'Very sensitive issue': Supreme Court warns of Fukushima-like nuclear disaster, questions liability cap

The court cited the 2011 Fukushima disaster, arguing that damages from a major nuclear incident in India could run into hundreds of times that amount.

New Delhi: The Supreme Court on Tuesday described the capping of liability for nuclear accidents as a "very sensitive legislative policy issue" while hearing a petition challenging key provisions of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025.

A bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi observed that the matter involves broader questions of economic policy even as it expressed concern over the adequacy of compensation mechanisms in the event of a nuclear mishap.

"Our concern is that if an unfortunate event or any accident takes place and any person suffers an injury or damage, do we have a robust compensatory mechanism for that purpose," the bench remarked.

Senior advocate Prashant Bhushan, appearing for the petitioners, contended that the Act caps the total liability at an "absurdly low" Rs 3,000 crore, far below the scale of damage seen in past nuclear disasters.

He cited the 2011 Fukushima Daiichi accident in Japan, arguing that damages from a major nuclear incident in India could run into hundreds of times that amount.

Bhushan argued that while the government is free to pursue its policy objectives, it cannot do so at the cost of citizens' rights and safety.

He pointed out that the SHANTI Act, which replaced the Civil Liability for Nuclear Damage Act, 2010, allows private companies and foreign suppliers to operate nuclear plants but limits their liability and exempts suppliers from accountability.

The petitioners have also alleged that the new law dilutes the operator’s right of recourse against suppliers, potentially encouraging compromises on safety standards.

The bench, however, noted that nuclear technology often comes from foreign sources and questioned whether operators would participate without a capped liability regime.

It added that the State would step in to provide compensation in case of an accident and emphasised that the liability cap does not restrict the powers of courts or tribunals to award adequate compensation to victims.

"Nobody can curtail the power of even a tribunal when the tribunal wants to assess compensation and suitably award it to a person who is entitled," the bench observed.

The court also pointed out that most countries, whether developed or developing, rely on nuclear power for energy needs.

Bhushan countered by citing Japan and Germany, which have moved away from nuclear energy, and highlighted the much higher liability cap in the United States — around Rs 1.54 lakh crore.

The plea draws comparisons with major nuclear disasters such as Chernobyl (1986) and Fukushima, where damages far exceeded Rs 10 lakh crore, and argues that the Act violates the absolute liability principle laid down by the Supreme Court in the Oleum gas leak case.

During an earlier hearing, the bench had framed the core issue as a balance between "actual, visible and tangible national interest" and a "hypothetical loss".

After hearing arguments, the bench acknowledged that some of the petitioners’ apprehensions merit consideration and posted the matter for detailed hearing in July.