NEW DELHI: This is a “very sensitive legislative policy issue,” the Supreme Court said on Tuesday while hearing a petition challenging provisions of the 2025 Act that caps liability at $Rs 3,000 crore in case of any mishap at a nuclear power plant.
A bench of Chief Justice of India Surya Kant and Justices Joymalia Bagchi and Vipul M Pancholi observed that the issues raised in the petition challenging various provisions of the Nuclear Energy and Sustainable Development to Transform India Act 2025, touch on “economic policy”.
“Our concern is that if an unfortunate event or any accident happens and anyone suffers injury or damage, do we have a robust compensation mechanism for this,” the bench said during the hearing.
Advocate Prashant Bhushan, who represents the petitioners in court, said there were three main issues, including determining the aggregate liability cap.
“If a nuclear accident occurs, the resulting damage will be hundreds of times higher,” Bhushan said, referring to the Fukushima Daiichi nuclear power plant accident that occurred in Japan in 2011.
He said that the government can do whatever it wants through politics, but it cannot sacrifice the rights of citizens.
“This is a very sensitive political and legislative issue,” the council said.
She also noted that the technology had to come from outside, and wondered that if a ceiling of responsibility was not set, who would come to work here.
She said the state would also be compensated in case of any such mishap.
The court noted that setting a ceiling on liability does not conflict with the court’s authority to determine the compensation that will be awarded to the victim of any such accident.
“No one can limit the power of the court when it wants to evaluate compensation and award it appropriately to the deserving person,” she said.
Bhushan said that the cost of setting up a nuclear power plant is much higher than the cost of setting up a solar power plant.
“I am not asking the court to interfere in any government policy. But this policy cannot sacrifice the safety of citizens,” he said, claiming that some provisions of the law are unconstitutional.
“You are telling us that there is one country, whether developed or developing, that does not produce energy through nuclear power plants,” the bench said.
Bhushan said countries like Japan and Germany have stopped energy production through nuclear power plants and have no cap on liability.
He added that in the United States, the maximum is $1.54 lakh crore, which is more than 100 times the maximum imposed in India.
Bhushan claimed that the law encourages foreign suppliers to reduce safety requirements.
The court said it would hear the matter in detail.
“Some of your concerns may require attention. We will try to clarify those concerns,” she said as the matter was taken up for hearing in July.
While hearing the petition on February 27, the court said that the main dispute raised was between an actual, apparent and tangible national interest versus an unfortunate hypothetical loss.
Bhushan then argued that the law, which replaced the Civil Liability for Nuclear Damages Act of 2010, allows private companies to set up civilian nuclear power plants but exempts them from liability beyond that. $3000 Crores.
He had said that in the event of nuclear accidents, the loss would be more than that $10 lakh crore, as was the case in the 1986 Chernobyl nuclear power plant accident and the 2011 Fukushima nuclear power plant accident.
Bhushan said the law conflicts with the principle of absolute liability for hazardous industries established by the Supreme Court in the oleum gas leak case in 1987.
“The Shanti Act, 2025, which came into force recently, while allowing the private sector and foreign companies to operate nuclear power plants in India, has also set the liability of such operators at an absurdly low level and absolved the supplier of any liability,” the petition says.
It also says that the repealed Nuclear Damage Civil Liability Act of 2010 expressly provided for the operator’s right of recourse against the supplier.
The public interest litigation petition notes that cases such as the Chernobyl nuclear disaster, which occurred in the former Soviet Union, resulted in significant damage to life and property.
He also cites the example of the Fukushima Daiichi Nuclear Power Plant accident which caused massive social and economic impacts on lives and livelihoods.
“By contrast, the Shanti Act 2025 limits the liability of India’s largest terminal operator to mere $The appeal says: “3000 crores”.
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