Refund Of Airfare: SC Allows Airlines & Stakeholders To File Reply To Centre's Proposals On Flight Tickets Cancelled Due To Lockdown

The Supreme Court on Wednesday granted 10 days to airlines and other stakeholders to file their reply to the Centre's affidavit stating that tickets booked by passengers in domestic and international carriers for air travel between March 25 to May 3, 2020 will be fully refunded.

A bench comprising Justices Ashok Bhushan, R. Subhash Reddy & MR Shah also 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 prre-lockdown phase.

Senior Advocate Aryama Sundaram, appearing for Air Passengers Association of India, submitted that the petitioner was largely agreeable with the proposal of the Ministry of Civil Aviation except for one or two things.

Senior Advocate Harish Salve, appearing for Spicejet submitted that his client is happy with the formulation of the Central Government, while Senior Advocate Arvind Datar appearing for Go Air said that he had certain points of objection to the affidavit.

Senior Advocate Mukul Rohatgi appeared for indigo Airlines and said that he needed time to file his reply.

Senior Adv. Pinaki Mishra for Air Vistara & Air Asia said that he sought time to file a reply.

Adv. Liz Mathew submitted that her client had booked tickets in December 2019 for travel during the period for which lockdown was imposed later. She seeks a clarification that such cases will also get the benefit of refund.

Adv Neela Gokhale submitted that the Centre's affidavit did not address the concerns of travel agents, whose monies are lying with the airlines.

Sr Adv Pallav Shishodia suggested that the credit shell should go to the tour operator instead of the passenger.

At this juncture, Justice Bhushan disagreed. "It is the passenger who paid the money. Why should the credit shell go to the operator?" he remarked.

The case will now be taken up for further consideration on September 23.

On the last date Directorate General of Civil Aviation (DGCA) filed an affidavit stating that tickets booked by passengers in domestic and international carriers for air travel between March 25 to May 3, 2020 will be fully refunded.

Senior Advocate CA Sundaram had also sought permission to implead all Airlines in the case.

The Centre had also clarified neither the provisions of CARs were superseded nor the same were place under the suspension.

"It is submitted that the said order was issued primarily for two purposes:- firstly, to make it clear that airlines can't take the shelter of lockdown to deny the refund; and secondly, to give little extended time to the airlines to refund the fares as no operations were being allowed at that time and there was concerns of liquidity crunch with the airlines. However, it is respectfully submitted that order was never intended to violate any CAR."

On June 11, the top court had sought the Central Government's stand & had asked the Civil Aviation Ministry to discuss the modalities involved with all concerned airlines and respond to the Court. The SG had stated that his personal opinion was that the money ought to be refunded.

Senior Advocate Harish Salve had appeared on behalf of SpiceJet and had apprised the Court that Airlines had suffered a hit of over $60 Billion globally, due to the pandemic. It was further informed that 49% of the flying cost was fixed, with zero revenue to the airlines.

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".

Moreover, the petitioner had averred that instead of providing full refund of the amount collected, the action of Airlines of providing mandatory "Credit Shell" was in clear violation of the DGCA requirements according to which the option of refund is "the prerogative of the passenger and not a default practice of the Airline".

Furthermore, the plea states that airline companies should be showing "humanitarian virtues" rather than using the "challenging times as an opportunity to extract unlawful gains from people who are already in misery"

The petitioner also earmarks the rationale to this by stating that the question of anyone booking a ticket during the lockdown does not arise since passenger flights had already been cancelled and that this makes the Officer Memorandum dated April 16 "ambiguous" and "devoid of any logic" whatsoever.