What was the case about?
On Tuesday, Supreme court granted the highest compensation in an individual case related to 2010 Mangalore Air Crash i.e. Rs. 7,64,29,437
Principles related to calculation of compensation laid down by the Constitution Bench in case of National Insurance Company Limited v. Pranay Sethi were discussed and applied in the case Triveni Kodkany vs Air India Ltd & others
FACTS OF THE CASE
On 22nd of May, 2010 a passenger named Mahendra Kodkany died due to the air crash at the Mangalore Airport.
His spouse, Triveni Kodkany on 10th March, 2011 claimed compensation from Air India of about Rs. 4,00,70,000 and the same was compensated to her for the indemnity.
A sum of 70 lakhs was paid to the Mahendra’s mother, dated 27th September. Moreover the brother and father also filed a suit on 18th April, 2012 which was then dismissed.
On 18th May, 2012 both the son and daughter claimed a compensation of about Rs. 13.42 crores at an interest rate of 18% per annum, before the NCDRC. The application was allowed and its was noted after the calculation that a sum of Rs. 4 crores has been paid and rest the sum of Rs. 2,95,14,187 was due.
However the final judgment was delivered on 10th of December, 2018 by deducting the telephone allowances and adopted the conversion rate which had been adopted in the complaint which was lodged before the NCDRC.
Many cross appeals were filed during these proceedings, with the appeal of complaints.
Advocate Yeshwant Shenoy on behalf of complainants:
“The NCDRC erred in making deduction of AED 30,000 from the total CTC of the deceased as reflected in the records produced by the employer;
- An addition of thirty percent ought to have been made towards prospects instead of twenty-five percent in the view of judgement of the Constitution bench in National Insurance Company Ltd v. Pranay Sethi
- The rate of conversion of AED into INR should be taken at the prevailing rate on the date of the judgment of this court and nor Rs. 12.50 AED which was the rate of prevailing at the complaint before the NCDRC.
- Only the salary of the deceased has been taken and not the income. The deceased was entitled to other benefits apart from salary including employees’ stock options (ESOP) and other financial benefits which have not been taken into consideration.
Jitnedra Kumar Sethi on behalf of Air India stated that:
- “The NCDRC has erred in making a deduction of one-fifth towards the personal expense of the deceased. The correct deduction ought to have been one-third since the complaints before the NCDRC were the spouse and 2 minor children
- Air India paid a total amount of Rs. 10.46 crores to the complaints and the mother, inclusive of interest and this would sufficient meet the interests of justice particularly having regard to the precarious financial position of Air India; and
- In addition to the deduction which was made on account of the telephone allowance, the transport allowance of AED 40,957 should also be deducted from the annual salary of the deceased in making the computation.”
WHAT THE COURT HELD?
Two judge bench comprising of Justices DY Chandrachud and Ajay Rastogi, held the following:
- There should be no exclusion of telephone/travel allowances to calculate compensation.
- In absence of evidence, additional benefits like performance incentive cannot be used to calculate the salary.
- Deductions of personal expenses should be 1/4thbased on numbers of dependents of the deceased as decided in Pranay Sethi case.
- Employment of the deceased cannot be equated with that of a person with fixed Salary.
- The complainant submission was rejected that the exchange rate should be that which is prevalent today.
“The total amount which is payable on account of the aforesaid heads works out to Rs. 7,64,29,437. Interest at the rate of 9% per annum shall be paid to the same basis as has been awarded by the NCDRC. The balance, if any that remains due and payable to the complaints after giving due credit for the amount which has already been paid, shall be paid over within 2 months from the date of receipt of a certified copy of this order. In the vent that the amount which has been paid by Air India is over the amount payable under the present judgement in the terms of or above order, we direct Article 142 of the constitution, that the excess if any shall not be recoverable from the claimants”
