Supreme Court Approves Proposal For Refund of Airfare Booked During Lockdown

Today, in the Latest Judgment of the Supreme Court a bench comprising Hon’ble Justice Ashok Bhushan, Hon’ble Justice R Subash Reddy and Hon’ble Justice M.R Shah with respect to refund of air fare booked during lockdown.

The first petition was filed by a society registered under the Societies Registration Act. The petitioners had alleged that the respondent airlines have violated the rights of the passengers by only providing a credit shell with a validity of one year instead of the cash amount.

It was alleged that the O.M dated 16.04.2020 issued by the MoCA only refers to tickets booked during the lockdown and does not cover the tickets that were booked before the beginning of the pandemic. It was also stated by the order dated 16.04.2020 the government has indirectly approved the practice of providing credit shells by the airlines, which is a violation of the CAR.

The Air Passengers Association of India filed the second petition, and they have requested the Court to direct airlines operating domestic and international flights to refund the amount of ticket to the passengers and that it should be the prerogative of the passenger whether they want the cash amount or a credit shell. They have also requested that no cancellation charges should be levied on the tickets. It was also alleged that many airlines are not following the O.M dated 16.04.2020.

The third petition was filed by Col. Ashok Prehar (Retd.). In his petition, it is stated that he had booked a return ticket to San Francisco USA and he has not received a refund. He has requested the Court to direct the airline to refund the whole amount of ticket which is Rs.1,66,434.

The Travel Agents Federation filed the fourth petition, and they alleged that the airlines are refusing to refund the full amount of the ticket that was booked by them. It also alleged that many travellers book tickets without taking an outright payment from the customers. As the airlines are only providing credit shells, the travel agents will lose a significant amount of cash. They have also alleged that the condition of using the credit shell is also arbitrary and illegal as there are not going to be any bookings soon because of the pandemic.

Arguments raised and measures taken by the respondents.

The respondents no.1 and 2 denied the claims of the petitioners and have stated that all the steps were taken as per law. They have referred to the meetings held by the Ministry of Civil Aviation and have provided workable solutions for the benefit of the customers.3

Some measures taken by the respondent The Directorate General of Civil Aviation are:-

If someone has made a booking before May 24 then their refund will be governed by the credit shell schemes provided by the various airlines.

If the bookings were made during the lockdown period, then the customer is entitled to get a full refund as the bookings should not have been done by the airlines.

If the bookings were made after May 24 then they will be governed by the Civil Aviation Requirement, and the CAR refund policy will process their refunds.

The DGCA has made a policy to govern the refunds to travel agents. As per the policy if the amount has been paid to an airline by the travel agent and the customer has not made a payment to the agent, then the amount receivable will be converted to a credit shell. If the passenger uses the ticket, then the amount will be given to the travel agent. In case the credit shell is not used by the customer by 31.03.2021, then the amount will be credited to the account of travel agents.

The decision of the Court

The Court agreed by the recommendation of the DGCA but also added specific stipulations.

Apart from the steps taken by the DGCA, the airlines should endeavour to release the refund within 15 days. If due to financial distress, the airline is unable to pay the cash amount, then a credit shell should be provided.

The passenger can use the credit shell to book tickets for any route of his choice, and there should not be any restrictions.

The Court directed the second respondent to ensure that all the directions should be followed strictly.

Case Details:-

Title: Pravasi Legal Cell & Ors vs Union Of India & Ors

Case No. WPC 10966 of 2020 & ors

Date of order: 01.10.2020

Coram: Hon’ble Justice Ashok Bhushan, Hon’ble Justice R Subash Reddy and Hon’ble Justice M.R Shah 

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