Need to strike a balance, says SC on SHANTI Act petition

UPSC Study Note: SHANTI Act, 2025 & Supreme Court Petition on Nuclear Liability

1. At a Glance

• The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 is a landmark legislation repealing India's two foundational nuclear laws and opening the sector to private and foreign players. [S1][S2]
• A petition before the Supreme Court of India (CJI Surya Kant bench) challenges the Act's constitutionality, specifically targeting its abysmally low liability caps and elimination of supplier liability. [S3][S4]
• Critical for GS-II (governance, SC/judiciary), GS-III (energy security, environment), and GS-IV (ethics of technology governance). [S3]
• Touches the intersection of nuclear energy policy, constitutional rights (Articles 14, 19, 21), federalism, and India–US strategic relations. [S3][S4]

2. Why in the News

• February 28, 2026: CJI Surya Kant, while hearing a PIL challenging the SHANTI Act, 2025, remarked that a "balance has to be struck between actual, visible, tangible national interest and unfortunate, hypothetical loss." [S4]
• Petitioner: Former IAS officer E.A.S. Sarma, represented by advocates Prashant Bhushan and Neha Rathi. [S4]
• SC bench: CJI Surya Kant + Justice Joymalya Bagchi; matter adjourned for July 2026. [S3][S4]
• December 2025: Both Houses of Parliament passed the SHANTI Bill, triggering public interest litigation. [S1][S2]

3. Background & Evolution

• 1962: Atomic Energy Act, 1962 enacted; nuclear power exclusively reserved for the State; no private participation permitted. [S2]
• 1987: Atomic Energy Regulatory Board (AERB) established as the safety regulator — but without independent statutory backing until SHANTI Act. [S2]
• 2010: Civil Liability for Nuclear Damage (CLND) Act, 2010 enacted post-2008 Indo-US Civil Nuclear Deal; capped operator liability at ₹1,500 crore for reactors >10 MW; introduced (controversial) Section 17(b) giving operators right of recourse against suppliers. [S2][S5]
• 2015–2022: India–US nuclear deal stalled partly because US suppliers (GE, Westinghouse) objected to Section 17(b) supplier liability. [S2][S5]
• 2023–24: Political consensus built for nuclear energy reform as India committed to 500 GW non-fossil energy by 2030 and net zero by 2070. [S1]
• December 18, 2025: Parliament passes SHANTI Act, 2025, repealing both the 1962 Atomic Energy Act and 2010 CLND Act. [S1][S2]

4. Core Static Facts

5. Multi-Dimensional Analysis

Economic

• Opens an estimated ₹10 lakh crore+ nuclear power market to private capital, crucial for India's energy deficit. [S1]
• Sliding-scale liability structure intended to attract US firms (Westinghouse, GE) which had blocked deals due to 2010 Act's supplier liability clause. [S2][S5]
• 300 million SDR (~$400 million) government residual cap is a fraction of Chernobyl ($235–700 bn) or Fukushima ($400–445 bn) damage estimates — creating a public subsidy for private risk. [S3]

Legal / Constitutional

• Petition invokes Articles 14 (equality), 19(1)(a) (right to information), and 21 (right to life/livelihood) of the Constitution. [S3]
• Elimination of Section 17(b) removes operators' automatic right to sue suppliers — critics call this a rollback of polluter-pays principle. [S2][S5]
• Section 39 RTI exemption challenged as a blanket restriction on disclosure — violates Supreme Court precedent on right to know. [S3]
• AERB independence compromised: Centre controls appointments (Sections 17 & 19) — alleged violation of India's obligations under the Convention on Nuclear Safety. [S3]
• CJI's remark on balancing "national interest" vs. "hypothetical loss" signals the Court may apply proportionality doctrine rather than a categorical strike-down. [S4]

Environmental

• Nuclear positioned as a low-carbon alternative to coal and gas to meet India's Paris Agreement commitments (net zero 2070, 500 GW non-fossil by 2030). [S1][S4]
• Suppression of supplier liability may incentivize safety corner-cutting, per petitioners — analogous to pre-Bhopal UCIL regulatory failure. [S3]
• India's forest cover and biodiversity constraints (cited by CJI himself) limit renewable siting, making nuclear essential but also concentrating environmental risk. [S4]

Geopolitical / Strategic

• SHANTI Act directly enables implementation of 2008 Indo-US Civil Nuclear Agreement by removing supplier liability — unlocks entry of GE, Westinghouse, Holtec International. [S1][S5]
• Aligns with India's IAEA safeguards commitments and potential entry into Nuclear Suppliers Group (NSG). [S2]
• Diversifies India's energy diplomacy beyond Russia (Kudankulam) and France (Jaitapur) to US companies. [S5]

Ethical / Governance

• Secrecy provision (Section 39, RTI exemption) raises questions about public participation in siting and safety decisions — contra Principle 10 of Rio Declaration. [S3]
• Regulator (AERB) appointment by the executive creates conflict of interest — the same ministry that promotes nuclear energy oversees safety oversight. [S3]
• The 300 million SDR cap effectively externalises catastrophic risk onto future victims and taxpayers — ethical concern of intergenerational equity. [S3]

Historical

• Follows global trend post-2011 Fukushima: most nations tightened liability; India is moving in the opposite direction to attract investment. [S2][S5]
• Parallels Bhopal Gas Tragedy (1984) where low liability cap (UCC settlement) denied adequate compensation — petitioners explicitly invoke this precedent. [S3]
• India's 2010 CLND Act was itself a compromise; its Section 17(b) was globally unique and became a deal-breaker. [S5]

6. Recent Developments (Last 12–18 Months)

• December 18, 2025: Both Houses of Parliament pass SHANTI Bill, 2025; presidential assent follows. [S1][S2]
• Early 2026: Multiple petitions filed in Supreme Court challenging the Act. [S3]
• February 28, 2026: CJI Surya Kant bench hears PIL by E.A.S. Sarma; remarks on need for "balance" between national interest and liability concerns; matter adjourned. [S4]
• July 2026: Next date of hearing listed by Supreme Court. [S3]
• Holtec International (US nuclear firm) publicly welcomed SHANTI Act enactment, signaling readiness to enter India market. [S1]

7. Prelims Hooks (High-Density Factual Bullets)

1. SHANTI expands to: Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India. [S1]
2. SHANTI Act, 2025 repeals two Acts: the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. [S2]
3. Government's residual liability under SHANTI Act is capped at 300 million Special Drawing Rights (SDR). [S4]
4. Under CLND Act, 2010, operator liability cap was ₹1,500 crore for reactors >10 MW; SHANTI Act replaces this with a sliding scale. [S2][S5]
5. Section 17(b) of CLND Act, 2010 — which gave operators recourse against suppliers — has been abolished by SHANTI Act. [S2][S5]
6. Section 39 of SHANTI Act empowers Central Government to exempt nuclear plants from RTI Act, 2005. [S3]
7. AERB (Atomic Energy Regulatory Board) was established in 1987; gains formal independent statutory status under SHANTI Act. [S2]
8. Petitioner challenging SHANTI Act: E.A.S. Sarma, former IAS officer; represented by Prashant Bhushan. [S4]
9. SC bench hearing the petition: CJI Surya Kant + Justice Joymalya Bagchi. [S4]
10. Nodal department for nuclear energy in India: Department of Atomic Energy (DAE), under the Prime Minister's Office (PMO). [S2]
11. Activities that remain State monopoly under SHANTI Act: enrichment of nuclear material, production of heavy water, management of spent fuel beyond on-site storage. [S2]
12. Convention on Nuclear Safety — India's obligations under this international instrument are cited to challenge AERB appointment provisions (Sections 17 & 19). [S3]
13. India's NDC target relevant here: 500 GW non-fossil fuel energy capacity by 2030; nuclear is part of this mix. [S1]
14. Holtec International (US company) publicly welcomed SHANTI Act's enactment. [S1]
15. The petition compares SHANTI Act's liability cap to Bhopal Gas Tragedy settlement, arguing both provide inadequate victim compensation. [S3]

8. Mains Relevance

GS-II: Governance, Judiciary, Constitutional law, Parliament legislation
→ "Statutory safeguards for independent regulation, fundamental rights jurisprudence (Articles 14, 19, 21), separation of powers"

GS-III: Energy Security, Environment, Infrastructure
→ "Nuclear energy's role in India's energy mix; private sector in strategic sectors; environment vs. development trade-off"

GS-IV: Ethics
→ "Intergenerational equity, polluter-pays principle, accountability of corporations in public risk"

Plausible Mains Question Stems: 1. "The SHANTI Act, 2025 marks a paradigm shift in India's nuclear energy governance. Examine its key provisions, the constitutional concerns it raises, and the Supreme Court's role in balancing national interest with fundamental rights." (GS-II/III, 250 words) 2. "Critically analyse the liability framework for nuclear damage in India, tracing its evolution from the CLND Act, 2010 to the SHANTI Act, 2025. Is the current framework adequate to protect victims?" (GS-III, 250 words) 3. "Discuss the ethical dimensions of exempting nuclear plant suppliers from liability while simultaneously restricting RTI disclosures on nuclear installations." (GS-IV, 150 words)

9. Related Topics to Study Next

10. Common Errors / Trap Areas

1. SHANTI Act does NOT merely amend the 2010 CLND Act — it repeals it entirely (along with the 1962 Atomic Energy Act). Confusing amendment with repeal is a common mistake.
2. AERB was NOT created by SHANTI Act — it existed since 1987; SHANTI Act merely gives it statutory independence. Do not confuse creation with statutory recognition.
3. 300 million SDR is the government's residual liability — not the operator's cap. The operator cap follows a sliding scale; the SDR figure applies to the sovereign backstop layer.
4. Section 17(b) repeal ≠ total removal of supplier recourse — suppliers can still be held liable if (a) expressly provided in contract, or (b) damage was intentional. "Suppliers are completely free" is an overstatement.
5. SHANTI Act does NOT privatise all nuclear activities — enrichment, heavy water production, and spent fuel management beyond on-site storage remain exclusively with the Central Government. Do not state that India's entire nuclear programme is privatised.

11. Sources

• [S1] India Enacts SHANTI Bill 2025 — Holtec International — https://holtecinternational.com/hh-40-26/ — (Tier 4/industry)
• [S2] SHANTI Act 2025: Rewiring India's Nuclear Liability and Regulatory Architecture — Norton Rose Fulbright — https://www.nortonrosefulbright.com/en/knowledge/publications/dbff80e4/shanti-act-2025-rewiring-india-s-nuclear-liability-and-regulatory-architecture — (Tier 4/legal commentary)
• [S3] Ex-Civil Servants Move Supreme Court Challenging SHANTI Act Capping Nuclear Liability — LiveLaw — https://www.livelaw.in/top-stories/plea-in-supreme-court-challenging-shanti-act-on-nuclear-liability-524867 — (Tier 4)
• [S4] Need to strike a balance, says SC on SHANTI Act petition — The Hindu, 28 Feb 2026 — https://www.thehindu.com/todays-paper/2026-02-28/th_international/articleG7JFLBDS8-13689952.ece — (Tier 4, primary article)
• [S5] SHANTI Bill 2025 Explained: Private Entry, Nuclear Liability Reform, and Transparency Concerns — Vajira Mandravi — https://vajiramandravi.com/current-affairs/shanti-bill-2025-explained-private-entry-nuclear-liability-reform-and-transparency-concerns/ — (Tier 4)