The Supreme Court of India has observed that constitutional courts must exercise judicial review with caution so as not to create an environment that discourages investment in the country. The remarks were made by a bench headed by Chief Justice of India Surya Kant and Justice Joymalya Bagchi during a preliminary hearing of a public interest litigation.
The petition was filed by E A S Sarma challenging certain provisions of the Sustainable Harnessing and Advancing of Nuclear Energy for Transforming India Act, commonly referred to as the SHANTI Act, which was passed by Parliament in December. The law allows private participation in the nuclear energy sector and prescribes specific liability limits in the event of a nuclear accident.
Senior advocate Prashant Bhushan, appearing for the petitioner, argued that the Act caps the liability of private operators at 3000 crore rupees, while the government’s liability is capped at 4500 crore rupees. He contended that the financial consequences of a nuclear accident could far exceed these limits and cited international nuclear disasters to support his argument. He referred to the Chernobyl disaster and the Fukushima Daiichi nuclear disaster as examples of incidents where damages were extensive and long lasting.
Bhushan submitted that limiting liability for private players could weaken accountability and expose citizens to potential risks. He questioned whether the legislative framework provided adequate safeguards and argued that strict civil liability provisions are essential in sectors involving high risk technologies.
Responding to the arguments, Chief Justice Surya Kant emphasized the importance of maintaining an environment conducive to economic growth and investment. He stated that courts must carefully weigh national interest against hypothetical fears about legislation. The bench observed that India’s development needs require a balanced approach, particularly in the energy sector.
The Chief Justice noted that coal based power plants are increasingly discouraged due to environmental concerns and that nuclear energy remains a significant component of long term energy planning. He stated that regulations must be aligned with international standards and that the judiciary should be mindful of the broader economic implications of its interventions.
The court observed that prolonged litigation and uncertainty surrounding major infrastructure projects can affect their viability, especially when substantial investments are involved. It stressed that while judicial review is a constitutional responsibility, it should not inadvertently create apprehension among investors.
The matter is at a preliminary stage, and the court has not yet expressed any final opinion on the merits of the petition. Further hearings are expected to examine the constitutional validity of the contested provisions in detail.
The observations underline the ongoing debate over balancing investor confidence, public safety, and national development priorities. The outcome of the case could have important implications for India’s nuclear energy policy and the broader regulatory framework governing high risk industries.
