Air India has informed the family of a victim of the June 12, 2025, AI-171 crash that the compensation calculated under existing legal principles is less than the Rs 25 lakh already paid as interim relief, but has offered an additional Rs 10 lakh as a full and final settlement, according to a formal communication viewed by NDTV.
In a letter titled "Without Prejudice", Air India outlined the legal basis for its assessment and attached a compensation calculation sheet along with a draft "Release, Discharge and Indemnity" (RDI) form to be signed if the family agrees to the settlement.
Acceptance of the offer would require signing the RDI, effectively closing any further claims related to the crash. The offer is conditional, being made "without prejudice to our rights and contentions," and advises the family that they are free to seek legal advice before making a decision.
This implies that the passenger's family would essentially permanently waive all present and future claims against not only Air India, but also Boeing, the Union of India, including the Ministry of Civil Aviation, the Directorate General of Civil Aviation (DGCA), the Airports Authority of India, General Electric Company, GE Aerospace, Safran S.A., Safran Electronics & Defense, Avionics USA LLC and Honeywell International Inc.
The waiver also extends to each entity's "parent companies, affiliates, shareholders, officers, subsidiaries, group companies, sister concerns, directors, employees, servants, agents, reinsurers, insurers."
Compensation Calculated Under Legal Framework
The airline said it had assessed compensation in line with the Carriage by Air Act, 1972, which incorporates the Montreal Convention into Indian law. It noted, however, that while the Act and Convention establish liability, they do not prescribe a fixed formula for calculating compensation amounts.
To determine the payout, the airline cited Supreme Court judgments, including Triveni Kodkany v. Air India and National Insurance Co. Ltd. v. Pranay Sethi, stating that the assessment was carried out "in accordance with the principles laid down by the Supreme Court" and based on documents submitted by the claimant family.
The airline said the total amount calculated, including baggage loss, "is less than the sum of Rs. 25,00,000 already paid as interim compensation."
Despite this, it added, "Notwithstanding the above, we would like to offer you an additional sum of Rs 10,00,000 in full and final satisfaction and payment of all claims."
Air India's Stance
The airline said that after making interim payments of Rs 25 lakh to families of the victims, and with the process of ex gratia payment of Rs 1 crore from the AI-171 Memorial and Welfare Trust currently underway, it has now initiated the final compensation process.
"We have ensured that the final compensation being offered to families is fair and in accordance with the law. The information about this has been shared in a transparent, compassionate way with the affected families," the airline said in a statement.
Air India said that, following recognised industry standards, compensation payments are made on a "full and final" basis to provide closure. While declining to comment on specific cases, the airline said the amounts offered to families have been calculated using the applicable legal framework and may vary depending on individual circumstances.
The airline also confirmed that families who agree to receive final compensation are required to confirm that they have no future claims against Air India or any other entity, including original equipment manufacturers, airport authorities or government agencies.
"This particular aspect is important in order to ensure that the process is indeed final, and to prevent Air India from receiving any direct or indirect claims in the future," the statement said.
Airline sources told NDTV that, beyond the Rs 25 lakh interim compensation earlier announced by Air India, families of the victims will receive additional payments as part of a final settlement package, with the amounts varying based on individual circumstances.
The airline had disbursed the Rs 25 lakh interim relief to the most affected families by the end of December 2025. In a small number of cases, however, payments are still pending due to incomplete documentation, sources said.
"Air India remains committed to doing everything we can to support every impacted family as they navigate through this difficult process," the statement added.
No Future Claims: Known Or Unknown
The document contains broad indemnity clauses stating that the family "irrevocably and forever release, discharge, indemnify and keep indemnified and hold harmless" the listed entities from any present or future claims arising out of the death.
It further states that the settlement remains binding "notwithstanding the discovery or existence of any new or additional facts" that may arise after signing.
The family also agrees to take sole responsibility if any other person, including any other "member of the family" as defined under the Carriage by Air Act, 1972, later makes a claim. In such a case, the signatories undertake to fully indemnify the released parties against "all losses, damages, costs (including full legal costs), expenses, and liabilities."
Legal Jurisdiction And Binding Effect
The document states that it is governed by Indian law and that courts in Ahmedabad will have exclusive jurisdiction over disputes arising from it.
The indemnities are stated to remain binding across jurisdictions and apply to heirs, administrators, successors and assigns. Even if any clause is found invalid, the remainder of the document will continue in force.
The Crash
The compensation relates to the tragic accident of the AI-171 passenger plane bound for London's Gatwick airport on June 12 2025, killing 260 people. The crash killed 241 people on board the flight and 19 others on the ground, with only one survivor from the plane.
A preliminary report into the investigation by the Aircraft Accident Investigation Bureau (AAIB) found that just seconds after take-off, fuel-control switches abruptly moved to the "cut-off" position, starving the engines of fuel and triggering total power loss.
The AAIB has recently said that the final investigation report, containing conclusions and safety recommendations, will be published upon completion of the investigation in line with established international norms.
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