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A bench headed by justice Dalveer Bhandari asked the Centre and the national carrier to file their response and fixed the matter for final hearing in April. The court passed the order on a petition filed by Mohammed Rafiq Salam, who had lost his son in the crash. Salam's son was working in Dubai and was coming home a month after his sister's wedding.
Salam approached the apex court challenging the verdict of a division bench of Kerala high court, which had set aside a single judge order directing Air India to pay a minimum compensation of Rs 75 lakh to the families of each of the victims.
Senior advocate Harish Salve, appearing for the petitioner pleaded the court that the victims' families should be compensated according to the Montreal Convention to which India is a signatory.
According to the Montreal Convention, the petitioners are entitled to have Rs 1 lakh special drawing rights compensation. SDRs are issued by the International Monetary fund and covert to nearly Rs 75 lakh.
One hundred and fifty-eight passengers and crew onboard the Air India aircraft from Dubai were killed when the plane caught fire after one of its wings hit a hillock at Kenjar in Mangalore on May 22, 2010.
In July 2011, a single judge bench of the Kerala high court, while hearing Salam's plea, had held that the carrier was liable to pay no fault liability of one lakh SDR to the petitioner.
Noting that India was a signatory to the Montreal Convention, the single judge bench had said, "It is clear that the intention of lawmakers was to bring about a parity in the matter of payment of compensation to the passengers, irrespective of class of travel, while providing for a 'two tier system' of compensation as adopted in Montreal Convention."
"Since the extent of damage to any injury cannot be anything more than death", no further proof is necessary to have sanctioned the minimum compensation of 'Rs 1 lakh SDR' in the case of death and this is the mandate of the statute, it had held.
The order was set aside by the division bench of the high court on an appeal by Air India. The division bench had held that the airline was liable to pay only actual damages proved by the claimants in case of death and the victims in case of injury.
The liability can be determined through negotiated settlement or by civil court of competitive jurisdiction, the bench had held.
The division bench, while setting aside the order of the single judge, had said that the national carrier as a matter of goodwill should offer a "reasonable minimum", even if the actual damages payable in law is low, so that unnecessary litigation can be avoided. If no settlement is possible, actual damages can be determined by the civil court, the division bench of high court had said, while directing AI to pay compensation reasonably estimated by the attorneys irrespective of whether there is settlement or not.