The Supreme Court on Monday issued a limited notice to the Union government, seeking clarification on whether statutory liability limits under the newly enacted SHANTI Act prevent judicial bodies from awarding fair and just compensation to victims of a nuclear accident.
A three-judge bench led by Chief Justice Surya Kant, along with Justices Joymalya Bagchi and V. Mohana, also directed the Centre to address concerns regarding potential conflicts of interest in the appointment process for the nation’s atomic safety regulatory body.
The directions came during a hearing on a constitutional challenge to the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025. The petition, filed by a group of scientists, professors, and former bureaucrat E.A.S. Sarma, contends that the legislation violates fundamental rights guaranteed under Articles 14, 19, and 21 of the Constitution.
Liability Caps and Judicial Authority
Addressing arguments regarding financial limits, Chief Justice Kant observed that public apprehension surrounding the law appeared excessive. He noted that while Parliament enacted the legislation to attract investment and incentivize project developers by capping operator liability, such statutory limits do not necessarily preclude courts from awarding just and equitable compensation in the event of a nuclear emergency.
Representing the petitioners, advocate Prashant Bhushan, who appeared alongside advocate Neha Rathi, argued that capping financial liability effectively permits plant operators to compromise on safety standards.
Regulatory Independence Concerns
The court specifically requested the government to clarify the procedure outlined in Section 17(4) of the Act, which governs appointments to the Atomic Energy Regulatory Body (AERB). Under the provision, regulatory members are appointed based on recommendations from a search and selection panel established by the Atomic Energy Commission.
Bhushan submitted that because the Atomic Energy Commission is directly responsible for managing state-run nuclear power stations, allowing it to influence appointments to the regulatory authority creates an inherent conflict of interest.
Background of the Legislation
The SHANTI Act of 2025 replaced the Civil Liability for Nuclear Damage Act of 2010. The updated legislation opens the civil nuclear energy sector to private enterprises while limiting operator financial liability to Rs 3,000 crore in the event of an incident at a nuclear facility.
Earlier on May 19, the apex court had noted during preliminary proceedings that the legal challenges raised against various provisions of the SHANTI Act touch upon matters of national economic policy.
