The Supreme Court of India on Tuesday weighed in on a critical constitutional challenge to the country’s newly enacted nuclear energy law, questioning whether a robust safety net exists to protect citizens in the event of a catastrophic disaster.
A three-judge bench, led by Chief Justice of India Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi, acknowledged the high-stakes nature of the dispute, terming the legal challenge a “very sensitive legislative policy issue” that directly intersects with India’s broader economic strategy.
At the heart of the debate is the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025. The law caps the maximum financial liability of a plant operator at ₹3,000 crore in the event of an accident—a threshold that critics argue is dangerously inadequate.
“Our concern is that if an unfortunate event or any accident takes place and any person suffers an injury or damage, do we have a robust compensatory mechanism for that purpose,” the bench observed during the high-profile hearing.
Representing the petitioners, prominent advocate Prashant Bhushan raised three fundamental contentions against the SHANTI Act, focusing heavily on the capped liability limit. Bhushan argued that while the government possesses the authority to draft economic and energy policies, it cannot do so by sacrificing the constitutional rights and safety of its citizens.
To put the current cap into perspective, Bhushan drew parallels to major historical disasters:
- The Chernobyl Disaster (1986) & Fukushima Daiichi Accident (2011): Bhushan pointed out that real-world nuclear disasters have historically caused damages exceeding ₹10 lakh crore—vastly eclipsing India’s proposed ₹3,000 crore safety ceiling.
- International Standards: In the United States, the liability cap stands at ₹1.54 lakh crore, which is more than $100$ times the limit set by India. Meanwhile, nations like Germany and Japan have completely halted nuclear energy production and operate with no liability caps at all.
Bhushan further contended that the SHANTI Act, 2025, which recently replaced the Civil Liability for Nuclear Damage Act of 2010, strips away vital protections. Under the repealed 2010 framework, operators maintained an express “right of recourse” to hold foreign suppliers financially accountable. The new Act, however, permits private and foreign companies to operate civil nuclear plants while exempting suppliers from liability and capping operator exposure.
This exemption, the petitioner argued, could incentivize foreign suppliers to “cut corners on safety” and directly violates the landmark “absolute-liability principle” established by the Supreme Court in the 1987 Oleum gas leak case. Additionally, Bhushan noted that the capital required to build nuclear infrastructure far exceeds the cost of setting up solar power alternatives.
The Supreme Court bench, while receptive to safety concerns, emphasized the practical complexities of global energy policy and foreign investment.
The justices noted that because nuclear technology must be imported, placing unlimited liability on foreign entities could deter international partners entirely. “If the liability is not capped, then who will come to operate here?” the bench observed, adding that the State would step in to compensate victims should an unfortunate incident occur.
Furthermore, the bench clarified that a legislative cap on liability does not diminish judicial authority to protect victims.
“Nobody can curtail the power of even a tribunal when the tribunal wants to assess compensation and suitably award it to a person who is entitled,” the court remarked.
When Bhushan pointed out that countries like Japan and Germany have moved away from nuclear energy, the bench challenged him to name other global powers following suit, asking, “You tell us a single nation, whether developed or developing, who is not having production of power through nuclear power plants.”
This week’s deliberations follow an earlier hearing on February 27, where the court characterized the core conflict as a choice between “an actual, visible and tangible national interest versus an unfortunate hypothetical loss.”
However, acknowledging that the petitioners have raised valid points regarding safety and accountability, the bench indicated it is willing to examine the constitutional validity of the law in greater detail.
“Some of your apprehensions may require attention. We will try to clarify those apprehensions,” the court concluded.
The Supreme Court has posted the matter for its next detailed hearing in July, where the future of India’s civil nuclear framework and its safety protocols will be heavily scrutinized.
