Air tickets: SC asks Centre to clarify on modalities of refund to passengers, agents

The Supreme Court on Wednesday asked the Centre to clarify by Friday the modalities of refund of air tickets to be made to the passengers and travel agents in view of cancellation of flights during the COVID-19 induced lockdown period.

The top court asked the Centre to file a fresh affidavit by September 25, with regard to issues relating to modalities of ticket refunds on which Solicitor General Tushar Mehta conceded that the instant affidavit is poorly drafted.

A bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah said that it is only concerned with refund and non-refund of money for tickets booked during the lockdown period.

It was hearing a plea which has raised the issue of air tickets refund owing to cancellation of flights due to COVID-19 induced lockdown which had commenced from March 25.

Senior advocate Sanjay Hegde, appearing for NGO Pravasi Legal Cell', said that if one books tickets in airlines like Air India, Indigo etc and fly out of India then the affidavit filed by Director General Civil Aviation (DGCA) is applicable.

He said that the DGCA should also cover people for refund, who have booked flights on these carriers to come back to India like in the Gulf Countries and therefore the issue needs to be sorted.

Solicitor General Tushar Mehta, appearing for Ministry of Civil Aviation and DGCA, said that the government has taken a decision of refund keeping in mind the welfare of all and an appropriate solution has been worked out.

Mehta said that a holistic view has been taken keeping in mind the interests of passengers and the airlines.

The bench asked the Solicitor General that suppose prior to one day before the lockdown, a passenger has booked a flight ticket for travel during the period of lockdown, then what about his refund.

Mehta replied that he would not get the refund immediately.

The bench then asked Mehta what happened to the refunds of a travel agent, who has already paid to the airlines for the tickets booked.

You say passenger will get a credit shell, here in case of travel agents what would happen if passenger is yet to pay for the ticket booked? , the bench told Mehta.

Senior advocate Pinaki Misra, appearing for Air Vistara and AirAsia, said that usually travel agents deposit with airlines a corpus of Rupees one crores and its balance keeps coming down with the issuance of each ticket.

He said that if the passenger has not yet paid for the ticket, then the corpus amount of travel agent will get reimbursed.

Mehta said that under the prevailing circumstances this is the best solution which the government could arrive at keeping in mind the interest of all stake holders including the passengers and the Airlines.

The circumstances are such that this is the best which the government can do, he said, adding that if some individuals have a problem then we cannot do anything as this is an exceptional situation and someone may have to bear the brunt .

Misra said that DGCAs approach is one size glove fits all and the aviation regulator cannot say you must refund.

If passengers accept my offer voluntarily then how can I be compelled to pay a refund? I can't pay nine per cent interest on the refund amount, he said, adding that if this continues, then airlines may need a moratorium.

Senior advocate C A Sundaram, appearing for Passengers Association, said that there is no question of entitlement of moratorium as this is the case of individual refunds.

Senior advocate Arvind Dattar, appearing for some Airlines, said that it is a question of collapse of airlines which will close down otherwise and it is also a question of 30,000 to 40,000 employees working in these companies.

Senior advocate Pallav Sisodia, appearing for travel agents federation, said that often the booking of tickets is only a part of the large bookings including hotels, food, etc and its part of a large trade channel.

If the money is not refunded to us then there will be numerous insolvencies. We will refund the amount to the passenger and if we don't refund then we can't work, he added.

The bench, while discussing various refund modalities and circumstances, asked Mehta if a ticket is booked through travel agent then can the refund voucher be not given to them?

The top court gave another scenario and said that if a travel agent books a ticket for a passenger and if refund is granted to the passenger then what happens to the agent.

It asked Mehta suppose a passenger has a refund voucher and he has not paid to an agent, then whether that voucher will only fetch a ticket from the same agent.

Mehta said he will file a better affidavit with regard to the modalities of refund of tickets booked for flights which were cancelled as the instant affidavit is poorly drafted on this aspect.

On September 9, the top court had asked the Centre to clarify whether it is willing to give complete refund of air tickets booked for travel during the COVID-19 lockdown.

The DGCA, in its affidavit said that full refund shall be provided by airlines immediately for tickets booked during the COVID-19 lockdown for domestic or international travel within the lockdown period.

It had said if airlines are not able to refund on account of financial distress, they shall provide a credit shell equal to the amount of fare collected and this shall be issued in the name of the passenger who has booked the ticket for domestic travel directly or through an agent including online platforms.