The Supreme Court today accepted all recommendations from the Directorate-General for Civil Aviation (DGCA) to refund airfares to passengers for tickets booked during the COVID-19 lockdown.
The bench of judges Ashok Bhushan, R Subhash Reddy, and MR Shah made it clear that tickets booked through travel agencies will be refunded to them and not directly to the passengers.
When the court reserved its verdict last week, Attorney General Tushar Mehta clarified the Centre’s position that the credit facility could not be used by travel agents who booked tickets during the lockdown. He said:
“So far as travel agents are concerned, we cannot regulate them. We don’t have control over it. But suggestion is that a passenger can use the credit shell only through the agent.”
The Centre had also submitted that it could not control contractual obligations between agents and passengers. SG Mehta had argued,
“We can recognise two agencies because they are recognisable – passengers and airlines. We have done our best to ensure that the passenger either gets the money back or gets the voucher which is transferable.”
“If the passenger surrenders the voucher before the agent and the same is refunded?”
Mehta responded,
“We have no problem with that if the passenger gets their money back by surrendering the voucher which is surrendered before the agent.”
Senior Advocate Pallav Shishodia, who appeared for the travel agencies, had pointed out that the passengers had paid the money to the travel agencies rather than the airline. He told the court that there are many cases where the agents have paid the airline in advance.
Senior advocate Arvind Datar, who appeared for GoAir, said the airlines were facing massive losses and that while they had “frozen working capital” they had to shoulder the burden of paying refunds.
In response, Justice Bhushan had said,
“But that is your airline’s problem, how can you hold up passengers’ money?”
Senior Advocate Aryama Sundaram added that whatever problems the airlines were having should not hamper the rights of the passengers.
Datar then said,
“We are not saying we won’t refund, but March 31, 2021 is an unrealistic deadline. We are only seeking some relaxation.”
He had added that GoAir had a total liability of ₹300 crore in refunds, of which ₹40 crore was already refunded.
The Court had earlier asked the Centre to file an additional affidavit clarifying how travel agents will make good the loss incurred by them if the refund of airline fare for tickets booked during the lockdown is made directly to passengers.
In response, DGCA informed the Supreme Court that the credit shell facility for tickets booked during the lockdown period will only be applicable to passengers who could not avail flights and that no such credit shell would be given to the travel agents.
The Centre has also informed the Court that the refund for air tickets will only be applicable for flights originating in India, both domestic and international. It has clarified that there cannot be any refund for flights originating out of India, irrespective of whether it is an Indian carrier or an international carrier coming into India.
Earlier, the DGCA has categorised passengers into three categories:
- 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.
- 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.”
- For bookings that were made for travelling on dates after May 24, the refund would be governed by the Civil Aviation Requirements (CAR).
The threshold of May 24 is set for dividing the passengers in these categories since operation of domestic air travel had begun in a calibrated manner May 25 onwards.
[Source – Bar and Bench]
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