Full Judgment Text
W.P.(C)D.No.10966 of 2020 etc.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (C) NO. OF 2020
[DIARY NO.10966/2020]
Pravasi Legal Cell & Ors. …..Petitioners
Versus
Union of India & Ors. …..Respondents
W I T H
WRIT PETITION (C) NO.570 OF 2020;
WRIT PETITION (C) NO.595 OF 2020;
AND
WRIT PETITION (C) NO.952 OF 2020
J U D G M E N T
R. Subhash Reddy, J.
Background facts, and relief sought for, in this batch of
1.
cases is similar, as such all these cases are heard together and
are being disposed of by this common judgment.
2. The pandemic situation of COVID19, has adversely
Signature Not Verified
Digitally signed by
MEENAKSHI KOHLI
Date: 2020.10.01
10:50:03 IST
Reason:
affected the economy globally, in several sectors. Our country –
India – and civil aviation sector is not an exception to the same.
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W.P.(C)D.No.10966 of 2020 etc.
To contain the pandemic situation of COVID19, first lockdown
th
was imposed by the Government of India, from 25 March 2020
th
to 14 April 2020. In view of such lockdown, a ban on operation
of all domestic and international flights was imposed. The
rd
lockdown period was further extended upto 03 May 2020, with
the ban continuing on operation of all domestic and international
flights. There was an issue of refund of air fare during the
lockdown period, when domestic and international flights’
operation was suspended. The Ministry of Civil Aviation (MoCA),
while acknowledging the unusual situation that has arisen due
to the lockdown imposed, to contain further spread of COVID19
and its consequential effect on the air passengers and airlines, by
examining the grievances received from various quarters, issued
an advisory to all stake holders in civil aviation sector in the
th
shape of Office Memorandum dated 16 April 2020. The
advisory issued read as under:
“3. … … … …
(i) If a passenger has booked a ticket during
th
the first lockdown period (from 25 of
March to 14 of April, 2020) and the airline
has received payment for booking of the air
ticket during the first lockdown period for
travel during the same period, for both
domestic and international air travel and
refund is sought by the passenger against
that booking being cancelled, the Airline
shall refund the full amount collected
without levy of cancellation charge. The
refund shall be made within a period of
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W.P.(C)D.No.10966 of 2020 etc.
three weeks from the date of request of
cancellation.
(ii) If a passenger has booked a ticket during
the first lockdown period and the airline
has received the payment for booking of air
ticket during first lockdown period (from
th th
25 of March to 14 of April 2020) for travel
during the second lockdown period (from
th rd
15 of April to 3 of May, 2020) for both
domestic and international air travel and
the passenger seeks refund on cancellation
of the ticket, the Airline shall refund the full
amount collected without levy of
cancellation charge. The refund shall be
made within a period of three weeks from
the date of request of cancellation.”
In the same Memorandum, Government has issued directions to
Directorate General of Civil Aviation to monitor the compliance of
such advisories referred above.
3. Writ Petition(C) being Diary No.10966 of 2020 is filed by a
society registered under Societies Registration Act, 1860 by way
of public interest litigation, to declare the action on the part of
the respondentairlines, operating domestic as well as
international flights in India, in not refunding the full amount
collected for the tickets, due to the cancellation of flights in the
wake of restrictions imposed by the Government of India to
contain COVID19 as arbitrary and in violation of Civil Aviation
Requirements, issued by the Directorate General of Civil Aviation.
3
W.P.(C)D.No.10966 of 2020 etc.
A consequential relief is sought to direct the respondents to
refund the full amount upon such cancellations.
4. In this writ petition, it is the allegation of the petitioners
that though it is obligatory on the part of the respondentairlines,
operating domestic as well as international flights, to refund the
full amount collected for the tickets which are not utilised in view
of the cancellation of flights in the wake of restrictions imposed
by Government of India to contain COVID19, respondents are
providing a credit shell with the validity of one year, which is
contrary to Civil Aviation Requirements (CAR) of May 2008. It is
alleged that as per the CAR, the option of holding refund amount
in credit shell by the airlines shall be prerogative of the
passenger and not a default practice of the airline. While
referring to O.M. dated 16.04.2020 issued by the MoCA, it is
alleged that the said Memorandum deals only with the refund for
the tickets that were booked during the lockdown period and
leaves out the majority of passengers who had booked tickets
before the flights were banned. It is the case of the petitioners
that by issuing O.M. dated 16.04.2020, the Government has
indirectly approved the practice of airlines for providing Credit
Shell for the tickets booked before the lockdown was declared
and the same is in violation of CAR. By further alleging that the
time lines for refund as mentioned in the O.M. dated 16.04.2020
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W.P.(C)D.No.10966 of 2020 etc.
runs contrary to CAR, petitioners have sought relief by way of
directions to the respondents to refund full amount collected for
the tickets booked, any time for travel.
5. W.P.(C)No.570 of 2020 is filed by Air Passengers
Association of India, which is also in the nature of public interest
litigation under Article 32 of the Constitution of India, seeking
directions to various airlines operating both – domestic and
international flights – to refund the ticket amounts collected from
the passengers of the flights which are cancelled on account of
lockdown, with a consequential direction to the respondents to
refund the same without levying any charges on account of
cancellation etc. In this writ petition also, it is the allegation of
the petitionerAssociation that, the CARs have been issued in
exercise of powers under provisions of Aircrafts Act, 1934, to
implement the Convention relating to International Civil Aviation
standards and recommended practices but same is not being
followed to refund the fare amount in view of the cancellation of
flights. By further detailing the dates of lockdown declared by
the Government, it is alleged that the action on the part of the
airlines in providing ‘Credit Shell’ instead of refunding the full
amount collected for the tickets cancelled on account of
cancellation of flights, is in clear violation of CARs. The
petitioner also alleges that the option of holding the refund
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W.P.(C)D.No.10966 of 2020 etc.
amount in ‘Credit Shell’ by the airline shall be the prerogative of
passenger not a default practice of the airline. While referring to
the representation filed by it on 24.05.2020, and various
complaints received from the numerous passengers regarding the
actions of the airlines in not refunding the amounts spent by
them on air tickets, it is alleged that the action of the
respondents in withholding the amounts spent by them on air
tickets is illegal and contrary to CAR. In this writ petition it is
alleged that the several airlines are not acting as per the O.M.
dated 16.04.2020 in refunding the amounts as directed and
issuing ‘Credit Shell’ instead of refund. With the aforesaid
allegations, petitioner also seeks directions by way of declaration
that the actions on the part of the airlines, which are operating
domestic as well as international flights, in not refunding the full
amount for the tickets due to cancellation of flights in the wake
of restrictions imposed by the Government of India to contain
COVID19 is arbitrary and illegal with a consequential direction
to refund the same.
W.P.(C)No.952 of 2020 is filed by Col. Ashok Prehar (Retd.)
6.
and another seeking quashing of O.M. dated 16.04.2020 issued
by the Ministry of Civil Aviation and also seeking a declaration
that the denial of refund by the third respondent – Air India Ltd.
– for tickets booked by them on 18.12.2019 to travel to United
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W.P.(C)D.No.10966 of 2020 etc.
States of America on 08.05.2020 with a return ticket to India on
05.06.2020, as illegal, arbitrary and contrary to CARs. They seek
directions to refund the full amount of Rs.1,66,434/ collected by
respondent no.3 for the tickets booked by them on 18.12.2019.
In this writ petition it is the case of the petitioners that, petitioner
no.1 is a senior citizen who has served in Indian Army for 27
years and retired as a Colonel and the petitioner no.2 is his wife
and on 18.12.2019 they have booked tickets to Air India Flight
No.AI173 to travel to San Francisco, United States of America
from New Delhi on 08.05.2020 with a return flight AI102 from
New York to New Delhi on 05.06.2020 for an amount of
Rs.1,66,434/. While referring to the advisory issued by the
United States of America, by way of Advisory dated 19.03.2020
recommending to avoid any travel and the proceedings issued by
the Director General of Civil Aviation, Government of India for
banning flights during the lockdown period, it is alleged that in
view of cancellation of flights they had no option but to cancel
their tickets by seeking refund of the amount. In this writ
petition it is the specific case of the petitioners that the O.M.
dated 16.04.2020 issued by the Ministry of Civil Aviation, which
directs all airlines to pay full refund without levying any
cancellation charges for the bookings made and payment
received only, during the lockdown period from 25.03.2020 to
7
W.P.(C)D.No.10966 of 2020 etc.
03.05.2020, as illegal. It is alleged that the said Memorandum
leaves out a majority of passengers including the petitioners who
had booked their tickets to travel to United States of America,
much earlier to restrictions imposed to control the spread of
CORONA virus. Pleading discrimination for the passengers who
had booked tickets during the lockdown period, and the
passengers who had booked tickets earlier, petitioners seek
quashing of O.M. dated 16.04.2020 by further declaration that
denial of legitimate refund to the petitioners by the airlines is
patently unfair and also states that the action of the third
respondent in offering ‘Credit Shell’ instead of refund is
unreasonable and unjustified. It is also pleaded that in view of
their age and the pandemic situation in the world, the travel for
leisure is likely to remain restricted in the foreseeable future.
Petitioners, while pleading that giving ‘Credit Shell’ vouchers
without refunding the full fare to the petitioners, as sought by
them, runs contrary to CAR, allege that the denial of refund by
third respondent amounts to unjust enrichment at the expense
of the petitioners and similarly placed persons. With the
aforesaid allegations, petitioners seek quashing of O.M. dated
16.04.2020, with a consequential direction to refund the full
amount of Rs.1,66,434/ collected by the third respondent for
the flights booked by them on 18.12.2019.
8
W.P.(C)D.No.10966 of 2020 etc.
7. W.P.(C)No.595 of 2020 is filed by Travel Agents Federation
of India, a society registered under the Societies Registration Act,
1860 seeking declaration that the action on the part of the
airlines operating domestic as well as international flights in
India, in refusing to refund the full amount collected for tickets to
travel during the period of ban on air travel, as illegal and
arbitrary with a consequential direction to the respondents to
facilitate refunds of the amounts received by the airlines towards
the booking of tickets during the period of ban on air travel. In
this writ petition, petitionerFederation seeks directions against
the Ministry of Civil Aviation and Directorate General of Civil
Aviation, for issuance of appropriate directions to airlines for full
refund on tickets booked for travel during the lockdown on
account of their cancellation. It is the allegation of the
petitioners that there are certain ambiguities in the O.M. dated
16.04.2020 and 19.04.2020, which are being used by the airlines
to avoid payment of refund, as sought by the passengers towards
the cancellation of flights. In writ petition, it is stated that there
are many passengers who had booked their flights through travel
agents who are the members of the present petitioner. While
stating that the flight booking process through travel agents is
distinct from passengers who have booked the tickets directly
from the airline. It is the allegation of the petitioner that instead
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W.P.(C)D.No.10966 of 2020 etc.
of refunding the amount deposited by the travel agents with the
airlines they are compelling the travel agents/passengers to
accept the facility of ‘Credit Shell’, which compels the bookings to
be rescheduled instead of cancellation. While pleading that there
is no certainty in rescheduling the travel plans, petitioner
Federation has questioned the action of the respondents in
offering ‘Credit Shell’ and seeks directions for refund of full
amount in lieu of cancellation of tickets. In the writ petition, by
giving details of various orders passed by the Government and
also the Directorate General of Civil Aviation banning the flights
during the lockdown period and ban imposed on operation of
domestic as well as international flights, it is the case of the
petitioner that nonrefund of the amount by airlines for the
tickets due to cancellation, is illegal and contrary to CAR. While
referring to the CARs issued by DGCA and Rule 133A of the
Aircraft Rules, it is alleged that holding the refund amount in
credit shell by the airlines is the prerogative of the passenger and
not a default practice of the airline. With reference to O.M. dated
16.04.2020 issued by the MoCA, it is the case of the petitioner
that the said Memorandum directs the airlines to refund value of
only those tickets that were booked during the lockdown period
by leaving vast majority of passengers who had booked tickets
before the flights were banned and also on the tickets which are
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W.P.(C)D.No.10966 of 2020 etc.
booked by the travel agents. It is the case of the petitioner that
as per the practice in vogue there are several travel agents who
have booked tickets to passengers even before receipt of fare
amount from the passengers and if the refunds are not made to
them, they will suffer undue hardship. While referring to the
situation of pandemic COVID19 globally, it is stated that
tourism industry is suffering from great financial losses and it is
further unlikely that people will travel for leisure activities in
near future, until the spread of COVID19 is contained fully. It is
the case of the petitioner that where the tickets are booked by
travel agents from their account, refund should be made in the
same manner and channel through which payments for tickets
have been received by the airline. It is alleged that such
directions would secure fair and expedient justice by avoiding
locking up of funds of the passengers as well as the members of
the petitionerFederation.
8. The first Writ Petition (C) being Diary No.10966 of 2020 is
filed by the Pravasi Legal Cell and other subsequent writ
petitions are also tagged with the same. Pursuant to order of this
Court, Airlines were impleaded as the party respondents, and
some Airlines and others have filed applications on their own for
intervening in the matter which were allowed by this Court.
Common affidavit was filed on behalf of respondents nos.1 and 2
11
W.P.(C)D.No.10966 of 2020 etc.
– Union of India and Directorate General of Civil Aviation in the
abovementioned writ petition. Individual affidavits were filed by
the impleaded respondents on behalf of the Airlines; Travel
Agents Federation of India and others who are allowed to be
impleaded as party respondents.
9. In the affidavit filed on behalf of respondent nos.1 and 2
while denying the various allegations made by the petitioners,
they have explained the existing legal regime with respect to
refund of fares and clarified the circumstances which led to
issuance of O.M. dated 16.04.2020. While referring to the
meetings held by the Ministry of Civil Aviation with the
representatives of Airlines, the affidavit discloses the concerns
highlighted during such meetings and indicated the proposed
workable solutions keeping in view the interests of passengers as
well as the airlines. The Ministry of Civil Aviation after
consulting all the stake holders arrived at certain formulations,
which were referred to in the affidavit and deals with various
situations, such as, for domestic airlines where tickets were
booked by the passengers directly with the airline; for domestic
airlines when the ticket had been booked through a travel agent,
by the passenger with the airlines; for international travel when
the ticket had been booked on an Indian carrier, when the
booking is for exIndia; and for international travel when the
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W.P.(C)D.No.10966 of 2020 etc.
tickets have been booked on a foreign carrier and the booking is
exIndia. The supplementary affidavit filed on behalf of
respondent nos.1 and 2 further clarified on categories of
passengers who are proposed to be covered and clarified the
period of booking of tickets and also with regard to the credit
shell. Further additional affidavit is also filed on behalf of the
said respondents further clarifying with regard to credit shell
proposals as proposed by the Government which were referred to
in the earlier affidavits. Detailed affidavits are filed on behalf of
the airlines and other stake holders who are impleaded as party
respondents.
10. We have heard Sri Sanjay Hegde, learned senior counsel
appearing for the petitionerPravasi Legal Cell in W.P.(C).Diary
No.10966 of 2020; Sri C.A. Sundaram, learned senior counsel
appearing for the petitioner in W.P.(C)No.570 of 2020; Ms. Sonal
Jain, learned counsel appearing for the petitioners in W.P.
(C)No.952 of 2020 and Sri Harshwardhan Bhende, learned
counsel appearing for the Travel Agents Federation of India; Sri
Tushar Mehta, learned Solicitor General appearing for the Union
of India; Sri Arvind P. Datar, learned senior counsel appearing for
Go Airlines (India) Ltd.; Sri Harish N. Salve, learned senior
counsel appearing for Spicejet Ltd.; Sri Mukul Rohtagi, learned
senior counsel appearing for Interglobe Aviation Ltd. (Indigo
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W.P.(C)D.No.10966 of 2020 etc.
Airline); Sri Pinaki Misra, learned senior counsel appearing for
Tata SIA Airlines Ltd. (Vistara Airlines) and Air Asia India Ltd.
and Sri Pallav Shishodia, learned senior counsel appearing for
the Indian Association of Tour Operators.
By considering the grievances amongst the airline
11.
passengers on the issue of refund of tickets by airlines, the
Directorate General of Civil Aviation has issued Civil Aviation
nd
Requirements by proceedings dated 22 May 2008. As indicated
in the said requirements when the tickets are purchased by
means of credit card payments, refund shall be made by airlines
within seven days of cancellation; in case of cash transactions
refund shall be made immediately; in case of purchase of tickets
through travel agents airline shall ensure that the refund process
is completed within 30 working days. Further directions were
issued to the airlines to refund all statutory taxes and User
Development Fee/Airport Development Fee/Passenger Service
Fee to the passengers in case of cancellation/nonutilisation of
tickets. Similar such Requirements are also issued by
proceedings dated 06.08.2010 which were revised on 27.02.2019
and clause 3.3 of the said Requirements deals with the issue
relating to ‘cancellation of flight’ and the obligations on the
airliner either to offer an alternate flight or refund the ticket as
acceptable to the passenger. In ordinary course the said
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W.P.(C)D.No.10966 of 2020 etc.
requirements are to be followed by the airliner whenever there is
a cancellation of tickets.
12. In view of peculiar situation which has arisen on account of
pandemic COVID19, to resolve the issues raised by the various
stake holders, while issuing notice this Court vide order dated
12.06.2020 has passed the following order :
“… … … …
WRIT PETITION(CIVIL) .. Diary No.(s).10966/2020
Issue notice. Mr. Rajat Nair, learned counsel
accepts notice on behalf of the Union of India.
Let notice be issued to the other respondents.
Mr. Tushar Mehta, learned Solicitor General
appearing for the Union of India may file counter
affidavit to the writ petition within two weeks from
today.
Learned Solicitor General submits that a
suggestion given by Mr. Harish Salve, learned
senior counsel that the Ministry of Aviation shall
call for a meeting with the airlines and sort out all
the issues is a welcome suggestion and steps shall
be taken by the Ministry of Aviation to do the
needful.
Liberty is given to the airlines to file counter
affidavit within three weeks.
… … … …”
13. In the affidavit filed on behalf of respondent nos.1 and 2 in
compliance of order dated 12.06.2020, filed by Director General
of Civil Aviation it is stated that after the order dated 12.06.2020
passed by this Court, a meeting was held on 02.07.2020 at 17:00
Hrs. under the Chairmanship of Secretary, Civil Aviation through
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W.P.(C)D.No.10966 of 2020 etc.
video conferencing, to discuss issues relating to refund of air
fares by airlines. As referred in the affidavit, the meeting was
attended by the following participants:
| Name and Designation | |
|---|---|
| MoCA: | |
| 1. | Shri Pradeep Singh Kharola, Secretary |
| 2. | Smt. Usha Padhee, Joint Secretary |
| 3. | Shri Amit Kumar Jha, SO |
| 4. | Shri Avinav Tiwari, ASO |
| DGCA: | |
| 5. | Shri Arun Kumar, DG |
| Airlines: | |
| 6. | Shri Vinay Dubey, CEO, Go Air |
| 7. | Shri Rajiv Bansal, CMD, Air India |
| 8. | Shri K. Shyam Sundar, CEO, Air India Express |
| 9. | Shri V. Hejmadi, Director Finance, Air India |
| 10. | Shri Melwin D’Silva, ED (Commercial), Air India |
| 11. | Shri Bhaskar Bhat, Chairman, Vistara |
| 12. | Shri Leslie Thng, CEO, Vistara |
| 13. | Shri Moin Wasil, Head (Regulations), Vistara |
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W.P.(C)D.No.10966 of 2020 etc.
| 14. | Shri Ankur Garg, CCO, Air Asia |
|---|---|
| 15. | Ms. Priya Mehra, Head (Legal), IndiGo |
| 16. | Shri Sanjay Gupta, Head (Commercial), IndiGo |
| 17. | Shri Chandan Sand, Spicejet |
A copy of the Minutes of the meeting dated 02.07.2020 is also
placed on record. Thereafter further followup meeting was held
on 08.07.2020. By referring to two more meetings held by the
Ministry on 11.07.2020 – one with Online Travel Agents and
other with TAAI/TAFI representatives, minutes of such meeting
are also placed on record. While explaining the existing legal
regime relating to refund of fares, it is stated that same is
governed by Civil Aviation Requirements, which recognise the
rights of air passengers to seek refund of their air tickets. While
referring to relevant provisions of the CARs of 22.05.2008 and
06.08.2010 as revised on 27.02.2019, it is stated that for
cancellation of flights due to force majeure (extraordinary
circumstances beyond the control of airline), though airline is not
obligated to pay any compensation but it is obligated to refund
the fare to the passengers. At the same time while referring to
the meetings held by the respondent nos.1 and 2 concerning the
issues which are raised by the passengers as well as the airlines,
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W.P.(C)D.No.10966 of 2020 etc.
and other stake holders it is stated if any enforcement action is
initiated by the DGCA for violations of CARs mentioned above,
same may result in reduction/suspension of approved schedule
of airline, who have already started operating their flights with
limited capacity. It is stated that any such strict enforcement
action against airline would further restrict/reduce their
operation and any such strict enforcement action may further
jeopardise the possibility of generation of cash by the airline
which can further adversely affect/delay the refund cycle. As
suggested by the respondents, the workable solutions keeping in
view the interests of both passengers as well as airlines the
following formulations are arrived at to harmonise the interests of
passengers and the viability of airlines to an extent. The said
formulations read as under:
“Formulations based on the discussions with
scheduled domestic airlines on refund of air fare
A. For domestic airlines when the ticket has been
booked directly by the passenger with the airline.
1. If the tickets have been booked during the first
th
lockdown period, i.e. 25 of March, 2020 to
th
14 of April, 2020 for the journeys to be
undertaken in both first and second lockdown
th rd
period i.e. from 25 of March, 2020 to 3 of
May, 2020, in all such cases, full refund shall
be given by the airlines immediately (this is
TH
being mandated vide MoCA’s OM dated 16
April, 2020 as the airlines were not supposed
to book such tickets).
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W.P.(C)D.No.10966 of 2020 etc.
2. For all other cases, the airlines shall make all
endeavours to refund the collected amount to
the passenger within 15 days.
3. If on account of financial distress, if the airlines
are not able to do so they shall provide a credit
shell equal to the amount of fare collected.
This credit shell shall be issued in the name of
the passenger who has booked the ticket.
a. The passenger shall be able to consume the
st
credit shell up to 31 March, 2021 on any
route of his choice. If the passenger wants
to buy a ticket of value more than the credit
shell, then he can use cash to top it up. If
he wants to buy a ticket of value less than
the credit shell, he/she can do so and the
balance amount of credit shell shall be
available to him/her.
b. There shall be an incentive mechanism to
compensate the passenger if there is a delay
in consuming the credit shell – from the date
th
of cancellation upto 30 June, 2020 the
value of credit shell shall be enhanced by
0.5% of the face value (the amount of fare
collected) for every month or part thereof
th
between the date of cancellation and 30
June, 2020. Thereafter, the value of credit
shell shall be enhanced by 0.75% of the face
value per month, up to March 2021.
c. The credit shell shall be transferable. The
passenger can transfer the credit shell to
any person, and the airlines shall honour
such a transfer. The airlines shall devise a
mechanism to facilitate such a transfer.
d. By the end of March, 2021, the Airlines shall
refund cash to the holder of the credit shell.
4. Notwithstanding what is stated above, the
airlines shall refund the full amount in case of
travellers who have since expired to the
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W.P.(C)D.No.10966 of 2020 etc.
account of the passenger or to his
representative.
B. For domestic airlines when the ticket has been
booked through a travel agent (including OTA) by
the passenger with the airline.
1. If the tickets have been booked during the
lockdown period for travel within the lockdown
period, in all such cases full refund shall be
given by the airlines immediately (this is being
th
mandated vide MoCA’s OM dated 16 April,
2020 as the airlines were not supposed to book
such tickets). This amount shall be passed on
immediately by the Agent to the passengers.
2. For all other cases, the airlines shall make all
endeavours to refund the collected amount
within 15 days. This amount shall be passed
on immediately by the Agent to the passengers.
3. If on account of financial distress, if the airlines
are not able to do so they shall provide a credit
shell equal to the amount of fare collected.
This credit shell shall be issued in the name of
the passenger who has booked the ticket. The
credit shell shall be transferred by the Agent to
the passengers (if booking is through an agent).
a. The passenger shall be able to consume the
st
credit shell up to 31 March, 2021 on any
route of his choice. If the passenger wants
to buy a ticket of value more than the credit
shell, then he can use cash to top it up. If
he wants to buy a ticket of value less than
the credit shell, he/she can do so and the
balance amount of credit shell shall be
available to him/her.
b. There shall be an incentive mechanism to
compensate the passenger if there is a delay
in consuming the credit shell – from the date
20
W.P.(C)D.No.10966 of 2020 etc.
th
of cancellation up to 30 June, 2020 the
value of credit shell shall be enhanced by
0.5% of the face value (the amount of fare
collected) for every month or part thereof
th
between the date of cancellation and 30
June, 2020. Thereafter, the value of credit
shell shall be enhanced by 0.75% of the face
value per month, up to March 2021.
c. The credit shell shall be transferable. The
passenger can transfer the credit shell to
any person, and the airlines shall honour
such a transfer. The airlines shall devise a
mechanism to facilitate such a transfer.
d. By the end of March, 2021, the Airlines shall
refund cash to the holder of the credit shell.
e. The travel agents shall be entitled for their
usual fees/service charges/commission.
4. Notwithstanding what is stated above, the
airlines shall refund the full amount in case of
persons who have since expired. This amount
shall be passed on immediately by the Agent to
the passengers.
C. For international travel when the ticket has been
booked on an Indian carrier and the booking is
exIndia
1. If the tickets have been booked during the
lockdown period for travel within the lockdown
period, in all such cases full refund shall be
given by the airlines immediately (this is being
th
mandated vide MoCA’s OM dated 16 April,
2020 as the airlines were not supposed to book
such tickets). This amount shall be passed on
immediately by the Agent to the passengers, as
the case may be.
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W.P.(C)D.No.10966 of 2020 etc.
2. For all other cases, the airlines shall make all
endeavours to refund the collected amount
within 15 days. This amount shall be passed
on immediately by the Agent to the passengers,
as the case may be.
3. If on account of financial distress, if the airlines
are not able to do so they shall provide a credit
shell equal to the amount of fare collected.
This credit shell shall be issued in the name of
the passenger who has booked the ticket. The
credit shell shall be transferred by the Agent to
the passengers (if booking is through an agent).
a. The passenger shall be able to consume the
st
credit shell up to 31 March, 2021 on any
route of his choice. If the passenger wants
to buy a ticket of value more than the credit
shell, then he can use cash to top it up. If
he wants to buy a ticket of value less than
the credit shell, he/she can do so and the
balance amount of credit shell shall be
available to him/her.
b. There shall be an incentive mechanism to
compensate the passenger if there is a delay
in consuming the credit shell – from the date
th
of cancellation up to 30 June, 2020 the
value of credit shell shall be enhanced by
0.5% of the face value (the amount of fare
collected) for every month or part thereof
th
between the date of cancellation and 30
June, 2020. Thereafter, the value of credit
shell shall be enhanced by 0.75% of the face
value per month, up to March 2021.
c. The credit shell shall be transferable. The
passenger can transfer the credit shell to
any person, and the airlines shall honour
such a transfer. The airlines shall devise a
mechanism to facilitate such a transfer.
22
W.P.(C)D.No.10966 of 2020 etc.
d. By the end of March, 2021, the Airlines shall
refund cash to the holder of the credit shell.
e. Notwithstanding what is stated above, the
airlines shall refund the full amount in case
of persons who have since expired. This
amount shall be passed on immediately by
the Agent to the passenger’s representative.
D. For international travel when the ticket has been
booked on a foreign carrier and the booking is ex
India
1. If the tickets have been booked during the
lockdown period for travel within the lockdown
period, in all such cases full refund shall be
given by the airlines immediately (this is being
th
mandated vide MoCA’s OM dated 16 April,
2020 as the airlines were not supposed to book
such tickets). This amount shall be passed on
immediately by the Agent to the passengers, as
the case may be.
2. For all other cases, the airlines shall refund the
collected amount to the passenger within 15
days. This amount shall be passed on
immediately by the Agent to the passengers. (If
the booking is through an agent).”
14. Further affidavit in the form of supplementary affidavit is
filed on behalf of respondent nos.1 and 2 which is more in the
nature of a clarificatory one on certain doubts expressed by the
learned counsel for the petitioners. While clarifying the category
of passengers who are proposed to be covered under the
proposed formulations mentioned in the earlier affidavit, it is
clarified that the following categories are covered:
23
W.P.(C)D.No.10966 of 2020 etc.
“(i) Passengers who had booked their tickets
directly from the domestic airline for domestic
travel;
(ii) Passengers who had booked their tickets
through a travel agent (including OTA) for
domestic airline for domestic travel;
(iii) International travel passengers who had
booked their ticket on an Indian carrier and
the booking is exIndia;
(iv) International travel passengers who had
booked their ticket on a foreign carrier and
the booking is exIndia.
Though the term exIndia is not defined in the
Aircraft Act, 1934 and the Aircraft Rules, 1937, but
in aviation industry this term denotes the flights
which are originating from India.”
Further clarification is also made on period of booking of tickets.
It is stated that the formulations suggested will cover category of
cases where passengers who have booked the tickets prior to
th
lockdown for travel upto 24 May 2020 and refund of fares to
passengers covered under this category shall be governed by the
proposed formulation relating to credit shell and incentive
scheme. Further, passengers who have booked tickets during
lockdown for travel during lockdown, such category of
passengers are entitled for immediate refund of fares by the
airline as the airlines were not supposed to book such tickets.
With regard to passengers who have booked tickets at any period
24
W.P.(C)D.No.10966 of 2020 etc.
th
of time but for travel after 24 May 2020 it is stated that the
passengers covered under this category shall be governed by the
provisions of CAR. While clarifying the issue raised by the tour
operators with regard to credit shell, it is stated that in this
category there are two types of purchase of ticket by the agents.
The first mode is that when initially passengers pay the money to
agent and agent purchases ticket for the passenger and the
second mode is the one where agent purchases the ticket for the
passengers through its advance deposit with the airline and the
passengers pay the money either at the time of consumption of
ticket or may be even after consumption of ticket. In the affidavit
it is made clear that even in cases where tickets are purchased
by tour operator, who has paid the money to the airline for
purchasing the ticket for the client but the client is yet to pay
that money to the agent, then on cancellation of ticket and
converting it into a credit shell, the ticket will remain in the name
of passenger and in case passenger utilises the credit shell he
will have to pay to the agent and not to the airline. However, in
st
case the passenger does not utilise the credit shell till 31 March
2021, then airline will have to refund the amount as per
proposed formulation and money will go back to the same
account of the agent from which the ticket amount was paid to
the airline. It is also clarified that in case passenger in whose
25
W.P.(C)D.No.10966 of 2020 etc.
st
name the ticket is booked does not utilise the credit shell till 31
March 2021, then the airline will have to refund with interest
prescribed in the formulation to the agent from whose account
the ticket was booked.
Referring to supplementary affidavit filed on behalf of
15.
respondent nos.1 and 2 learned counsel appearing for the agents
have submitted that when the tickets are purchased by the agent
for the passenger by paying their money which is yet to be
received from the passenger, there should not be any difficulty
for giving the credit shell in the name of the agent himself who
has purchased the ticket. When it was pointed out that as per
the supplementary affidavit filed by the respondent nos.1 and 2 it
was made clear that in cases where tickets were purchased by
agents for passengers, where credit shell is given in the name of
st
passenger, if it is not utilised before 31 March 2021 money will
be returned to the account of agent from whose account money
was paid to the airline, there should not be any difficulty in
issuing credit shell in the name of agent, the learned Solicitor
General obtained instructions in this regard and filed additional
th
affidavit on 24 September 2020 on behalf of respondent nos.1
and 2. In this affidavit, it is stated that the existing regulatory
mechanism recognises the contract between the passenger and
the airlines only, for a ticket which is purchased and for which a
26
W.P.(C)D.No.10966 of 2020 etc.
named passenger only can be accounted for in the ‘passenger
manifest’ of a schedule flight which is to be maintained as per
the best international practices and regulations. The travel
agent, if any, involved in the purchase of any ticket on behalf of
any passenger remains only a viamedia, leaving the principal
contract between the airline and the passenger only. Therefore,
the proposed formulation suggested earlier, only recognises the
contract between the airline and the passenger of a purchased
ticket. As such it is stated that credit shell is proposed to be
issued in the name of passengers only who have booked their
tickets through agents and it is not feasible to issue a credit shell
in the name of agent, as much as ticket was purchased in the
name of passenger but at the same time it is clearly stated that if
st
such voucher is not used before 31 March 2021 as per the
formulation, money has to be paid back by the airliner through
the same account from which they have received money.
16. In view of such formulations which are arrived at during
the course of meetings held by the respondent nos.1 and 2 with
other stake holders, airlines etc., it is submitted that
substantially their grievances stand resolved but at the same
time certain issues were raised during the course of hearing.
17. Sri Sanjay Hegde, learned senior advocate appearing for the
Pravasi Legal Cell has submitted that in view of the proposals as
27
W.P.(C)D.No.10966 of 2020 etc.
mentioned in the affidavit filed by the respondent nos.1 and 2,
their grievances are substantially redressed but at the same time
he has submitted that for the bookings made for foreign air travel
through Indian carriers outside the country, same formulation as
proposed by the respondent nos.1 and 2 can be applied. Sri C.A.
Sundaram, learned senior counsel appearing for the Air
Passengers Association of India has submitted that whatever the
mode they have booked, all passengers are entitled for refund
immediately. It is submitted that the problems faced by the
airlines is no ground for not refunding the money which is paid
by the passengers. Sri Harshwardhan Bhende, learned counsel
appearing for the Travel Agents Federation of India has
submitted that when the tickets are booked by travel agents by
investing their money on behalf of the passengers there is no
reason for not issuing credit shell in the name of agents. Sri
Pallav Shishodia, learned senior counsel appearing for Indian
Association of Tour Operators has contended that, when tickets
are booked by agents, there is no reason for not issuing credit
shell in the name of agents. It is further submitted that in case
st
credit shell is not utilised by 31 of March 2021, refund has to
come back to the same account of the agent, from which account
money is paid for bookings.
28
W.P.(C)D.No.10966 of 2020 etc.
18. Shri Harish Salve, learned senior counsel appearing for
Spicejet Ltd., in view of the stand of respondent nos.1 and 2 in
their first affidavit, has stated that the formulations arrived at as
mentioned in the affidavit are by and large acceptable to his
client. Sri Rohtagi, learned senior counsel appearing for Indigo
Airlines, also has submitted that the suggestions/ formulations
as suggested in the affidavit filed on behalf of respondent nos.1
and 2 are acceptable. Shri Pinaki Misra, learned senior counsel
appearing for Tata SIA Airlines Ltd. (Vistara Airlines) and Air Asia
India Ltd. has submitted that the incentive mechanism suggested
for enhancing the face value of the credit shell, in the affidavit
filed by respondent nos.1 and 2 itself is reasonable and no higher
amount of interest may be considered on the refund. Sri Arvind
Datar, learned senior counsel appearing for Go Airlines India Ltd.
by drawing our attention to the detailed affidavit filed on its
behalf has submitted that COVID19 is an existential threat to
commerce generally, and to airlines in particular. It is submitted
that in developed countries airline industry has been able to
secure itself more broadbased State relief (whether by bailout or
otherwise, including dispensations from refunds). However, no
comparable measures have yet been introduced in India. By
referring to facts and figures as mentioned in the affidavit,
learned senior counsel has submitted that airlines is one of the
29
W.P.(C)D.No.10966 of 2020 etc.
worst affected sectors on account of pandemic COVID19.
th
Learned counsel drew our attention to the Report dated 09 June
2020, of IATA (the worldwide Aviation Industry Association) on
the economic performance of the airline industry. In its report,
after predicting a worldwide US$ 434 billion drop in airline
revenue and related indirect tax receipts and a 50.6% fall in
passenger demand it further states that GDP growth is likely to
contract by 5.0% in 2020; COVID19 will have a significant
impact on international trade (a 13% decline); 2020 will be the
worst year in the history of airlines with net losses of $84.3
billion; and 32 million jobs supported by aviation are at risk etc.
Referring to the severe liquidity crunch faced by airlines it is
st
submitted that if the credit shells are not utilised by 31 March
2021, it is not possible to refund the money as ordered and
learned counsel has requested to extend the time to encash
st
credit shell at least upto 31 March 2022 to balance the equities.
19. Though the various contentious issues are raised on both
sides and at the same time the suggestions/formulations as
suggested by respondent nos.1 and 2 in the affidavits filed before
this Court are by and large acceptable to the majority of stake
holders. In ordinary course modalities and timelines for refund
on cancellation of tickets are governed by, the Civil Aviation
nd th
Requirements, i.e. CAR dated 22 May 2008; 06 August 2010
30
W.P.(C)D.No.10966 of 2020 etc.
th
as revised on 27 February 2019, and the said Requirements are
issued by the competent authority in exercise of powers under
the provisions of Aircrafts Act, 1934 and the Rules made
thereunder. But at the same time we cannot lose sight of the
present situation prevailing in the country and across the globe,
i.e. the effect of pandemic COVID19. 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.
Added to the same, air passenger traffic has come down heavily
and which is gradually being restored. 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. Strict
enforcement of Civil Aviation Requirements at this moment may
not yield any meaningful result for any stake holder. In view of
the suggestions and formulations arrived at in the meetings held
by respondent nos.1 and 2, which are acceptable to the majority
of stake holders, have to be implemented in letter and spirit. We
also feel that such formulations are workable solutions in these
peculiar circumstances which are prevailing in the country. The
grievances which are raised on behalf of agents can be taken care
by this Court by issuing appropriate directions wherever
31
W.P.(C)D.No.10966 of 2020 etc.
bookings are made by them, so as to see that their interest is
safeguarded. Sri Arvind Datar, learned senior counsel, though
has argued to extend the timelines for encashment of credit shell
st
at least up to 31 March 2022 or any other shorter period but we
are not inclined to accept the same, keeping in mind that the
passengers who, with the hope of travel, have booked their
tickets by spending their own money. For these reasons we are
not inclined to delve any further on any of the contentions and
deem it appropriate to dispose of this batch of cases with the
following directions:
1. If a passenger has booked a ticket during the
th th
lockdown period (from 25 March, 2020 to 24 May,
2020) 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.
2. 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.
On such refund, the amount shall be passed on
immediately by the agent to the passengers.
32
W.P.(C)D.No.10966 of 2020 etc.
3. Passengers who booked tickets at any period
th
of time but for travel after 24 May, 2020 – refund of
fares to the passengers covered under this category
shall be governed by the provisions of Civil Aviation
Requirements (CAR).
4. Even for international travel, when the tickets
have been booked on an Indian carrier and the
booking is exIndia, if the tickets have been booked
during the lockdown period for travel within the
lockdown period, immediate refund shall be made.
5. If the tickets are booked for international
travel on a foreign carrier and the booking is exIndia
during the lockdown period for travel within the
lockdown period, full refund shall be given by the
airlines and said amount shall be passed on
immediately by the agent to the passengers,
wherever such tickets are booked through agents. In
all other cases airline shall refund the collected
amount to the passenger within a period of three
weeks.
6. In all other cases, 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
st
consume the same on or before 31 March, 2021. It
is open to the passenger either to utilize such credit
33
W.P.(C)D.No.10966 of 2020 etc.
st
shell upto 31 March, 2021 on any route of his
choice or the passenger can transfer the credit shell
to any person including the travel agent through
whom he / she has booked the ticket and the
airlines shall honour such a transfer.
6.1. The credit shell issued in the name of the
passenger shall be transferable which can be utilized
st
upto 31 March, 2021 and the concerned airline
shall honour such a transfer by devising a
mechanism to facilitate such a transfer. 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. It is also made clear
that even in cases where credit shell is transferred to
third party, same is to be utilized only through the
agent who has booked the ticket at the first instance.
7. In cases where passengers have purchased
the ticket through an agent, and credit shell is
issued in the name of passenger, such credit shell is
to be utilized only through the agent who has booked
the ticket. In cases where tickets are booked
through agent, credit shell as issued in the name of
st
the passenger which is not utilized by 31 March,
2021, refund of the fare collected shall be made to
the same account from which account amount was
received by the airline.
8. In all cases where credit shell is issued there
shall be an incentive to compensate the passenger
th
from the date of cancellation upto 30 June, 2020 in
which event the credit shell shall be enhanced by
34
W.P.(C)D.No.10966 of 2020 etc.
0.5% of the face value (the amount of fare collected)
for every month or part thereof between the date of
th
cancellation and 30 June, 2020. Thereafter the
value of the credit shell shall be enhanced by 0.75%
st
of the face value per month upto 31 March, 2021.
Further, the second respondentDirectorate, shall ensure strict
compliance of the directions referred above, by issuing necessary
instructions to the all concerned.
20. With the above directions, these writ petitions are disposed
of.
………….………………………………...J.
[ASHOK BHUSHAN]
….…………………………………………J.
[R. SUBHASH REDDY]
….…………………………………………J.
[M.R. SHAH]
New Delhi.
October 01, 2020.
35