India as a nation has a huge reliance on fossil fuel as a source of electrical energy. The contribution of fossil fuel is approximately seventy percent in the total electricity production in the country.  At the same time, it is well-known fact that reliance on fossil fuel energy endangers the environment to a large extent. Thus for shifting the goalpost of energy requirement from the fossil fuel to a nuclear based energy is the need of an hour so that environmental degradation can be stopped but development is also very imperative for a country like India since India being a developing nation, self-sufficiency on energy is very much required and moreover the development has to be done but again, not at the cost of future generation and thus the need of an hour is a Sustainable Development. In order to achieve above mentioned goal India entered into civil nuclear agreement with the USA in the year 2005 for the supply of nuclear as a fuel for producing the electrical energy. Nuclear energy not only being a clean and green source of energy but in a country like India where electricity is still a distinct dream for many households, it is viewed that it will pave the way for the supply of uninterrupted and cheap electrical energy. For achieving the clean and green energy the 123 agreement which India entered with USA in 2005 was seen as the step in the right direction. Since after this agreement India needed a domestic legislation for fixing the liability in case of any industrial accident which may take place at industrial site, as the reason being that not only Indian constitutional courts have incorporated and recognized the various international environmental jurisprudence as a part of rules which will apply in India, if any environmental damage is caused but also the very nature of nuclear industry can pose such a challenge if any accident or disaster take place in future course of action. Moreover the lesson of Bhopal Gas tragedy was very fresh in everyone’s mind thus to tackle any such situation Indian legislature  knew that they needed a strong compensatory law, which in a way can create a deterrent in the minds of industrial polluter but this bubble got busted when in the year 2010 Indian parliament came up with Civil Liability for Nuclear Damage Act, 2010.The Act was passed to facilitate the enforcing of agreement entered by India and USA. The Act established a uniform civil nuclear liability regime in case of any nuclear industrial accident The Act incorporates the strict liability regime propounded in Ryland v Fletcher[1] and also establishes that in case any industrial disaster by nuclear industry the limit of their liability will be fixed as per the provision of the law. Thus here lies the problem with the legislation as it is well established legally recognized environment doctrine in India that in case of industrial accident the owner of the premise will be absolutely liable. The above doctrine of absolute liability was laid down in M.C Mehta v UOI[2] by the Hon’ble Supreme Court of India and the reason for departing from the strict liability doctrine was explained by Justice P.N.Bhagwati stating that in today’s time when science and technology has grown so much there is a need of a more stricter regime to tackle mass tort environmental  action which not only endangers the environment very badly but also endangers the human civilization. One of the concepts evolved by the court in absolute liability case was the ‘Deep Pocket’ theory, which meant that according to financial status of the polluter the compensation will vary. Since then there has been a plethora of judicial decision which has reaffirmed this fact that compensation in case of environmental cases has to be decided as per the surrounding factual circumstances of each cases and hence the capping of liability under any civil compensatory legislation is a complete opposite to the views expressed by the constitutional courts in India. So it is quite evident that how the situation of paradox has been created by the Indian legislature by capping the liability under the Civil Liability for Nuclear Damage Act, 2010. [PDF]
 On one hand, India being a developing nation, getting a nuclear fuel for the electrical energy will pave the way for green and clean energy but by limiting the pecuniary liability in case of  nuclear industrial accident under Civil Liability for Nuclear Damage Act, 2010 the legislature has diluted the environment protection regime for sure.


[1] 1866 LR 3 HL 330
[2] 1987 SCR (1) 819

Ankit Rai is LLB from Banaras Hindu University and LLM from Delhi University. He is Assistanty Professor of Law and Media at Lloyd Law College, Gr. Noida. His dissertation is on the Civil Nuclear Liability. He can be reached at [email protected]