[Airfare Refunds] SC Reserves Order In Plea Seeking Refund Of Flight Tickets Booking During Covid Induced Lockdown

The Supreme Court on Friday reserved orders in plea(s) pertaining to the refund of airfare for tickets booking during the Covid19 lockdown induced lockdown.

A bench of Justices Ashok Bhushan, Subhash Reddy & MR Shah heard parties in the pleas and stated that it shall take into consideration all submissions by stakeholders.

Solicitor General Tushar Mehta told the Court today that the Credit Shell facility could not be availed by travel agents who booked tickets during lockdown.

"On the last occasion, one of My lords concern was if a passenger buys a ticket from a travel agent, whether the Credit share voucher for credit refunds shall accrue to passenger. We can't regulate travel agents," said the SG

At this juncture, the bench asked SG, "you said if voucher not availed by March 31,2021, the money will get credited back to the Operator?"

SG replied to this, "We can only know the passenger who has been allotted the seat. But if he has paid the travel agent, that is the inter-se contract between the travel agent and the passenger. The DGCA cannot give direction to travel agents and therefore asking My Lords to do so."

Senior Advocate Pallav Sisodia appeared for travel agents and said that passengers have paid the money not to the airline, but to agents & in majority of the bookings, it was the travel agents who had made advance payments for bookings.

Senior Advocate Mukul Rohatgi for Indigo Airlines argued that this arrangement stipulated by the Centre did not hurt the interest of Airlines.

Senior Advocate Sanjay Hegde argued that even those people who had booked Indian carrier flights in foreign jurisdictions should be allowed refunds as the CAR had jurisdiction in those areas as well.

Senior Advocate Arvind Datar for Go Air urged the court to extend the time for payment of refunds to passengers by at least 6 months after the stipulated date of March 31.

"My Lords may kindly balance their equities. I have to repay 260 crores, I have already paid 40 crores. I am only seeking time to be extended to 31st March 2022 or at least till September, 2022. I have 6400 employees, all will lose their jobs," Datar pointed out.

Advocate for Travel Agents Federation submitted that the CAR had regulations over travel agents. "I don't mind if credit shells come in accounts of travel agents and they are transferrable, but that should be the prerogative of the travel agent," he said.

Another intervenor argued that some relaxations for senior citizens, children and in cases of medical emergencies must be made.

The Directorate General of Civil Aviation (DGCA) had filed an affidavit in the Supreme Court earlier this week, informing that the credit shells for tickets booked during the lockdown period would only be applicable to passengers and not to travel agents.

It was also stipulated that refunds would be applicable for only those flights, originally booked in India, whether domestic or internationally bound.

The DGCA has categorised the passengers in three categories:

1) For those who made bookings prior to lockdown for a period up till May 24, the refund would be governed by the credit shell scheme and the incentives thereunder;

2) For bookings made during lockdown for travelling during lockdown, refund shall be made by airlines immediately "as the airlines were not supposed to book such tickets";

3) For bookings that were made for travelling in dates after May 24, the refund would be governed by the Civil Aviation Requirements (CAR).

On the issue of the credit scheme, the DGCA has clarified that,

"if the Tour operator has already paid the money to the airline for purchasing the ticket for the client but the client is yet to pay that money to the agents. then on cancellation of ticket and converting it in to credit shell, the ticket will remain in the name of passenger and in case passenger utilizes the credit shell he will pay to the agent and not to the airline. However, in case the passenger does not utilise the credit shell till 31st Mar 2021, then the airline will have to refund the amount as per proposed formulation and money will go back to same account of the agent from which the ticket amount was paid to the airline."

On September 9, a bench comprising Justices Ashok Bhushan, R. Subhash Reddy & MR Shah had sought a clarification from the Centre on the issue of refund of flights cancelled after resumption of normal operations after lockdown. The bench also sought to know if the Centre's proposal will cover the tickets which were booked during the pre-lockdown phase.

The plea has been filed by Pravasi Legal Cell on behalf of Advocate Jose Abraham and highlights that the action of non-refund by airlines of the full amount collected for tickets due to cancellation is "arbitrary and in violation of the Civil Aviation Requirement issued by the Directorate General of Civil Aviation".