There can be no differential treatment between rich and poor in payment of compensation

The Kerala High Court on Wednesday said the National Aviation Company of India Limited (Air India) was bound to pay a minimum compensation of Rs.75 lakh to the legal heirs of each of the victims killed in the May 22, 2010 Mangalore crash.

Justice P.R. Ramachandra Menon made the observation while declaring that Abdul Salam and Ramla, parents of 24-year-old B. Mohammed Rafi, were entitled to a minimum of one lakh SDR (Special Drawing Rights equal to Rs. 75. lakh) as compensation based on the Montreal Convention.

Rafi was among the 158 persons who died when an Air India Express plane from Dubai overshot the table-top runway and plunged over a cliff into a wooded valley.

The court said there could not be any differential treatment between poor and rich passengers in payment of compensation. The insurance premium, which formed part of the ticket fare, did not draw any such distinction. The insurance policy was issued to the carrier by the insurer uniformly, and not after knowing whether the passenger was an Indian or foreigner or a child or earning person.

In fact, the insurer was aware of the legal position on the statutory duty of the carrier to satisfy the liability to the prescribed extent. It was after considering all relevant aspects that the risk was ‘underwritten” and the policy issued, with the assurance that any contingency covered under the statute would be met.

The court pointed out that the Carriage by Air Act, 1972, a special statute enacted to give effect to the Montreal Convention, did not draw any distinction among passengers over payment of one lakh SDR compensation. And the same should be paid by the carrier for the death of or bodily injury sustained by a passenger in an accident on board, subject to the satisfaction of the extent of damage. The air carrier could pay compensation higher than the liability, but could not avoid or limit the liability provided under the Montreal Convention.

It was clear that the intention of the lawmakers was to bring about parity in payment of compensation to passengers, irrespective of their class. Also “since the extent of damage due to any injury cannot be anything more than death, no further proof is necessary to have sanctioned the minimum compensation of one lakh SDR in the case of death.”

The petitioners sought a compensation of one lakh SDR as provided under the Carrier by Air Act, 1972 for Rafi's death.

The company contended that the petitioners had made a higher demand though it had agreed to pay Rs. 35 lakh, given his earning capacity and age. The victim was working as salesman in Dubai and earning Rs. 25,000 a month.