The Kerala High Court on Thursday overturned a single judge's verdict holding that the National Aviation Company of India Ltd (Air India) was bound to pay a minimum compensation of Rs 1 lakh Special Drawing Right (SDR) (around Rs 70 lakh) each to the legal heirs of those killed in the Mangalore air crash, irrespective of their age, income, status and other factors relevant for the determination of the compensation.

The Bench comprising Mr Justice C.N. Ramachandran Nair and Mr 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 either for the death or for the injury of an air passenger.

The court, however, observed that the carrier was liable to pay any actual damages proved by the claimants in the case of death or in the case of the injured. 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 goodwill, should offer a reasonable minimum compensation if the actual damage payable in law was low, so that unnecessary litigation could be avoided. In fact, the air carrier could pay actually proved damages up to 1 lakh SDR (special drawing right equivalent to Rs 70 lakh) to the claimants. The court added that the actual damages payable had to be claimed and proved by the injured or the legal heirs of a person died in the air crash in a civil court if no settlement was possible.

The single judge's verdict came on a writ petition filed by the parents of a 24-year-old Mr B. Mohammed Rafi, who was killed in the air crash, claiming a compensation of a minimum of Rs 1 lakh SDR as compensation based on the Montreal convention. The Bench set aside the judgment of the single judge after allowing an appeal filed by the Air India.

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