Are courts precluded from granting fair, just compensation in nuclear accident: SC asks Centre

The Supreme Court on Monday asked the Centre to clarify whether courts can still grant fair and just compensation in the event of a nuclear accident despite the liability cap under the SHANTI Act, 2025.

A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana issued limited notice on the matter. It also sought the Centre’s response on a possible conflict of interest in the appointment of members to the Atomic Energy Regulatory Body (AERB).

Petitioners challenge key provisions of law

The court was hearing a plea filed by a group of petitioners, including professors and scientists, led by former bureaucrat EAS Sarma. The petitioners have challenged the 2025 law, arguing that it violates fundamental rights under Articles 14, 19 and 21 of the Constitution.

Appearing for the petitioners, advocates Prashant Bhushan and Neha Rathi said the legislation places a cap on the liability of operators in the event of a nuclear accident.

CJI Kant, however, said there was "too much apprehension" on the issue. He observed that even if Parliament had capped the liability of operators, it would not necessarily prevent courts from awarding fair and just compensation.

The Chief Justice also noted that Parliament had enacted the law to incentivise project proponents and attract investment.

Bhushan argued that such a framework could amount to allowing operators to cut corners on safety.

SC questions AERB appointment process

The bench also sought clarification from the Centre on the appointment of AERB members under Section 17(4) of the SHANTI Act.

Under the provision, members are recommended by a search and selection panel constituted by the Atomic Energy Commission. Bhushan argued that the arrangement raised a conflict of interest because the Atomic Energy Commission is responsible for running atomic power stations, while AERB functions as the regulatory body.

The court has asked the Centre to clarify its position on the issue.

What does the SHANTI Act provide?

The SHANTI Act replaced the Civil Liability for Nuclear Damage Act, 2010. It allows private companies to establish civil nuclear power plants while capping their liability at Rs 3,000 crore in the event of an accident.

On May 19, the Supreme Court had observed that the challenges to various provisions of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, involved issues touching upon "economic policy".