Supreme Court Examines Constitutional Challenge to Proposed Nuclear Liability Reform Framework

Introduction

The Supreme Court of India is currently examining a public interest petition challenging the constitutional validity of certain provisions contained in a proposed legislative framework for nuclear liability reform, informally referred to as the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) framework. The petition has been filed under Article 32 of the Constitution of India alleging violations of fundamental rights guaranteed under Articles 14, 19, and 21.

The challenge raises significant questions at the intersection of energy policy, environmental jurisprudence, and constitutional law, particularly concerning the extent to which statutory limits on nuclear liability are compatible with established principles governing hazardous industries. The matter was recently mentioned before a Bench of the Supreme Court, which acknowledged the sensitivity of the issues involved and indicated that the constitutional questions raised would require detailed consideration.

The case has the potential to shape India’s evolving approach to nuclear energy regulation, liability allocation, and transparency obligations in the context of expanding clean energy capacity.

Background: Nuclear Liability Framework in India

India’s current nuclear liability regime is governed by the Civil Liability for Nuclear Damage Act, 2010, which establishes a statutory framework for compensation in the event of a nuclear incident.

Under the Act:

• The operator of a nuclear installation bears primary liability, capped at ₹1,500 crore.
• The Central Government assumes additional liability, subject to an overall limit aligned with approximately 300 million Special Drawing Rights (SDR) in accordance with international compensation conventions.
• The legislation also recognises a limited right of recourse against suppliers, including in circumstances involving defective equipment or services.

The proposed reform framework seeks to modify aspects of this regime in order to facilitate greater participation by private and foreign entities in India’s nuclear energy sector, while maintaining a structured compensation system for nuclear incidents.

Constitutional Concerns Raised in the Petition

The petitioners argue that the proposed liability framework significantly dilutes safeguards contained in the existing statutory regime by introducing lower effective liability exposure for nuclear operators and suppliers. According to the petition, the proposed limits on operator liability are inadequate when compared with the potential economic and environmental consequences of a large-scale nuclear accident.

To support this contention, the petition references historical nuclear disasters such as those at Chernobyl and Fukushima, where the overall economic impact has been estimated in the hundreds of billions of dollars. The petitioners argue that statutory liability caps could result in compensation that is disproportionately small relative to the potential scale of damage arising from a nuclear incident.

A key constitutional argument advanced in the petition relies on the Supreme Court’s decision in M.C. Mehta v. Union of India (Oleum Gas Leak Case), which established the doctrine of absolute liability for enterprises engaged in hazardous or inherently dangerous activities. The petitioners contend that nuclear power generation falls squarely within this category and that statutory limits on liability may therefore be inconsistent with principles governing hazardous industries.

Environmental Principles and Article 21 Jurisprudence

The petition further argues that the proposed framework undermines several environmental law principles that have been recognised by Indian courts as part of the constitutional right to life under Article 21. These include the polluter pays principle, the precautionary principle, and the doctrine of sustainable development, which were articulated in cases such as Vellore Citizens Welfare Forum v. Union of India.

According to the petitioners, limiting liability in the context of nuclear energy could weaken the deterrent effect that these principles are intended to achieve and may reduce incentives for maintaining the highest safety standards in nuclear installations.

Another aspect of the challenge relates to the scope of supplier liability. Concerns have been raised that any dilution of the operator’s right of recourse against equipment suppliers could weaken accountability mechanisms within the nuclear supply chain.

Regulatory Independence and Transparency Concerns

The petition also raises institutional concerns regarding the independence of nuclear regulation in India. Questions have been raised regarding the functional autonomy of the Atomic Energy Regulatory Board, particularly in relation to the appointment and removal processes for regulatory authorities.

In addition, certain provisions of the proposed framework have been criticised for potentially limiting the scope of disclosure obligations under the Right to Information Act, 2005. The petition argues that excessive confidentiality provisions may restrict public access to information relating to nuclear safety, which the Supreme Court has previously recognised as an element of the freedom of speech and expression under Article 19(1)(a).

Conclusion

The constitutional challenge to the proposed nuclear liability reform framework presents the Supreme Court with a complex policy and legal question: how to reconcile the expansion of nuclear energy as part of India’s clean energy transition with the constitutional guarantees of life, environmental protection, and transparency.

As India seeks to diversify its energy mix and reduce dependence on fossil fuels, nuclear energy is expected to play an increasingly significant role in meeting future electricity demand. At the same time, the regulatory framework governing nuclear safety and liability must maintain public confidence by ensuring adequate safeguards against catastrophic risks.

The Supreme Court’s eventual determination in this matter could have far-reaching implications for India’s nuclear liability regime, environmental jurisprudence, and the broader regulatory architecture governing hazardous industries.