The Supreme Court has raised critical questions about India's Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, passed in December. The court is examining whether constitutional courts are limited in awarding compensation for nuclear accidents under the Act and is seeking clarity on potential conflicts of interest regarding appointments to the Atomic Energy Regulatory Board (AERB). A group of scientists and former officials argue that the Act violates fundamental rights by capping the liability of nuclear plant operators, a move they contend contradicts the Supreme Court's own precedent on absolute and unlimited liability for hazardous industries. This legal challenge comes as India aims to expand its nuclear sector through private and foreign investment, with the SHANTI Act aiming to facilitate this growth by replacing the older Civil Liability for Nuclear Damage Act, 2010.

The Supreme Court has raised critical questions about India's Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, passed in December. The court is examining whether constitutional courts are limited in awarding compensation for nuclear accidents under the Act and is seeking clarity on potential conflicts of interest regarding appointments to the Atomic Energy Regulatory Board (AERB). A group of scientists and former officials argue that the Act violates fundamental rights by capping the liability of nuclear plant operators, a move they contend contradicts the Supreme Court's own precedent on absolute and unlimited liability for hazardous industries. This legal challenge comes as India aims to expand its nuclear sector through private and foreign investment, with the SHANTI Act aiming to facilitate this growth by replacing the older Civil Liability for Nuclear Damage Act, 2010.

The Supreme Court has raised critical questions about India's Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, passed in December. The court is examining whether constitutional courts are limited in awarding compensation for nuclear accidents under the Act and is seeking clarity on potential conflicts of interest regarding appointments to the Atomic Energy Regulatory Board (AERB). A group of scientists and former officials argue that the Act violates fundamental rights by capping the liability of nuclear plant operators, a move they contend contradicts the Supreme Court's own precedent on absolute and unlimited liability for hazardous industries. This legal challenge comes as India aims to expand its nuclear sector through private and foreign investment, with the SHANTI Act aiming to facilitate this growth by replacing the older Civil Liability for Nuclear Damage Act, 2010.

The Supreme Court has raised several pertinent questions regarding the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, which was passed by Parliament in December last year.

A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana sought an explanation from the Centre on whether constitutional courts are fettered in their power to award fair and just compensation in the event of a nuclear accident.

The court also sought clarity on Section 17(4) of the Act, which deals with the appointment of members to the Atomic Energy Regulatory Board (AERB). It asked whether the provision gives rise to any conflict of interest in the appointment of members to the regulatory body.

The court was hearing a petition filed by a group of scientists and professors, led by former bureaucrat E.A.S. Sarma, alleging that the Act violates fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution.

The main concern of the petitioners, represented by senior lawyers Prashant Bhushan and Neha Rathi, was that the new law caps liability in the event of a nuclear accident.

The SHANTI Act, which replaces the Civil Liability for Nuclear Damage Act, 2010, proposes a graded liability framework under which the liability of operators varies according to the type and characteristics of the nuclear installation. The legislation also establishes a dedicated Nuclear Damage Claims Commission to adjudicate cases involving severe nuclear damage and ensure the timely settlement of claims.

The Act also limits judicial intervention in matters covered by the law, although the framework governing these provisions is yet to be released.

Chief Justice Kant observed that there was considerable apprehension surrounding the law. He noted that even if Parliament has capped the liability of nuclear plant operators, it does not necessarily preclude courts from awarding fair and just compensation.

Bhushan argued that exempting nuclear plant suppliers from liability and capping the liability of operators violated the Supreme Court Constitution Bench’s principle of absolute and unlimited liability for hazardous industries. “In fact, the highest liability of the largest plant of the operator is only Rs 3,000 crore,” he told the court.

Bhushan argued that in the event of a nuclear accident, such as those at Chernobyl in Russia in 1986 or Fukushima in Japan in 2011, the damage could exceed the prescribed liability by more than a hundred times.

“The Constitution Bench of this court in the M.C. Mehta case (the 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,” the senior lawyer argued.

The SHANTI Act was passed as India seeks to expand its nuclear sector by opening it up to private investment and greater foreign collaboration. The new law allows private companies to build, own and operate nuclear power plants, besides undertaking certain fuel-cycle activities.

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