The Supreme Court on Tuesday heard a public interest litigation challenging the constitutional validity of provisions of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025 (SHANTI Act), particularly those relating to caps on liability arising from nuclear accidents and the alleged exemption granted to suppliers of nuclear equipment from meaningful accountability.

The petition filed by former bureaucrat E.A.S. Sarma was argued by senior advocate Prashant Bhushan before a Bench comprising Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice Vipul M Pancholi. Mr Bhushan contended that the legislation jeopardises Article 21 rights by imposing an upper ceiling on liability despite the potentially catastrophic consequences of a nuclear accident. According to the petitioner, the combined liability of the operator and the government under the Act is capped at less than ₹4,000 crore, which is grossly inadequate in the event of a major nuclear disaster.

The Court observed that the matter substantially falls within the policy domain and noted that issues concerning national energy policy ordinarily involve legislative and executive choices. However, the Bench also raised concerns regarding the adequacy of compensatory mechanisms available to citizens in the event of a large-scale accident. During the hearing, the Court questioned what would happen if damages arising from a nuclear accident far exceeded the statutory cap prescribed under the legislation.

Mr Bhushan argued that while the earlier legal framework did not completely shield suppliers from liability, the SHANTI Act effectively absolves suppliers of nuclear equipment from accountability beyond the capped amount and places the burden primarily upon the operator and the State. He further submitted that limiting supplier liability could incentivise foreign companies to compromise on safety standards.

The petitioner also relied upon comparative international practices, contending that several countries either impose significantly higher liability caps or have reconsidered their dependence on nuclear energy altogether. It was argued that the liability cap in the United States is substantially higher than the cap prescribed under the Indian legislation.

Another aspect of the challenge related to the independence of the Atomic Energy Regulatory Board is proposed under the Act. Mr Bhushan argued that since appointments and removals would remain under governmental control and the search committee itself would be headed by the Atomic Energy Commission, the regulatory mechanism lacked institutional independence.

Justice Bagchi observed during the hearing that the case touches upon economic policy considerations and courts ordinarily do not second-guess legislative choices in such matters. Mr Bhushan, however, submitted that constitutional courts remain empowered to examine whether statutory provisions compromise public safety and fundamental rights.

The matter be listed in the second week of July for further consideration.