Is proposal to refund air tickets confined to bookings made during lockdown, asks SC

There is “no catch” and it includes flights cancelled during the period, says Solicitor General

The Supreme Court on Wednesday asked the government to clarify whether its proposal to refund air tickets is confined to flight bookings made during the lockdown.

A Bench led by Justice Ashok Bhushan asked the Ministry of Civil Aviation to respond to doubts raised by senior advocate Sanjay Hegde whether the proposal also encompassed air bookings made prior to the lockdown for journeys during the pandemic freeze.

Solicitor General Tushar Mehta assured the court there was “no catch” in the proposal mooted by the Ministry.

“It includes flights cancelled during the lockdown,” Mr. Mehta submitted while agreeing to clarify.

The law officer said “tickets will have to be refunded”.

Bone of contention

The bone of contention is a line in the proposal which says “for all the other cases, the airlines shall make all endeavours to refund the collected amount to the passenger within 15 days”.

Mr. Hegde indicated that the phraseology “for all other cases” is too open-ended. He pointed out that while the proposal obligates airlines to fully and immediately refund tickets booked during the lockdown, it does not clearly indicate if bookings made before the lockdown are included. Does “all other cases” mean bookings prior to lockdown, he asked.

The Solicitor General said the proposal “essentially takes care of the interests of the passengers as well as ensures that airlines do not suffer immediately”.

The proposal recommends immediate refund of air tickets. It also allows airlines to open credit shells in the name of passengers. Passengers can use the credit shell to fly any route. The credit is transferable. If the credit is not used, the ticket amount has to be mandatorily returned to passenger by March 31, 2021.

Time to file replies

Senior advocate Harish Salve, for Spice Jet, said “We are happy with the proposal.” Senior advocate Mukul Rohatgi, for Indigo, said the proposal was “by and large okay, but some tweaking is required”. Senior advocate Pinaki Misra, for Vistara, said he needed time to go through the proposal. The court allowed the airlines time to file replies. It listed the case for hearing on September 23.

Justice M.R. Shah, on the Bench, however asked the government what would happen if the flight of a passenger flying on his credit shell is suddenly cancelled.

“What if you [airlines] cancel his flight? Will he be forced to pay for another flight?” Justice Shah asked.

Justice Bhushan asked, “If normal flights are going on then, should there not be a normal mode of refund?”

In its latest affidavit, the Directorate General of Civil Aviation (DGCA) has said non-refund of fares or creation of “involuntary credit shell” by airlines amounts to violation of aviation law and policy, including the Aircraft Rules of 1937 and the Civil Aviation Requirements (CARs).

“The policy of the Central government is that every individual passenger has a right to seek refund of those tickets, the flight for which was cancelled without any fault of his/her. It is stated that non-refund of fare amounts to violation of provisions of the CARs,” the DGCA has said.

But the Directorate has also reasoned that an enforcement action against an already financially distressed sector now would prove counter-productive and harm the “Indian aviation as a whole”.

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