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

The Supreme Court on Monday posed a question to the government regarding the scope of fair and just compensation in nuclear accidents, as per the SHANTI Act. A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana issued a limited notice, further inquiring about potential conflicts of interest in the appointment of members to the regulatory body under the SHANTI Act.

The court was deliberating a petition filed by a coalition of petitioners, led by former bureaucrat EAS Sarma, which contended that the 2025 Act contravened fundamental rights enshrined in Articles 14, 19 and 21 of the Constitution. Advocates Prashant Bhushan and Neha Rathi, representing the petitioners, contended that the Act capped liability for any nuclear accident.

Chief Justice Kant expressed concern over the apprehensions surrounding the matter and emphasized that even if Parliament had capped the liability of operators, it did not preclude the court from bestowing fair and just compensation. He added that the bill was passed to incentivize projects and encourage investment. Bhushan argued that this was akin to permitting operators to compromise on safety measures.

The bench subsequently directed the Centre to clarify its stance on the appointment of members to the Atomic Energy Regulatory Body (AERB) under section 17 (4) of the SHANTI Act, based on a selection panel recommended by the Atomic Energy Commission. Bhushan contended that the Atomic Energy Commission, which oversees atomic power stations, could not recommend members to the regulatory body, raising concerns of a conflict of interest.

The SHANTI Act, which succeeded the Civil Liability for Nuclear Damage Act of 2010, permits private entities to establish civil nuclear power plants but absolves them from liability exceeding ₹3,000 crore in the event of any mishap at a nuclear power plant. On May 19, the top court acknowledged that the issues raised in the petition challenging various provisions of the SHANTI Act, 2025, pertain to economic policy.