Don’t Let SHANTI Become Another Bhopal
Five fictional judges of a fictional Supreme Court once faced a case that every law student in the world eventually reads: Lon Fuller’s The Case of the Speluncean Explorers (1949). Four cave explorers, trapped and starving, kill and eat a fifth to survive. A statute says whoever “wilfully takes the life of another” shall be punished with death. Justice Foster opined that a rule written for ordinary circumstances cannot mechanically govern a case its authors never contemplated, and a court that refuses to look past the words when a life is at stake has abdicated, not obeyed, the law. However, Justice Keen argued that as a Judge, their job is not to differentiate what is morally right or wrong, but to simply interpret the law as it is.
That seventy-five-year-old thought experiment is, in essence, what the Supreme Court is being asked to resolve in the SHANTI Act case today. Can a legislature fix, in advance, the outer price of a human life lost to a hazard the state itself has licensed, or is a Constitutional Court empowered to go beyond the explicit wording of the Statute?
What the SHANTI Act caps
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, which replaced the Civil Liability for Nuclear Damage Act, 2010, restructures operator liability under Section 13 read with the Second Schedule: a graded ceiling running from ₹100 crore for the smallest installations to ₹3,000 crore for reactors above 3,600 MW. Beyond that, the Centre’s own residual liability is capped at 300 million Special Drawing Rights. Furthermore, under the 2010 Act, victims were allowed to pursue a case against the operators under any other Law at the same time, a provision absent under the present law. In addition, Section 12 of the 2026 Act introduces a novel exception, wherein a nuclear operator shall not be liable for providing compensation in case of “grave natural disaster,” which itself is contrary to the established doctrine of “absolute liability” developed by the Supreme Court in the Oleum Gas leak case, under which no such exceptions were to be given to the operator.
Recently, a three-judge Bench of Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana issued a notice to the Centre and the Atomic Energy Regulatory Board in the case of EAS Sarma and Ors. v. Union of India & Anr (2026). The petitioners argued that the cap under the SHANTI Act is disproportionate to what a real accident would cost, citing the example of Chornobyl and Fukushima, where entire regions remain uninhabitable till today. The Bench’s own oral remark is the crux: a statutory cap “would not bar courts from ordering higher compensation if it deems appropriate.” That is Justice Foster’s reasoning, translated into 2026: the statute fixes a number, but the Constitution’s promise under Article 21 does not bend to it automatically.
Why Bhopal is the cautionary tale, not the precedent
India has been here before and got it badly wrong. After the Union Carbide gas leak in 1984 killed thousands and injured hundreds of thousands, the Government of India, acting as parens patriae under Section 3 of the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985, sued Union Carbide in a New York court seeking upward of $3 billion in damages. The case was sent back to India. What followed was a 1989 settlement, blessed by the Supreme Court itself, for just $470 million, roughly seven times less than what was originally claimed, and a sum that has been criticised for decades as grossly inadequate to the scale of the tragedy. In 2023, a Constitution Bench led by Justice S.K. Kaul dismissed a curative petition seeking enhanced compensation, holding that the 1989 settlement was adequate enough and that though it sympathises with the victims of this tragedy, they cannot go against the settled principles of law and facts at this stage.
That history is precisely why the current case matters. If the Supreme Court now holds that a legislative cap can never truly limit a constitutional court’s power to award full and fair compensation, it will implicitly be admitting that something went wrong in providing compensation to the victims in the Bhopal tragedy, even if it was done with pure intentions. If, on the other hand, the Court effectively defers to the SHANTI Act’s ceiling, it risks legitimising a Bhopal-style outcome by statute before the next disaster even happens, rather than after.
What other nuclear states actually chose
Comparative law here cuts more sharply than is usually presented. Germany’s Atomic Energy Act (Atomgesetz), Section 31(1) states that if the nuclear damage is caused by a “nuclear event originating from a nuclear installation” as provided in Section 25(1), then the liability of the operator “shall be unlimited”. Japan’s Act on Compensation for Nuclear Damage (Act No. 147 of 1961) similarly imposes unlimited, exclusive operator liability, backed by a mandatory ¥120 billion (about $1.1 billion) financial security requirement, and Japanese courts, post-Fukushima, have held that the Tokyo Electric Power Company Holdings (TEPCO) will be liable “unlimited”. The United States Government, on the other hand, passed the Price-Anderson Act, wherein the liability of the operators is capped at $15.5 billion in addition to $500 million in insurance liability covered for each nuclear reactor, and also, in some cases, a 5% surcharge can be imposed, which will lead to total liability of $16.5 billion for each nuclear event. The act’s constitutionality was challenged because, by keeping a cap on the compensation amount, it violates Due Process or Equal Protection, but the act was upheld by the US Supreme Court in Duke Power Co. v. Carolina Environmental Study Group (1978). However, we should keep in mind that the amount capped under this Act is still significantly higher than the amount prescribed under the present law.
Even within the American system, however, courts refused to let this capped compensation become an impediment. Washington’s Supreme Court in Sofie v. Fireboard Corp. (1989) struck down a law that capped the amount of compensation, as it was seen as violating the constitutional right to a jury trial. Similarly, Florida’s Supreme Court in North Broward Hospital District v. Kalitan (2017) held that Statutory caps on noneconomic damages (such as pain and suffering) in personal injury medical malpractice cases are unconstitutional. Oregon’s Court of Appeals, in Vasquez v. Double Press Manufacturing and Rains v. Stayton Builders Mart (2017–18), did the same to a $500,000 ceiling under an Oregon Law. None of these are disaster-compensation cases, but the underlying instinct that a legislature cannot arithmetically pre-empt a court’s constitutional duty to assess actual loss is exactly the instinct Justice Foster reached for in the cave.
What is really on trial
What is really being tested is not just Section-level arithmetic but institutional credibility. A cap set this low, defended primarily on grounds of attracting private investment, effectively asks citizens to underwrite industrial risk with their own uncompensated suffering. If the Court reaffirms not merely observes in passing but holds that Article 32 and Article 226 remain unconstrained by any statutory ceiling when a disaster of this magnitude occurs, it will finally settle that the judiciary’s power to do full justice cannot be legislated away in advance. Anything less, and the next mass-tort victim in India may find themselves negotiating not from the strength of a constitutional guarantee, but from the same weak diplomatic bargaining position Bhopal’s victims were left in nearly forty years ago. India’s Supreme Court is about to tell us, once again, which judge from Speluncean Explorers it believes itself to be.
Shashank Maheshwari is an Assistant Professor at Jindal Global Law School, O.P. Jindal Global University.
