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Friday, 26 August 2011

Only actual damages to Air Crash sufferers

A Division Bench of the Kerala High Court, on Thursday, set aside a single judge's verdict holding that Air India Ltd. was bound to pay a minimum compensation of one lakh Special Drawing Rights (SDRs), equivalent to Rs.75 lakh, each to the legal heirs of those killed in the Mangalore air crash on May 22, 2010. (The SDRs are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund.)

The Bench, comprising Justice C.N. Ramachandran Nair and Justice P.S. Gopinathan, while setting aside the judgment, observed that the third schedule to the Carriage by Air Act, 1972, incorporating the Montreal Convention, did not provide for any minimum compensation for death of, or injury to, an air passenger. The court, however, observed that the carrier was liable to pay the actual damages proved by the claimants in the case of death or injuries. The liability so payable could be determined through negotiated settlements or in a civil court of competent jurisdiction.

The Bench felt that the air carrier, as a matter of good will, should offer a reasonable minimum compensation if the actual damages payable in law were low, so that unnecessary litigation could be avoided. In fact, the air carrier could pay damages up to Rs.75 lakh to the claimants on proving negligence on the part of the carrier
The court said if no settlement was possible, the actual damages payable had to be claimed and proved by the injured or the legal heirs of the deceased in a civil court.

The single judge's verdict came on a writ petition filed by the parents of B. Mohammed Rafi, 24, of Kasaragod, who was killed in the air crash. They sought a compensation of a minimum of one lakh SDRs based on the Montreal Convention.  Allowing an appeal filed by Air India, the Division Bench observed that compensation had to be claimed by the kin of the air crash-victims based on sound provisions of the law of tort and determinants of compensation, such as age, income status, loss of dependants, and other relevant factors.

Air India said a total compensation of Rs.50 crore had been paid to the legal heirs of 62 persons killed in the cash and the six injured. The highest compensation of Rs.7.757 crore had been paid to the legal heirs of a cardiologist who was killed in the crash. The average compensation paid was Rs.80 lakh. Negotiations were on with the legal heirs of other victims. The airline said the petitioners had been paid Rs.20 lakh. During negotiations, they were offered a settlement of Rs.35 lakh. However, they refused to take the offer. As many as 158 people were killed when an Air India Express plane from Dubai plunged over a cliff into a wooded valley.

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