Supreme Court Urges Caution in Judicial Review of Nuclear Energy Laws
The Supreme Court of India has issued a significant directive, emphasizing that constitutional courts must exercise judicial review of laws with utmost care to prevent creating an anti-investment atmosphere. The bench stressed the need to weigh national interest against hypothetical fears when scrutinizing legislation, particularly in sensitive sectors like nuclear energy.
Oral Observations During PIL Hearing on SHANTI Act
A bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi made these oral observations on Friday during the preliminary hearing of a Public Interest Litigation (PIL) filed by E A Sarma. The PIL challenges provisions of the Sustainable Harnessing and Advancing of Nuclear Energy for Transforming India (SHANTI) Act, which was passed by Parliament in December.
Advocate Prashant Bhushan, representing Sarma, argued that the Act imposes inadequate liability on private players operating nuclear power plants. He pointed out that the liability for private entities is capped at 3,000 crore rupees, despite potential damages from nuclear accidents, such as those seen in Chernobyl and Fukushima, which could run into lakhs of crores of rupees. Bhushan further contended that the government has allowed private participation in the nuclear sector while absolving them of strict civil liability clauses, with the government's own liability also capped at 4,500 crore rupees.
Emphasis on Investment Climate and National Interest
In response, CJI Surya Kant underscored the importance of fostering a conducive environment for investment. "There must be an atmosphere in the country where investors feel encouraged to invest," he stated. The CJI highlighted the critical role of nuclear energy in India's energy mix, noting that coal-based power plants are no longer encouraged and that the nation cannot do without nuclear power. He called for a balanced approach, weighing national interest against hypothetical fears.
"We should not create an atmosphere where people will fear to invest in India because courts here interfere in everything. The litigation drags on and the projects become unviable despite huge investments," CJI Kant added, cautioning against judicial overreach that could deter investment.
Policy Decisions and International Regulatory Compatibility
Justice Joymalya Bagchi echoed these sentiments, describing energy policy decisions as matters of national strategy. "These are policy decisions - what should be our energy basket. Whether the policy suffers bias or is unconstitutional could be determined on scrutiny," he remarked. The bench directed Bhushan to provide details of the regulatory framework on civil nuclear liability regimes in other countries, such as the USA, Europe, and Japan.
Justice Bagchi emphasized the need for India's regulatory framework to be compatible with international standards, especially as electricity is traded across borders. "When electricity is traded across borders, the regulatory framework in India must be compatible with those in other countries," he stated, underscoring the importance of global harmonization in energy regulations.
Adjournment and Future Proceedings
During the hearing, senior advocate Kapil Sibal attempted to interject in support of Bhushan's arguments, but the bench restrained him, instructing that "let Bhushan assist us." The court has adjourned the hearing to next month, giving Bhushan time to submit comprehensive information on international civil liability regimes. This move indicates the court's intent to conduct a thorough review while maintaining a cautious stance on judicial intervention.
The Supreme Court's observations highlight a pivotal moment in India's judicial approach to energy policy, balancing the need for robust legal scrutiny with the imperative to sustain investor confidence and national development goals.
