Pravasi Legal Cell & Ors. v. Union of India & Ors.
R. SUBHASH REDDY, J.
1. Background facts, and relief sought for, in this batch of 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 COVID-19, has adversely affected
the economy globally, in several sectors. Our country – India – and civil
aviation sector is not an exception to the same. To contain the pandemic
situation of COVID-19, first lockdown was imposed by the Government
of India, from 25 th March 2020 to 14 th April 2020. In view of such
lockdown, a ban on operation of all domestic and international flights
was imposed. The lockdown period was further extended upto 03 rd 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 loc kdown
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 COVID-19 and its consequential effect on the air passengers
and airlines, by examining the grievances received from various quarters,
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
issued an advisory to all stake holders in civil aviation sector in the shape
of Office Memorandum dated 16 th April 2020. The advisory issued read
as under:
“3. … … … …
(i) If a passenger has booked a ticket during the first lo ckdown
period (from 25 th of March to 14 of April, 2020) and the
airline has received payment for booking of the air ticke t
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 three weeks from the date of request
of cancellation.
(ii) If a passenger has booked a ticket during the first l ockdown
period and the airline has received the payment for booking
of air ticket during first lockdown period (from 25th of March
to 14 th of April 2020) for travel during the second lockdown
period (from 15 th of April to 3 rd 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 respondent-
airlines, 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 COVID-19 as arbitrary and in violation of Civil Aviation
Requirements, issued by the Directorate General of Civil Avi ation. A
consequential relief is sought to direct the respondents to refund the full
amount upon such cancellations.
109
4. In this writ petition, it is the allegation of the pet itioners that
though it is obligatory on the part of the respondent-airlines, 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
COVID-19, 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 h ad
booked tickets before the flights were banned. It is th e 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 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 liti gation 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 petitioner-Association
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 amount in ‘Credit Shell’ by the airline shall be the prerogative
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
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 air lines 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 wr it 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 flig hts, 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
COVID-19 is arbitrary and illegal with a consequential direction to refund
the same.
6. W.P.(C)No.952 of 2020 is filed by Col. Ashok Prehar (Retd.)
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 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.AI-173 to
travel to San Francisco, United States of America from Ne w Delhi on
08.05.2020 with a return flight AI-102 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, dur ing the
111
lockdown period from 25.03.2020 to 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 w ho 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 tha t 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.
7. W.P.(C)No.595 of 2020 is filed by Travel Agents Federation of
India, a society registered under the Societies Registrati on 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 directi on 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, petitioner-Federation seeks direct ions against the
Ministry of Civil Aviation and Directorate General of Civil Aviation, for
issuance of appropriate directions to airlines for full re fund 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 st ated that there are
many passengers who had booked their flights through travel a gents
who are the members of the present petitioner. While stati ng that the
flight booking process through travel agents is distinct from passengers
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
who have booked the tickets directly from the airline. It is the allegation
of the petitioner that instead of refunding the amount deposited by the
travel agents with the airlines they are compelling the tr avel agents/
passengers to accept the facility of ‘Credit Shell’, whi ch 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 She ll’
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 pet itioner
that non-refund of the amount by airlines for the t ickets 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 b y
leaving vast majority of passengers who had booked tickets before the
flights were banned and also on the tickets which are booked b y the
travel agents. It is the case of the petitioner that as pe r 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 hards hip.
While referring to the situation of pandemic COVID-19 glo bally, 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 COVID-19 is contained fully. It is the case of
the petitioner that where the tickets are booked by trav el 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 petitioner-Federation.
8. The first Writ Petition (C) being Diary No.10966 of 2020 is
filed by the Pravasi Legal Cell and other subsequent writ petit ions are
also tagged with the same. Pursuant to order of this Court, Airlines were
113
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 o n behalf of
respondents nos.1 and 2 – 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, t hey have
explained the existing legal regime with respect to refund of fares and
clarified the circumstances which led to issuance o f 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 consu lting 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 directl y 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 ex-India; and for international travel when the tickets ha ve been
booked on a foreign carrier and the booking is ex-I ndia. The
supplementary affidavit filed on behalf of respondent nos.1 and 2 further
clarified on categories of passengers who are proposed t o 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 petitioner-Pravasi 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
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
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 seni or 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 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.
11. By considering the grievances amongst the airline passengers
on the issue of refund of tickets by airlines, the Direct orate General of
Civil Aviation has issued Civil Aviation Requirements by proceedings
dated 22 nd 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 pu rchase 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 Develop ment Fee/
Airport Development Fee/Passenger Service Fee to the pass engers in
case of cancellation/non-utilisation 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 acc eptable to the
passenger. In ordinary course the said requirements are to be followe d
by the airliner whenever there is a cancellation of tickets.
12. In view of peculiar situation which has arisen on account of
pandemic COVID-19, 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.
115
Mr. Tushar Mehta, learned Solicitor General appearing for
the Union of India may file counter affidavit to the writ petiti on
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. u nder the
Chairmanship of Secretary, Civil Aviation through 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:
N a m e a n d D e s ig n a tio n
M o C A :
1 . S h ri P r a d e e p S in g h K h a r o la , S e cr e ta r y
2 . S m t . U s h a P a d h e e, J o in t S e c r eta r y
3 . S h ri A m i t K u m a r J h a , S O
4 . S h ri A v i n a v T iw a ri , A S O
D G C A :
5 . S h ri A r u n K u m a r , D G
A ir lin e s:-
6 . S h ri V in a y D u b e y , C E O , G o A ir
7 . S h ri R a ji v B a n s a l, C M D , A ir I n d ia
8 . S h ri K . S h y a m S u n d a r , C E O , A ir In d ia E x p re s s
9 . S h ri V . H ej m a d i, D ir e cto r F i n a n ce , A ir I n d ia
1 0 . S h ri M e lw in D ’ S ilv a , E D ( C o m m e rc ia l) , A i r
In d i a
1 1 . S h ri B h a s k ar B h a t, C h a ir m a n , V ista r a
1 2 . S h ri L e s lie T h n g , C E O , V is ta r a
1 3 . S h ri M o in W a s il, H e a d ( R e g u la tio n s ) , V is ta ra
1 4 . S h ri A n k u r G a rg , C C O , A i r A s ia
1 5 . M s . P riy a M e h ra , H e a d (L e g a l) , In d iG o
1 6 . S h ri S a n j a y G u p ta , H e a d ( C o m m er c ia l) , I n d iG o
1 7 . S h ri C h a n d a n S a n d , S p ic e je t
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
A copy of the Minutes of the meeting dated 02.07.2020 is also
placed on record. Thereafter further follow-up 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 a nd 2
concerning the issues which are raised by the passengers as well as the
airlines, 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 li mited capacity. It is
stated that any such strict enforcement action against airline would further
restrict/reduce their operation and any such strict enforceme nt 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 formula tions are
arrived at to harmonise the interests of passengers and the vi ability 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 lockdown
period, i.e. 25 th of March, 2020 to 14 th of April, 2020 for the
journeys to be undertaken in both first and second lockdown
period i.e. from 25 th of March, 2020 to 3 rd of May, 2020, in
all such cases, full refund shall be given by the airlines
117
immediately (this is being mandated vide MoCA’s OM dated
16 TH April, 2020 as the airlines were not supposed to book
such tickets).
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 credit shell
up to 31 st 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 of cancellation upto 30 th 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 between the date of cancellation
and 30 th 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 account of the passenger or to his
representative.
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
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 per iod
for travel within the lockdown period, in all such cases fu ll
refund shall be given by the airlines immediately (this is being
mandated vide MoCA’s OM dated 16 th 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 ende avours 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 credit shel l up
to 31 st 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 of cancellation up to 30 th 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 between the date of cancellation and 30 th 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 ca n
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.
119
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 ex-India
1. If the tickets have been booked during the lockdown per iod
for travel within the lockdown period, in all such cases fu ll
refund shall be given by the airlines immediately (this is being
mandated vide MoCA’s OM dated 16 th 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 make all ende avours 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 credit shel l up
to 31 st 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 –
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
from the date of cancellation up to 30 th 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 between the date of cancellation and 30 th 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 ca n
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. 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 per iod
for travel within the lockdown period, in all such cases fu ll
refund shall be given by the airlines immediately (this is being
mandated vide MoCA’s OM dated 16 th 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 natu re 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:
121
“(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 t icket
on an Indian carrier and the booking is ex-India;
(iv) International travel passengers who had booked their ti cket
on a foreign carrier and the booking is ex-India.
Though the term ex-India 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 loc kdown for
travel upto 24 th 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 of time but for travel
after 24 th May 2020 it is stated that the passengers covered under thi s
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 ti cket 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 pass engers
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 t he 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
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
and not to the airline. However, in case the passenger does n ot utilise
the credit shell till 31 st 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 name the
ticket is booked does not utilise the credit shell till 31 st 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.
15. Referring to supplementary affidavit filed on behal f of
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 recei ved 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. W hen it
was pointed out that as per the supplementary affidavit fi led by the
respondent nos.1 and 2 it was made clear that in cases where t ickets
were purchased by agents for passengers, where credit shell is given in
the name of passenger, if it is not utilised before 31 st March 2021 money
will be returned to the account of agent from whose account mone y
was paid to the airline, there should not be any difficulty in issuing credit
shell in the name of agent, the learned Solicitor G eneral obtained
instructions in this regard and filed additional affidavit on 24 th September
2020 on behalf of respondent nos.1 and 2. In this affidavit, it is st ated
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 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
via-media, 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 p roposed to be
issued in the name of passengers only who have booked their t ickets
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 such voucher is not used before
31 st March 2021 as per the formulation, money has to be paid back by
the airliner through the same account from which they have re ceived
money.
123
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 thei r grievances
stand resolved but at the same time certain issues were r aised 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
mentioned in the affidavit filed by the respondent nos.1 and 2, thei r
grievances are substantially redressed but at the sam e time he has
submitted that for the bookings made for foreign air travel through Indian
carriers outside the country, same formulation as p roposed by the
respondent nos.1 and 2 can be applied. Sri C.A. Sundaram, learned
senior counsel appearing for the Air Passengers Associati on 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 coun sel
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
credit shell is not utilised by 31 st of March 2021, refund has to come
back to the same account of the agent, from which account mo ney is
paid for bookings.
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, l earned senior
counsel appearing for Indigo Airlines, also has submit ted 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 mechanis m 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
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
interest may be considered on the refund. Sri Arvind Datar, l earned
senior counsel appearing for Go Airlines India Ltd. by dra wing our
attention to the detailed affidavit filed on its behalf has sub mitted that
COVID-19 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 broad-based State relief (whether by
bail-out 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 worst affected sectors on account
of pandemic COVID-19. Learned counsel drew our attention to the
Report dated 09 th June 2020, of IATA (the world-wide Aviation Industry
Association) on the economic performance of the airline industry. In its
report, after predicting a world-wide 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;
COVID-19 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 ai rlines it is
submitted that if the credit shells are not utilised by 31 st March 2021, it is
not possible to refund the money as ordered and learned counsel has
requested to extend the time to encash credit shell at least upto
31 st 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 suggest ed by
respondent nos.1 and 2 in the affidavits filed before this Court a re 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 Requirements, i.e. CAR dated 22 nd May 2008;
06 th August 2010 as revised on 27 th 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
COVID-19. It cannot be disputed that the civil aviation sector, which is
one of the important sectors, is seriously affected in vie w of the ban
imposed for operating flights. Added to the same, air passenger tra ffic
has come down heavily and which is gradually being restored. At this
125
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 airl ines which can
further adversely affect/delay the refund cycle. Strict en forcement 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, whic h 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 c are by
this Court by issuing appropriate directions wherever 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 timeline s for
encashment of credit shell at least up to 31 st March 2022 or any other
shorter period but we are not inclined to accept the sa me, keeping in
mind that the passengers who, with the hope of travel, have booked their
tickets by spending their own money. For these reasons w e are not
inclined to delve any further on any of the contentions and de em it
appropriate to dispose of this batch of cases with the following directions:
1. If a passenger has booked a ticket during the lockdown period
(from 25 th March, 2020 to 24 th 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 dat e 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.
3. Passengers who booked tickets at any period of time but for
travel after 24 th May, 2020 – refund of fares to the passengers
covered under this category shall be governed by the provisions
of Civil Aviation Requirements (CAR).
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]
4. Even for international travel, when the tickets have been booked
on an Indian carrier and the booking is ex-India, 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 ex-India 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 end eavours 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 31 st March, 2021. It is open
to the passenger either to utilize such credit shell upto 31 st 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 upto 31 st March, 2021 and the
concerned airline shall honour such a transfer by devisi ng 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 ma de
clear that even in cases where credit shell is transferred t o 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 throu gh
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 the passenger which is not utilized
127
by 31 st 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 from the date of cancellatio n upto
30 th June, 2020 in which event the credit shell shall be enhanced
by 0.5% of the face value (the amount of fare collected) for every
month or part thereof between the date of cancellatio n and
30 th June, 2020. Thereafter the value of the credit shell shall b e
enhanced by 0.75% of the face value per month upto 31 st March,
2021.
Further, the second respondent-Directorate, shall ensure strict
compliance of the directions referred above, by issui ng necessary
instructions to the all concerned.
20. With the above directions, these writ petitions are disposed of.
Divya Pandey Writ petitions disposed of.
PRA VASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.
[R. SUBHASH REDDY, J.]