Should compensation to the kin of air crash victim vary from person to person?

S Murlidharan | Updated on May 26, 2020

In the interest of equality as well as reducing complexities, the income of the victim should not be the basis for paying compensation

When people unfortunately die in air crashes, the compensation to be paid by the airline ought to be uniform without discrimination. The nationality or sex or age or income or the potential future income of the deceased passenger should not be the basis for compensation to the next of the kin. This salutary principle is embodied in the Montreal Convention, 1999, to which India is a signatory, and imported into the Indian Carriage by Air Act.

As per the latest revision done in 2009, a compensation of Special Drawing Rights (SDR) — an IMF notional currency that is derived on the basis of the prevailing value of some hard currencies of the world — 113,100 is payable to the next of kin in case of death in air travel (https://www.business-standard.com/article/pf/how-do-air-crash-victims-get-compensated-114072700741_1.html). Compensation for physical injury and loss of or damage to baggage is also laid down in the convention.

It is in the light of this international legal provision that the Supreme Court order of May 19, 2020, in Triveni Kodkany vs Air India Ltd and others, granting the largest ever compensation in an individual case of ₹7.64 crore needs to be understood and critically examined. The victim was a passenger in the ill-fated flight from Dubai that overshot the runway in Mangaluru and fell down the cliff in 2010. He was an expatriate working in a UAE company.

The Supreme Court practically endorsed the compensation ordered by the NCDRC set up under the Consumer Protection Act while acceding to the prayer of the family to consider cost to the company (CTC) without nitpicking about various allowances. In this article we are not considered about the nitpicking facet of the case but with the larger issue of whether compensation should vary so egregiously from person to person.

Income of victim

Human life is invaluable, more so when it is snuffed out in its prime. Which is perhaps why in India under the Motor Vehicles Act, 1988 as interpreted by the Supreme Court in National Insurance Company Ltd vs Pranav Sethi in 2017, the income of the victim at the time of fatal accident is the clincher — greater the income greater the compensation.

In other words, an unemployed youth might at best get compensation if at all based on his future potential although the apex court conception of adding 30 per cent on this count to the existing income of people dying in their prime simply cannot be implemented when one was unemployed. When the income is zilch, the addition would also be a zilch, won’t it? Be that as it may.

While nobody grudges the highest ever compensation paid in India of ₹7.64 crore to the kin of Kodkany, isn’t the bottomline this: Show me the man and I will show you the rules. Or better still, tell me who the victim was and I will tell you how much he was worth to the family.

Like the Montreal Convention, shouldn’t the Indian law also not consider death as the greatest leveller? How can a 90-year-old victim of a road accident be fobbed off with a pittance while the next in kin of a much younger co-traveller, say, aged 40 and earning a fabulous salary, walks away with a fortune though in unfortunate circumstances? Obviously, the more liberal and more consumer-friendly Consumer Protection Law has been allowed to hold sway and override the Carriage by Air Act.

Financial weight

A chastened Air India, indeed all airlines, might in future well think in terms of charging an extra amount towards the possible heightened premium for covering the life of a high-paid executive after asking travellers to disclose their income at the time of booking the tickets. Airlines burdened by the mounting aviation fuel bills were earlier thinking in terms of charging passengers by their weight — a 50 kg passenger will be charged half of what a 100 kg passenger has to pay. Now they may well be constrained to factor in the financial weight of the passengers just in case.

Parliament must assert the death-is-the-greatest-leveller principle both in the interest of equality as well as in the interest of reducing complexities. Otherwise, high net worth individuals especially might be at the receiving end of airline high-handedness on the back of the legal offhandedness.

The writer is a chartered accountant

Published on May 26, 2020

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