In AI Express Crash Case, SC Says Compensation To be Paid In Rupees At Exchange Rate Prevalent During Claim

The Supreme Court bench comprising Justice D Y Chandrachud and Ajay Rastogi has held that when a complaint contains a claim for payment in Indian rupees, payment is to be made in Indian Rupees.

The Court passed its judgment on the petition filed challenging the order of NCDRC in a compensation claim case. The matter pertains to the 2010 Mangalore Airport plane crash of Air India Express. One of the passengers who died in the plane crash was Mahendra Kokany, an expat employed as a Regional Director for the Middle Eastern Region with GTL Overseas.

The wife of the deceased along with the two children approached the National consumer Disputes redressal commission claiming compensation of NR 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. Air India contested the proceedings before the NCDRC. The NCDRC allowed the complaint and awarded compensation of AED 58,81,135 equivalent to Rs 7,35,14,187 on the basis of a conversion rate of Rs 12.50 per AED claimed compensation from Air India.

However the claimant not satisfied by the order of the NCDRC which had determined the rate of conversion as prevailing on the date of claim instead of the determining it on the date of judgement preferred an appeal before the Supreme Court.

The petitioner through its Counsel  Yeshwanth Shenoy argued that the exchange rate should be that which is prevalent today. 

“We are not inclined to accept the submission of the learned counsel for the complainants that the exchange rate should be that which is prevalent today. In support of the plea, learned counsel for the complainants relied on the judgments in Forasol v. O.N.G.C  (“Forasol”), Renusagar Power Co. Ltd v General Co. Ltd (“Renusagar”),United India Insurance Co. Ltd v Kantika Colour Lab (“Kantika Colour Lab”) and Balaram Prasad v Kunal Saha (“Balaram Prasad”),” said the Supreme Court.

In the Forasol case, “a major part of the claim for payment was in French Francs. The Court further took note of the fact that the party entitled to receive the payment was a foreign party. After consideration of the English authorities on the matter, it was held that the date for conversion should be the date of the judgment.”

In Renusagar’s case , “a contract was executed between a company incorporated in India and a company incorporated in the US. Under the terms of the contract, the amount to be paid was expressed in US dollars. Pursuant to an international commercial arbitration conducted in terms of the New York Convention, an award was drawn up in US dollars.” The bench further observed that “Both in Forasol and Renusagar, the recipients of payments were foreign parties  Moreover, the terms of contract entered into by the parties stipulated that the payments were to be made in terms of foreign currency.”

In Kantika Colour Lab case , the Respondent had obtained an insurance policy to cover the risk of transit of a film processor and printer processor from Mumbai to Haridwar. The printer suffered extensive damage during transit and the Respondent sought damages from the insurer. After coming to the conclusion that the printer could not be repaired, the Court was to determine the cost of replacement. In determining it, a two judge Bench of this Court held that “the cost should be ascertained as the cost of replacement along with the customs duty component at the rupee equivalent of the exchange rate prevalent on the date of judgment.”

In Balaram Prasad case, the Court had to determine the compensation to be awarded to the husband of the deceased as a result of the death of his wife due to medical negligence in India. The claimant as well as the deceased were non-resident Indians. The two judge Bench of this Court accepted the plea of the claimant that the value of the rupee had depreciated since the commencement of legal proceedings and in computing the compensation, regarded the current value of the rupee of a stable rate of Rs 55 per USD.

The bench awarding compensation of  Rs 7,64,29,437 observed that the facts in the context of which the above judgments were rendered are distinguishable from the present case. The money is not being repatriated abroad, The claimants are Indian residents. The complaint contains a claim for payment in Indian Rupees, hence the claimants would be receiving the payment in Indian Rupees.

“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 nine per cent per annum shall be paid on the same basis as has been awarded by the NCDRC. The balance, if any, that remains due and payable to the complainants, after giving due credit for the amount which has already been paid, shall be paid over within a period of two months from the date of receipt of a certified copy of this order. In the event that the amount which has been paid by Air India is in excess of the amount payable under the present judgment in terms of our above order, we direct under Article 142 of the Constitution, that the excess, if any, shall not be recoverable from the claimants,” said the Supreme Court. 

Read the full judgment here;

-India Legal Bureau