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The Supreme Court today called on the Union of India to clarify that regardless of the provisions of the SHANTI Act, nothing would preclude constitutional courts from determining "fair and just" compensation amount if there is a nuclear accident.

A bench of CJI Surya Kant, Justice Joymalya Bagchi and Justice V Mohana passed the order seeking clarifications on two aspects - (i) any fetters on the power of constitutional courts to fix compensation, and (ii) Section 17(4) of the Act which deals with appointment of members to the Atomic Energy Regulatory Board (AERB).

Notice was issued to the Union of India and the AERB on these limited points.

The Court was dealing with a public interest litigation filed by EAS Sarma (and others) challenging the SHANTI Act for capping the liability of private nuclear operators and the Government for mishaps.

Advocate Prashant Bhushan appeared for the petitioners and voiced concerns about the cap on the liability of operators and exemption to nuclear power plant suppliers. He highlighted that the highest possible liability on the largest plant operator is only Rs.3000 crores. The counsel referred to major nuclear accidents like Chernobyl and Fukushima to contend that the actual cost of nuclear accidents goes into lakhs of crores, that is, 100 times the cap on the liability amount. 

Bhushan further raised an issue relating to the Atomic Energy Regulatory Commission, a regulatory body, itself running some of the power plants and being given regulatory role of those power plants. "This is in violation of the principles laid down about the independence of the regulatory body by all international conventions", he said.

Responding to an earlier query by the Court, as to what will happen if nuclear energy is not pursued by the country, Bhushan said that as per the government's own estimate, India's solar power potential is about 3,343 gigawatts - that too, when only 6% of wasteland is put to use. He claimed that the said number is 14 times the peak power demand (256 GW), the capital cost is 1/15th of the nuclear power cost, the solar power plants can be setup in 3 months and there's virtually no risk of hazard.

Bhushan also pointed out that under the Act, even the Union government's residual liability is capped at Rs.4500 crores, while the liability of the plant operator is capped at 3000 crores. 

In response, the CJI observed that the aforesaid does not mean constitutional courts are barred from granting appropriate compensation to victims. "Only because Parliament imposed a cap, it does not bar the courts", he said.

Bhushan agreed, but stressed that the Act is in violation of Constitution Bench decisions imposing strict and absolute liability on anybody running a hazardous industry. He further pointed out that in a plea challenging the liability cap under the Act which was repealed by the SHANTI Act, the Court had issued notice earlier. "If there is a nuclear accident in the country, questions will be raised. And if those accidents are on the account of corners cut by the plant operators, in the belief that their liability is capped at 100 crores to 3000 crores...it's a very very serious issue."

CJI then questioned the basis for the petitioners' apprehension, noting that that cap on the liability seemed to be an attempt at incentivization. "That is the problem. Because you are incentivizing them to cut corners!", Bhushan replied.

Subsequently, the Chief Justice re-emphasized that courts are not powerless to grant just compensation in appropriate cases. Bhushan however argued that if the Court were to hold that notwithstanding the provision, a court can fix the liability of the supplier, the operator and the government, it would signal to the operators and suppliers that they must not cut corners.

The counsel also emphasized the consequences of a nuclear disaster by highlighting that the sites of the Chornobyl and Fukushima disasters were rendered uninhabitable and continue to be so even after 15-30 years.

Bhushan further contended that if the cost of a nuclear disaster is left to be borne by the government, the fault of the supplier/operator gets shifted to the public. "We will clarify this aspect", CJI assured him. 

Insofar as the counsel's submissions on independence of the AERB, which highlighted that the conflict arising from members of AERB being appointed on the recommendation of a Committee formed by the Atomic Energy Commission (the body operating nuclear power plants), the CJI commented that the AEC is normally headed by a renowned scientist. He further noted that the heading of the Selection Committee by someone like a Cabinet Secretary may have its own implications. Bhushan replied that there are many renowned nuclear scientists and members of AEC should not exercise control over the selection panel for the Board.  

In the context of AEC operating nuclear power plants and AERC running some power plants itself, Bhushan also highlighted that the Bar Council of India is running a law college while it can't do so, being in charge of regulatory affairs. He said that a petition on this issue is in the process of filing. 

Case Title: EAS SARMA AND ORS. Versus UNION OF INDIA AND ANR., W.P.(C) No. 240/2026

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