Days after the devastating Air India crash in Ahmedabad, which killed at least 274 people, challenges loom over compensation distribution and victim identification. While Tata Sons and Air India have announced interim payouts—₹1 crore and ₹25 lakh per victim, respectively—questions remain over the adequacy of these amounts, delays in DNA-based identification, and the varying claims from families of passengers versus ground victims.
However, this is not the final compensation the families of the victims will get. According to the law, since Air India was an international flight, compensation to victims of the crash will be covered under the Montreal Convention, 1999. This excludes any travel insurance, personal insurance, and other benefits the victims are owed. Though, if negligence is proved, families of those who died, or the injured will be entitled to a higher amount.
Legal Framework: The Montreal Convention Explained
India, in June 2009, became the 91st country to ratify the Montreal Convention, 1999 or MC99. This means airlines operating international flights from countries that have signed the treaty will pay compensation according to the established guidelines.
According to the revised limits of liability established under Articles 21 and 22 of MC99, Air India is liable to pay out 1,51,880 Special Drawing Rights (SDR) for each deceased passenger. The compensation is the same regardless of a passenger’s nationality. According to the International Monetary Fund (IMF), the value of Special Drawing Rights (SDRs) is based on a basket of the world's five leading currencies – the US dollar, Euro, Yuan, Yen and the UK pound.
This SDR is then converted to one’s local currency. Airlines must pay this compensation regardless of fault.
Understanding Air India Compensation
Shortly, after the crash, Tata Sons announced an ex gratia compensation of Rs. 1 cr to those who died in the crash – passengers, cabin crew/pilot and the bystanders on the ground.
This compensation is different from what Air India will shell out under MC 99. If one calculates the SDR in Indian rupees, as of June 18, 2025 (1 SDR is equal to INR 117.603), the compensation amounts to an upper limit of Rs. 1.8 crores. Since Air India already announced an interim compensation of Rs. 25 lakhs, this amount is likely to be adjusted towards the final compensation under MC99.
The final compensation will be calculated based on a formula set out in the Supreme Court’s Pranay Sethi judgment which looked at future prospects to decide costs in motor accident claims. This means a minor who died in the crash will be entitled to a different compensation amount as compared to a stay-at-home mom, a working individual with dependents or non-dependents, a dependent, and various other factors.
It is further clarified airlines will make the payout under MC99 to the passengers only. Pilots and the cabin crew will mostly be covered by their employment contract, workers’ compensation laws, or aviation-specific insurance policies which apply to on-duty airline staff.
Those who died when Air India crashed and destroyed buildings of a medical college will have to move courts to claim compensation from the airline or any other relevant agency.
What Is The Cost Of A Life?
Former Chief Justice of India DY Chandrachud said in accident cases when an adult loses their life, there is a cost to their value. CJI Chandrachud was part of the five-judge Constitution Bench in the Pranay Sethi—a landmark case—which laid guidelines on the computation of how compensation will be calculated.
“The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of ‘just compensation’ has to be viewed through the prism of fairness, reasonableness and non-violation of the principle of equitability,” the judgment read. The top court clarified that In a case of death, the legal heirs cannot expect a “windfall”, though simultaneously, “the compensation granted cannot be an apology for compensation”.
“It cannot be a pittance,” the Supreme Court had said.
The judgment said a person’s value would depend on his age, employment status, future prospects, whether he is salaried or self-employed, number of dependents among other factors. “Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable,” the Pranay Sethi judgment read.
In March 2020, CJI Chandrachud authored the Supreme Court's Triveni Kodkany judgment which directed the largest-ever compensation payout in an individual case in the 2010 Mangaluru air crash case.
However, the former top judge said the case of a minor becomes a little more complicated. “Beyond the emotional aspect of it, you cannot treat a minor without value. That child would’ve been a productive asset not only to their family but to their country as well,” the ex-judge said.
Challenges In Claiming The Compensation
Legal experts observe that the fight for full-and-final compensation is a complex issue that will take years to settle. The airlines and the victim families usually battle over the final compensation and take years for resolution. According to a report in the Times of India, families of those who died in the 1988 Air India crash are still battling for appropriate compensation.
Even as some families accepted whatever compensation was offered to them at the time, some families of victims from the 2010 Mangaluru Air India crash are still fighting it out in court. BH Aboobacker, a fish merchant from Malpe, lost his second son Ibrahim in the 2010 crash. At the time, Air India had announced a compensation of Rs 75 lakhs. But I was “strongly urged” to accept Rs. 45 lakhs and settle the issue, Aboobacker told BOOM. “I was told the offer for Rs 45 lakhs was on the table for a few days only. If I accept, I will get it, or else I was told that I would have to go to court and face years of legal battle to get the full amount that was originally promised,” he said. “I took the money because I did not have the strength for a long, protracted battle,” he added.
Advocate Yeshwanth Shenoy said the computation of the final compensation is a long-drawn process. “The Tatas have played it smart by announcing the Rs. 1 crore compensation and offering to rebuild the damage to the medical college,” Shenoy told BOOM. He said everyone is emotionally charged right now and this is seen as a good public relations move by the Tatas.
Meanwhile, the actual compensation will be calculated 5-10 years down the line and the kin will have to keep fighting and suffer through the process he added. Shenoy recalled how Triveni Kodkany, the wife of Mahadev Kodkany who died in the Air India Mangaluru crash, fought for more than a decade to get her final compensation.
After a long legal battle, the Supreme Court in March 2020 awarded Kodkany Rs. 7,64,29,437 – the largest compensation in an individual case related to the crash. Shenoy said he is also representing the family of the pilot involved in the crash. That case is still pending in the Supreme Court, he said.
Senior advocate Meenakshi Arora said family members of non-passenger victims will have to claim third-party insurance cover as they do not stand on equal footing as the passengers whose compensation is governed by MC99.
Advocate Ishaan Chhaya said something similar. He said that tort law in India is relatively underdeveloped as compared to other jurisdictions such as the US and the UK. “You can technically sue several stakeholders in the incident, but a tortious action or a civil suit based on negligence, especially in such complicated matters, is likely to take a long time. The civil procedure allows airlines and potential defendants to throw up roadblocks and delay payouts by decades,” he said.
“Complications also arise because there are hundreds of victims and presently no clear conclusive wrongdoer or the ‘tortfeasor’ (one who commits a tort action, or a civil wrong) in sight, which makes attribution of blame and apportionment of liability difficult,” Chhaya told BOOM.
He said that airline operators like Air India carry significant insurance coverage for such events, usually in the form of a ‘Hull & Liability Policy’ that covers crashes and liabilities to third parties arising out of negligence. Chhaya suspects the Ahmedabad Air India crash may very well result in one of the largest payouts in Indian aviation history.
Chhaya emphasised the need for the Government to intervene. “If victims are left trying to claim compensation through the regular route, especially, third parties such as the affected doctors, it will take a long long time.”, he said.
Ex-CJI Chandrachud however believes that this case will be a test for the principles laid down in MC99. “The Montreal Convention only covers claims by passengers who were on board. But in this case, there is no reason why you can't stretch it to cover those who died on the ground,” the former judge told BOOM.
CJI Chandrachud said the deaths of those on the ground is an extension of the same plane crash and it is “intrinsically linked”. He said the loss of the lives of the doctors and others should thus be on equal footing as that of the passengers.
“You cannot deny them simply because they were not on the passenger manifest,” CJI Chandrachud said.
