Thirty-eight years after an Indian Airlines flight crashed near Ahmedabad, killing 133 people, Air India has asked the Supreme Court to fast-track a hearing in a compensation dispute whose outcome could reshape how India compensates victims of air crashes.
The apex court is scheduled to hear the plea on Monday, according to the cause list, after Air India filed its application on 1 October. At the heart of the dispute is a simple question: should families of air-crash victims continue to be compensated using formulas developed for road-accident victims under the Motor Vehicles Act, or should courts adopt a separate framework for aviation accidents?
The outcome could shape how compensation is determined in future air-crash cases, with victims arguing that awards should reflect actual economic loss, including income and future earning capacity, as well as inflation. They also contend that compensation should account for airlines’ financial capacity and insurance cover, rather than being restricted by formulas developed for road accidents.
“The decision could have implications beyond compensation for plane-crash victims, as it could shape the broader framework for consumer protection and how victims are compensated for harm,” said Satyam Dwivedi, aviation law specialist and managing partner at DC Law Offices.
Air India told the Supreme Court in September 2025 to keep the underlying question of law open for consideration in connected or future proceedings.
The compensation dispute has been pending before the top court since 2010, after litigation arising from the 19 October 1988 crash travelled from the lower court in Ahmedabad to the Gujarat High Court and eventually to the Supreme Court.
Emails seeking comments from Air India on Sunday morning and the Airports Authority of India (AAI) remained unanswered at the time of publication.
Different framework
In written submissions filed in October 2025 and reviewed by Mint, the victims argued that compensation in an air-crash case should not be calculated using the Motor Vehicles Act framework used for road accidents. They said aviation accidents are fundamentally different because passengers have no control over an aircraft’s operation or safety.
Instead, they argued that compensation should account for the victim’s actual economic loss, including income, future earning capacity and changes in earnings, as well as inflation.
The victims also argued that airlines are large, financially capable and insured enterprises, and that compensation in an air crash should therefore not be restricted by formulas developed for road accidents. They said the availability of insurance should also be considered while ensuring that victims receive full and just compensation.
The plea also pointed to the 2010 Mangalore air-crash case, in which the Supreme Court applied principles under the Motor Vehicles Act to determine compensation. The victims, however, argued that the court did not specifically decide whether the MVA framework should apply to air-crash claims, leaving the issue open.
Case could set a precedent
Lawyers say the case could ultimately have implications beyond compensation payable in the 1988 crash.
“This is a very important case, and the Supreme Court should use this opportunity under Article 142 to lay down standardised guidelines for compensation. You cannot put a different value on a person’s life based on whether they travelled by air or road,” said Dwivedi.
Alay Razvi, managing partner at Accord Juris, said a more individualised approach could potentially increase compensation exposure in some cases.
“If the Supreme Court requires a more individualised assessment of actual loss, compensation exposure may increase in cases involving young victims, high-income earners, professionals with demonstrable career growth or families with substantial financial dependency. Airlines may also face greater exposure where liability is shared with other parties but is not subject to an applicable statutory or convention-based limit,” Razvi said.
Case history
The case dates back to 19 October 1988, when Indian Airlines Flight IC-113, operating from Mumbai to Ahmedabad, crashed while approaching Ahmedabad airport. The aircraft was carrying 135 people, including six crew members. Of these, 133 were killed, while two passengers survived, one of whom suffered substantial physical and mental disabilities.
Families of the deceased and survivors filed 38 civil suits between 1989 and 1992 seeking compensation. The Ahmedabad City Civil Court decided the claims in 2002. The litigation then moved to the Gujarat High Court, which decided the appeals in 2009 and revised several awards.
The dispute reached the Supreme Court in 2010. In April that year, the court recorded that the compensation determined against Indian Airlines had been deposited with the Ahmedabad City Civil Court, along with interest, while the Airports Authority of India had deposited 30% of the compensation. The court directed disbursement to claimants subject to them furnishing security other than a bank guarantee.
Despite the passage of nearly four decades, the dispute has remained unresolved, prompting Air India to seek an early hearing before the Supreme Court.
The hearing comes against the backdrop of the Air India crash last year that killed 260 people, with several related pleas concerning air safety and the investigation into the crash pending before the Supreme Court.