In the judgment of the case – Triveni Kodkany and Others v. Air India Ltd. and Others, delivered on March 3, 2020, a division bench of the Supreme Court, consisting of Justice Dr Dhananjaya Y. Chandrachud and Justice Ajay Rastogi have in very clear terms held that not salary, but gross income of a person should be the basic factor to determine the amount of compensation he/she is entitled to.
Mainly 4 submissions were urged by the appellants’ counsel before the Apex-Court:
1. The National Consumer Disputes Redressal Commission –NCDRC- erred in making a deduction of AED 30,000 from the total CTC of the deceased Mahendra Kodkany as reflected in the records produced by the employer;
2. An addition of thirty percent ought to have been made towards future prospects instead of 25 percent in view of the judgment of the Constitution Bench in the case – National Insurance Company Ltd. v. Pranay Sethi – (2017) 16 SCC 680;
3. The rate of conversion of AED into Indian Rupees (INR) should be taken at prevailing rate on the date of the judgment of this Court and not Rs 12.50 per AED which was the rate prevailing at the filing of the complaint before the NCDRC; and
4. Only the salary of the deceased and not his income has been taken (into consideration for deciding amount of compensation). The deceased was entitled to other benefits apart from salary including the employee’s stock options (ESOP) and other financial benefits, which have not been taken into consideration.
The Supreme Court has noted that the deceased was not self-employed. He was in the employment of a multi-national corporation, based in Dubai and was paid his salary in AED. The record indicates, that he was a long-standing employee of the employer. He had arisen from the rank of Senior Manager in July 2003 to that of a County Head in July 2005and finally2009 as Regional Director for the Middle East. His employment cannot be equated with that of a person on a fixed salary- within the meaning of paragraph 59.4 of Pranay Sethi decision. The reference to the expression ‘permanent job’ in paragraph 59.3 is not intended to include only those individuals who are in the govt. service or industrial workman protected by statute.
The deceased was evidently, a confirmed employee of his employer. This should be entitling him to adequate weightage in terms of the determination of compensation in the event of an untimely demise. The Supreme Court’s considered opinion has been that 30 pc should be allowed on account of future prospects.
On this basis, the Court added 30% amount of the income of the deceased to his income -4,82,395 AED and subtracted from that total one-fourth of his income towards personal expenses and then applied Multiplier of 13 to that amount and thus determined the amount of total compensation as 61,14,355 AED. For the purpose of conversion into INR, the SC adopted a conversion rate of Rs 12.5 per AED, which is the rate that was adopted in the consumer complaint.
The SC has stated that it was not inclined to grant the prayer made on behalf of the appellants that the exchange rate should be that which is prevalent at present. In support of this prayer SC’s decisions in the cases – Forasol v. O.N.G.C.- 1984 Supp SCC 263, Renusagar Power Co. Ltd. v. General Co. Ltd. – 1994 Supp (1) SCC 644, United India Insurance Co. Ltd. v. Kantika Colour Lab – (2010) 6 SCC 449 and Balaram Prasad v. Kunal Saha – (2014) 1 SCC 384 were cited but were distinguished by the Court and held not applicable to this case on the ground of facts being different.
Further, according to the Court there is no question of repatriating money abroad. The claimants are Indian residents. The complaint contains a claim for payment in Indian Rupees. They would be receiving the payment in Indian Rupees. Moreover, the Court has allowed the claim for interest in terms of the decision of the NCDRC.
On May 22, 2010, flight IX 812 of Air India Express from Dubai to Mangalore crashed at Mangalore airport, Mahendra Kodkany was one of the passengers aboard the ill-fated aircraft, who died in the accident. He was an expat employee,working as Regional Director of the Middle East region at the GTL Overseas (Middle East)FZ-LLC. His spouse Triveni submitted a claim on March 10, 2011 for compensation from Air India, which paid Rs 4,00,70,000/- to her on March 20, 2012 against an indemnity..Apart from this, Rs 40 lakh were, in addition paid to the parents of the deceased. On April 18, 2012, the parents and brother of the deceased filed a suit against Air India to claim compensation.
On September27, 2018, Trial Court decreed the claim of mother of the deceased in the amount of Rs 70 lakh. The claims of the father and brother were dismissed.
The complaint out of which the present appeals arose, was instituted on May 18, 2012 by the surviving spouse, son and daughter of the deceased before the NCDRC claiming compensation of Rs 13.42 crores, together with interest at the rate of 18 per cent per annum from the date of the accident and other consequential payments. The Air India Contested the claim at the National Commission.
The NCDRC allowed the complaint and awarded the compensation of AED 58,81,135 equivalent to Rs7,35,14,187 on the basis of a conversion rate of Rs 12.50 per AED. The amount already paid was ordered to be deducted from this amount. The balance of the principal sum due was determined at Rs2,95,14,187. Simple interest at the rate of 9 percent per annum was awarded from May 22, 2010 till the date on which an amount of Rs 40 lakhs was paid to the parents of the deceased. The claimants were held to be entitled to interest on the amount of Rs 6,95,14,187 with effect from the date on which the payment was made to the parents of the deceased till the date on which Rs 4 crores were paid to the claimants and also entitled to interest on the remaining amount from the date of payment of Rs 4 crores till the date on which entire Principal sum is actually paid.
Disposing of the appeals, The Supreme Court has held the total amount payable as Rs 7,64,29,437/- with interest at 9 pc per annum. After deducting the amounts already paid, balance is payable in two months. Excess paid, if any, shall not be recoverable from the claimants in terms of the SC‘s order under Article 142 of the Constitution of India.
