Supreme Court Approves DGCA's Proposal on Refund on Air Tickets Booked Prior and During Lockdown

In a big relief to thousands of air passengers, the Supreme Court on Thursday approved the Directorate General of Civil Aviation’s (DGCA) proposal on air tickets refund and credit shell on flights booked prior and during lockdown.

A bench headed by Justice Ashok Bhushan and comprising Justices R. Subhash Reddy and M.R. Shah said the court cannot lose sight of the present situation prevailing in the country and across the globe in the backdrop of Covid-19 pandemic, and it cannot be disputed that the civil aviation sector, which is one of the important sectors, is seriously affected in view of the ban imposed for operating flights.

“If a passenger has booked a ticket during the lockdown period (from March 25 to May 24) for travel during lockdown period and the airline has received payment for booking of air ticket for travel during the same period, for both domestic and international air travel and the refund is sought by the passenger against that booking being cancelled, the airline shall refund the full amount collected without any cancellation charges. The refund shall be made within a period of three weeks from the date of cancellation,” said the top court.

The verdict has come on a plea filed by NGO Pravasi Legal Cell through advocate Jose Abraham.

The bench added that if the tickets have been booked during the lockdown period through a travel agent for a travel within the lockdown period, in all such cases full refund shall be given by the airlines immediately.

“Passengers who booked tickets at any period of time but for travel after 24th May, 2020 – refund of fares to the passengers covered under this category shall be governed by the provisions of Civil Aviation Requirements (CAR),” said the top court.

The bench said the airlines shall make all endeavours to refund the collected amount to the passenger within 15 days from today. “If on account of financial distress, any airline / airlines are not able to do so, they shall provide credit shell, equal to the amount of fare collected, in the name of passenger when the booking is done either directly by the passenger or through travel agent so as to consume the same on or before March 31, 2021,” said the top court.

The bench observed that the air passenger traffic has come down heavily and which is gradually being restored, and at this moment any strict enforcement action of the CARs would further restrict/reduce their operations and such enforcement action may further jeopardise the possibilities of generation of cash by airlines which can further adversely affect/delay the refund cycle.

The bench said the credit shell issued in the name of the passenger shall be transferable which can be utilized up to March 31, 2021. “It is also made clear that such credit shell can be utilized by the concerned agent through whom the ticket is booked, for third party use,” observed the court.