In E.A.S. Sarma vs. Union of India & Ors. (2026), Supreme Court's 3-Judge Bench of Chief Justice of India (CJI) Surya Kant, Justice Joymalya Bagchi and Justice Vipul M Pancholi heard the writ petition challenging the provisions of Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 on May 19, 2026 but did not pass any order. The Act goes against the absolute-liability principle for hazardous industries laid down by the Supreme Court in the Oleum gas leak case in 1987. The case realted to SHANTI Act was filed on February 11, 2026 and registered on February 19, 2026. The next date of hearing is on July 13, 026.
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The repealed Civil Liability for Nuclear Damage Act, 2010, had expressly provided for the operator's right of recourse against the supplier.
The new Act, which has replaced the Civil Liability for Nuclear Damage Act of 2010, allows private companies to set up civil nuclear power plants but exempts them from liability beyond Rs 3,000 crore in the event of any unfortunate incident at a nuclear power plant.
The bench observed:"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 also observed: "even a tribunal when the tribunal wants to assess compensation and suitably award it to a person who is entitled".
The countries like Japan and Germany have stopped energy production through nuclear power plants and they have no cap on the liability. In the United States, the cap is Rs 1.54 lakh crore, which is more that 100 times the cap imposed in India.
In case of nuclear accidents, the loss is more than Rs 10 lakh crore, as was the case of the Chernobyl nuclear power plant accident of 1986 and the Fukushima nuclear power plant accident of 2011.
SHANTI Act, 2025 allows private sector and foreign companies to operate nuclear power plants in India. It has also capped the liability of these operators at a very low level and exempted the supplier from any liability. It caps the liability of the largest plant operator in India at a mere Rs 3,000 crores (i.e., approximately USD 331 million, amounting to less than 0.1 per cent of the cost of damage caused by the accidents at Chernobyl or Fukushima).
The Act received the assent of the President of India on December 20, 2025, which has been Gazette Notified. No, the timelines for framing of Rules, Regulations, polices and implementation of provisions of the Act has not been notified by the Government so far. It has the provision for drafting of Rules, Regulation and Policies for the effective implementation of the provisions of the Act. The SHANTI Act also provides power to the union government to establish Directorates, Wings and Divisions for the purposes of exercising its power or discharging its functions which includes effective enforcement of safety, security, safeguards, interagency coordination during radiation emergency and fixing accountability on licensee or holder of safety authorization. The provision for participation of private sector entities in nuclear
power generation will only take effect once the exercise of framing of rules and regulations of the SHANTI Act is completed.
The Act has aligned the important civil nuclear cooperations aspects in the legal framework to enhance nuclear energy share to meet the national goals in a manner that fully comply to the national and international commitments in the areas of safety, security, safeguards, civil liability for nuclear damage.
The Act provides legal framework for the promotion, development and use of atomic energy and ionizing radiation for the welfare of the people of India through nuclear power generation, application in healthcare, food, water, agriculture, research, industry, environment, innovation in nuclear science and technology and to provide for robust regulatory system for its safe and secure utilisation.
On January 8, 2026, Gazette of India published rectifications of few proofing errors in the 44-page long SHANTI Act, published in the Gazette of India.
On April 1, 2026, union government informed Lok Sabha that the SHANTI Act allows private sector participation for setting up a nuclear facility, or to carry out activities for the production, use and disposal of nuclear energy under a license from the Central Government and safety authorization of the Regulatory Board. This Act also has provisions for civil liability for nuclear damage in case of any nuclear incident in the nuclear installation. The SHANTI Act has aligned the civil liability for nuclear damage with international liability regime. It provides a pragmatic and graded approach for nuclear damage liability from 100Cr to 3000Cr based on the type of nuclear facility. The principal for payment compensation for the nuclear damage is prompt paymentby operator with strict and no-fault liability. Above operator’s liability, Government of India’s liability is upto 300 million SDR. Above this liability, Government can seek from Convention on Supplementary Compensation which is an international Convention to which India is party.
Notably, responding to a question by Sasikanth Senthi on whether the government has conducted a safety, regulatory and financial risk assessment before expanding private participation in a sector involving strategic and environmental risks and if so, the details thereof, Dr. Jitendra Singh, Minister in the Prime Ministers Office informed that "Government of India has established the Atomic Energy Regulatory Board (AERB) by a statutory order (S.O. 4772), to carry out certain regulatory and safety functions envisaged under Section 16, 17 and 23 of the Atomic Energy Act, 1962. Atomic Energy Regulatory Board (AERB) is empowered to lay down safety standards and frame rules and regulations for regulatory and safety envisaged under the Act. Nuclear Power Plants (NPPs) in India are sited, designed, constructed, commissioned & operated in conformity with relevant nuclear safety requirements including environmental safety. Highest level of nuclear safety is ensured in the NPPs, which is verified through systematic multi-tier safety review in AERB and periodic regulatory inspections of NPPs carried out by AERB. In case any deviation is noticed, AERB enforces suitable corrective/ remedial measures...The regulatory framework and requirements of AERB are generally entity and technology neutral. Therefore, the same regulatory framework can be utilised for safety regulation of any Nuclear Power Project irrespective of the entity involved (Private/Public). (e) AERB has established criteria for reporting of nuclear incidents by the licensee. As per the recently passed SHANTI Act, 2025, AERB is required to provide its recommendations to the Central Government for notifying such nuclear incidents, within 15 days from the date of occurrence of the nuclear incident." Senthi had also sought details of the safeguards proposed to ensure transparency, public accountability and adequate compensation mechanisms in case of any nuclear incident.
The fact is that SHANTI Act has repealed Atomic Energy Act, 1962 under which AERB was constituted. The core questions are: Is it not a fact that there no clause about supplier liability? Why are suppliers indemnified? A supplier, who has provided faulty equipment, can walk away without any liability and Indian tax-payers are going to bear the cost. What does the Act change in the Civil Liability for Nuclear Damage Act, which has been repealed? Does capping liability create ethical hazard? How much of India’s electricity comes from nuclear energy? Why have past nuclear capacity targets been missed?
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