SC reserves order on refund of cancelled air tickets during lockdown

A day after the Directorate General of Civil Aviation (DGCA) informed the Supreme Court that its credit shell scheme will not be open for lockdown flights that originated outside India, the Solicitor General on Friday informed the apex court that a concession could be made in this category for tickets that were booked in India.

This crucial clarification came on a day when the court concluded arguments on a PIL filed by Pravasi Legal Cell and reserved orders on the scheme to be made available for passengers seeking refund on tickets booked for travel during the lockdown beginning March 25.

Concerns over the exclusion of this category were raised during the hearing by the counsel for the Pravasi Legal Cell and other intervention applications moved on behalf of passengers. Senior advocate Sanjay Hegde, appearing for the petitioner, pointed out that much prior to the lockdown, Indians working in the Gulf had booked tickets for travel to and from India. “As per the Government’s latest affidavit, we will be eligible for refund for one side travel only even though our tickets were booked at Air India offices in the Gulf,” Hegde said.

Hegde was referring to the DGCA’s affidavit filed on Thursday which said, “The ambit of the regulatory mechanism of the DGCA does not cover international flights, which originate from any foreign destination. It is stated that the said flights are governed by the regulatory mechanism of the country of origin, irrespective of the fact whether the carrier is Indian or not….issue of refund of tickets/credit shell of such international flights would be governed by the law of such sovereign country from where such international flights originate.”

Advocate Puneet Jain representing another passenger claimed that his client’s tickets were booked on both sides between Delhi and New York. “As per the DGCA decision, how can I approach the US regulatory authorities for refund.”

Solicitor General Tushar Mehta said, “If the ticket is booked within the jurisdiction of our country, you will certainly be entitled for refund.” The bench of Justices Ashok Bhushan, RS Reddy and MR Shah recorded this submission before closing arguments in the case.

As per the scheme proposed by the DGCA, immediate refund will be available for tickets booked during the lockdown period (March 25 to April 14). For tickets booked prior to March 25 for travel up to May 24 (as calibrated domestic operations recommenced from May 25), the airline will be liable to refund within 15 days, failing which it must create a credit shell in the name of the passenger to be availed for travel on any route within March 31, 2021. Interest of 0.5 per cent till June 2020 and thereafter 0.75 per cent would accrue on the credit shell that will be transferable and if unused, will return to the passenger with interest after March 31, 2021.

Airlines such as GoAir demanded the court to consider extending the refund deadline of March 31, 2021 by another six months. Senior advocate Arvind Datar appearing for GoAir said, “In two months we have disbursed Rs 40 crore refund and have to still repay Rs 266 crore. Our flights are operating at 60 per cent strength, prices have been capped, fuel charges have increased and we have to pay salaries to our workforce. From today, the deadline to make a full refund expires in six months. If this scheme has to work, the deadline must be extended to September 30, 2021.”

Senior advocate Pinaki Mishra, appearing for Vistara and AirAsia, objected to the interest component on the credit shell. He said, “On fixed deposits, the current interest rate is 5.5 per cent. Why are airlines asked to pay higher interest? We will go completely bankrupt.” IndiGo Airlines also pleaded financial distress but backed the DGCA’s refund scheme. The bench said it will consider the plight faced by airlines in its order.

The travel agents told the Court that many of the international tour agents had put their money for booking tickets. In the event of refund, the credit shell should be created in the name of the agent and not the passenger. Mehta suggested a way out. He said, “The credit shell is transferrable. We have no objection if the passenger would like to surrender the travel voucher to the travel agent. But this has to be ordered by the Court as the Centre has no regulatory mechanism over travel agents.”

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