erstwhile Soviet Union, led to enormous damage to life and property.
"In contrast to this, the SHANTI Act, 2025, caps the liability of the largest plant operator in India at a mere Rs 3,000 crores (i.e., approximately USD 331 million, amounting to less than 0.1 per cent of the cost of damage caused by the accidents at Chernobyl or Fukushima)," the plea said.
(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
