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SC justifies the reduction in compensation

delhi Updated: Oct 16, 2011 00:41 IST
Satya Prakash
Satya Prakash
Hindustan Times
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The Supreme Court (SC) has justified the reduction in compensation awarded to the families of the Uphaar theatre fire tragedy, saying it was “unsafe” to use high income as the determinative factor while awarding compensation to a large group of people by way of public law remedy.

A bench headed by Justice RV Raveendran (since retired), which almost halved the compensation, faulted the Delhi high court for having assumed that every person who had purchased a balcony class ticket to watch the film should have had a monthly income of Rs 15,000.

“To make a sweeping assumption that every person who purchased a balcony ticket in 1997 should have had a monthly income of Rs 15,000 and on that basis apply high multiplier of 15 to determine the compensation at a uniform rate of Rs 18 lakh in the case of people above the age of 20 years and Rs 15 lakh for people below that age, as a public law remedy, may not be proper,” was said in an 82-page judgment.

“It is improper to assume admittedly without any basis that every person who visits a cinema theatre and purchases a balcony ticket should be of a high income group person,” it further read.

“In 1997, Rs 15,000 per month was rather a high income. The movie was a new one with patriotic undertones. It is known that zealous movie-goers, even from low income groups, would not mind purchasing a balcony ticket to enjoy the film on the first day itself,” the SC said.

The SC also justified drastic reduction in punitive damages imposed on the cinema hall owners from Rs 2.5 crore to Rs 25 lakh, saying that the high court did not state the arithmetical calculation of arriving at the figure of Rs 2.5 crore.

“On a realistic assessment (at a net average income of Rs 12 per seat with average 50% occupancy for 23 seats), the profits earned from these

seats for 17 years (1969-1996) would at best be Rs 25,00,000,” it said. In regard to the death cases, the HC had presumed that each person sitting in the balcony class after buying a Rs 50 ticket could be assumed to belong to a strata of society where the monthly income could not be less than Rs 15,000.

Deducting one-third for personal expenses, the loss of dependency to the family would be Rs 10,000 per month or Rs 1,20,000 per annum. Applying a common multiplier of 15 in all cases where the deceased was more than 20 years, the compensation payable would be

R18 lakh. The High Court deducted R3 lakh and awarded compensation at a flat rate of Rs 15,00,000 where the deceased was 20 years or less.