SHANTI Act: Are courts barred from awarding fair compensation for nuclear accidents?
SHANTI Act: Can Courts Award Fair Nuclear Compensation?
Indiadailyupdate.com – The SHANTI Act has placed India's nuclear liability regime under direct judicial scrutiny. A three-judge Supreme Court bench led by Chief Justice Surya Kant, with Justices Joymalya Bagchi and V. Mohana, has asked the Centre to clarify whether constitutional courts retain the power to grant equitable compensation in the event of a nuclear accident. The questions emerged while the Court heard a petition challenging the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, passed by Parliament in December of the preceding year.
Petitioners and Their Constitutional Challenge
Former bureaucrat E.A.S. Sarma spearheaded a group of scientists and professors who filed the petition. Senior advocates Prashant Bhushan and Neha Rathi briefed the Court on behalf of the petitioners, arguing that the SHANTI Act violates fundamental rights guaranteed under Articles 14, 19, and 21 of the Constitution. The central grievance targets the statute's mechanism for capping financial liability flowing from nuclear incidents.
How the SHANTI Act Restructures Nuclear Liability
The new legislation replaces the Civil Liability for Nuclear Damage Act, 2010, and introduces a tiered liability framework in which an operator's financial exposure varies according to the nature and characteristics of the nuclear facility. It also establishes a dedicated Nuclear Damage Claims Commission charged with adjudicating disputes over severe nuclear damage and accelerating claim resolution. Judicial intervention within the Act's ambit is restricted, although the detailed procedural rules governing those restrictions have yet to be notified.
The bench further sought clarification on Section 17(4), which deals with the appointment of members to the Atomic Energy Regulatory Board (AERB). The Court wished to understand whether that provision engenders any conflict of interest in the selection of regulators.
Court's Remarks and Counsel's Submissions
Chief Justice Kant observed that considerable anxiety accompanies the new statute. He noted that even if Parliament has imposed a ceiling on operator liability, that does not automatically divest courts of the authority to deliver just and fair compensation to affected persons.
Bhushan argued that insulating nuclear-plant suppliers from liability while simultaneously capping operator exposure contradicts the principle of absolute and unlimited liability for hazardous industries established by the Supreme Court's Constitution Bench. He underscored the practical inadequacy of the cap:
"In fact, the highest liability of the largest plant of the operator is only Rs 3,000 crore."
He further contended that following a catastrophe on the scale of the 1986 Chernobyl disaster in Russia or the 2011 Fukushima meltdown in Japan, actual damage could exceed the statutory ceiling by a factor of more than one hundred. Citing the landmark M.C. Mehta judgment from the 1987 Oleum gas leak case, he emphasised:
"The Constitution Bench of this court in the M.C. Mehta case (the Oleum gas leak case of 198
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