Dispute Between Passenger & Airline Over Refund Of Flight Ticket Not 'Commercial Dispute': Delhi High Court

The Delhi High Court has held that an agreement containing a provision for providing mere services on payment of certain charges cannot, in every case, be termed to be an agreement, dispute in respect of which can be said to be a commercial dispute.“To constitute a dispute to be a commercial dispute arising out of an agreement which contains a provision of services, the agreement or transaction is to necessarily contain an element of commerce or trade or business,” a division bench of Chief Justice DK Upadhyaya and Justice Tushar Rao Gedela said.It thus dismissed an appeal preferred by a duo, whose commercial suit against British Airways raising dispute over refund of cancelled flight tickets was returned by the District Court.As per the District Judge, the nature of dispute does not in any manner constitute commercial dispute within the meaning of the said term under Section 2(1)(c) of the Commercial Courts Act, 2015.Appellants relied upon Section 2(1)(c)(xviii) of the Act according to which agreement for sale of goods or provision of service constitutes a commercial dispute. It was contended that since the issue raised in the suit related to 'services' to be provided by the respondent-airline as such, the dispute would fall within the meaning of “commercial dispute”.The Airline on the other hand contended that for constituting a dispute to be a commercial dispute, there has to be some element of commerce and business involved between the parties and in the instant case, no such element of commerce or business was involved; rather, it was a simple contract of providing service sans any commercial or business consideration.The High Court agreed that the Appellant had entered into a contract with the airline however, it added that merely because the said contract came into existence it cannot be said that any commercial transaction took place between the parties. It observed,“The contract only provides that on buying the ticket the respondent-defendant will be obligated to take the passenger to his-her destination. Such transaction, in our opinion, sans any element of business, trade or commerce, cannot be termed to be ordinary transaction of merchants or bankers or financiers or traders, it can also not be termed to be export or import of mercantile or services.”Referring to Section 2(1)(c)(xviii), the Court said there is no agreement for sale of goods in the present case and it is only a contract for providing services, however “dispute arising out of such a contract for providing services can be construed to be a commercial dispute only in case it involves some or the other kind of trade or business or financing etc.”As such, the Court dismissed the appeal.Appearance: Ms. Shaini Bhardwaj, Mr. Aditya Sharma, Mr. Avichal Mishra, Mr. Vedic Thukral and Ms. Rukhsar, Advocates for Appellant; Ms. Ritu Singh Mann, Advocate for RespondentCase title: Chand Mehra & Anr. British Airways PLCCitation: 2025 LiveLaw (Del) 1167Case no.: FAO (COMM) 245/2024Click here to read order

Dispute Between Passenger & Airline Over Refund Of Flight Ticket Not 'Commercial Dispute': Delhi High Court

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