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The Supreme Court on Monday, August 17, 2026, sought responses from the Union Government and the Atomic Energy Regulatory Board (AERB) on limited issues arising from a constitutional challenge to provisions of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025.
A Bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana was hearing a public interest litigation challenging, among other things, the statutory limits on nuclear accident liability and the mechanism for appointing members of the nuclear regulator.
The hearing was focused particularly on whether the statutory liability limits could restrict constitutional courts from granting fair compensation and whether the regulatory framework provides sufficient independence to the AERB.
Background of the Case
The petitioners, represented by Advocate Prashant Bhushan, questioned provisions of the SHANTI Act that cap the liability of nuclear plant operators and the Union Government in the event of a nuclear incident.
According to the submissions, operator liability can extend up to ₹3,000 crore for the largest installations, while the Centre's residual liability is capped at ₹4,500 crore. The petitioners argued that the potential consequences of a major nuclear accident could be substantially higher.
Bhushan also challenged the removal of the operator's earlier statutory right to seek recourse against suppliers in certain circumstances. He relied on the Supreme Court's earlier ruling in M.C. Mehta v. Union of India, concerning absolute liability for hazardous industries, to contend that nuclear activities require a particularly stringent liability framework.
The petitioners also raised concerns over Section 17(4), which provides for appointment of AERB members on the recommendation of a search-cum-selection committee constituted by the Atomic Energy Commission.
Supreme Court's Observations
During the hearing, the Bench questioned whether statutory liability caps would prevent constitutional courts from determining appropriate compensation following a nuclear accident.
CJI Surya Kant observed,
“The Parliament imposes a cap, that does not bar the court. Irrespective of provision of the Act, nothing shall preclude a constitutional court to determine the amount of fair and just compensation.”
Bhushan submitted that a clear judicial clarification was necessary so that statutory limits would not be understood as restricting courts from determining liability according to the circumstances of an accident.
On the regulatory issue, Bhushan argued that the Atomic Energy Commission's involvement in the selection process could create a conflict because of its connection with nuclear power operations.
The Chief Justice also questioned whether replacing the existing arrangement with a committee dominated by bureaucratic officials would necessarily ensure the selection of technically qualified experts, observing,
“These are very highly sophisticated scientists.”
Decision
The Supreme Court issued notice to the Union of India and the AERB on the limited issues concerning the power of constitutional courts to determine fair and just compensation despite statutory liability caps, and the appointment mechanism under Section 17(4) of the SHANTI Act.
The Court did not decide the constitutional validity of the challenged provisions at this stage.
Case Details
Case Title: EAS Sarma and Ors. v. Union of India and Anr.
Case Number: W.P.(C) No. 240/2026
Judge: CJI Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana
Decision Date: August 17, 2026
