CJI Kant said there was too much apprehension and pointed out that even if Parliament has capped the liability of operators, it does not preclude the court from granting fair and just compensation.
New Delhi: The Supreme Court on Monday asked the Centre to clarify whether courts are precluded from granting fair and just compensation under the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act (SHANTI Ac) in case of a nuclear accident.
A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana said it was issuing limited notice and also asking the Centre to clarify whether there was any conflict of interest in appointing members to the regulatory body under the SHANTI Act.
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 Article 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, 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.
The bench asked the Centre to clarify its position on appointment of members of the Atomic Energy Regulatory Body (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.
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.
Petition challenging SHANTI Act
On May 19, the top court observed that the issues raised in the plea challenging various provisions of the SHANTI Act, 2025, touch on the “economic policy”.
The SHANTI Act, 2025, which was recently brought into force, has come under legal challenge over provisions that allow private sector and foreign companies to operate nuclear power plants while significantly limiting the liability of operators and completely exempting suppliers from liability.
A Public Interest Litigation (PIL) has challenged Sections 11, 12, 13, 14, 16, 17, 19, 39, 44, 67, 81 and 87 of the SHANTI Act, 2025, arguing that these provisions violate Articles 14, 19 and 21 of the Constitution of India. The petition also contends that the provisions are contrary to the Doctrine of Absolute Liability, the Polluter Pays Principle, the Doctrine of Public Trust, the principle of Inter-Generational Equity, Sustainable Development and the Precautionary Principle.
The petitioner argues that these principles have been recognised by the Supreme Court as integral to the Right to Life guaranteed under Article 21 of the Constitution.
The PIL points out that the repealed Civil Liability for Nuclear Damage Act, 2010, under Section 17(b), expressly provided an operator with a right of recourse against the supplier. In contrast, the SHANTI Act removes such recourse against suppliers.
The petition further contends that Section 13 caps the government’s residual liability at 300 million Special Drawing Rights, which it describes as “abysmally low” and inadequate to compensate victims for death, injury or property damage resulting from a nuclear accident.
The plea cites the Chernobyl disaster and the Fukushima Daiichi nuclear accident to highlight the potential scale of losses arising from nuclear incidents. It argues that the SHANTI Act caps the liability of even the largest nuclear plant operator in India at Rs 3,000 crore, or approximately $331 million, which is less than 0.1 per cent of the estimated damage caused by the Chernobyl and Fukushima disasters.
The petition also challenges the complete exemption granted to suppliers from liability. According to the petitioner, such an exemption could incentivise manufacturers and suppliers to compromise on safety standards in pursuit of higher profits, thereby increasing risks to the lives and livelihoods of people.
Relying on the Supreme Court’s judgment in M.C. Mehta v. Union of India (Shriram-Oleum Gas Leak case), the petitioner invokes the Doctrine of Absolute Liability. The judgment established that an enterprise engaged in a hazardous or inherently dangerous activity is absolutely liable to compensate for damage arising from such activity, irrespective of fault, negligence or the exercise of due care.
The petitioner argues that nuclear power generation is inherently hazardous and that the impugned provisions of the SHANTI Act are therefore inconsistent with these established principles of environmental jurisprudence.
The plea further submits that the Act seeks to accelerate the expansion of India’s nuclear energy sector by opening it up to private participation, thereby potentially reducing direct government control over nuclear facilities. Against this backdrop, it argues that weakening operator and supplier liability could undermine accountability and dilute safeguards intended to protect public health, safety and the environment.