Supreme Court reserves order in plea seeking refund of airfare for tickets booked during COVID-19 lockdown

The Supreme Court today reserved orders in the plea seeking refund for airline tickets booked during the COVID-19 lockdown..The order was reserved by a Bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah..When the matter was taken up today, Solicitor General Tushar Mehta clarified the Centre's stand that the credit shell facility could not be availed by travel agents who booked tickets during lockdown. He said,"So far as travel agents are concerned, we cannot regulate them. We don't have control over it. But suggestion is that a passenger can use the credit shell only through the agent."Justice Reddy then asked,"If the voucher (credit shell) is not used till the deadline, will the money go to the account of the agent?"SG Mehta replied that the government could not control contractual obligations between agents and passengers."We can recognise two agencies because they are recognisable - passengers and airlines. We have done our best to ensure that the passenger either gets the money back or gets the voucher which is transferable.".On how transferability of these vouchers can take effect, the Court went on to ask,"If the passenger surrenders the voucher before the agent and the same is refunded?"Mehta responded,"We have no problem with that if the passenger gets their money back by surrendering the voucher which is surrendered before the agent.".Appearing for the travel agents, Senior Advocate Pallav Shishodia then pointed out that passengers have paid the money not to the airline, but to agents. He also informed the Court that there are many cases where the agents have paid in advance to the airline to book tickets. He argued,"Insolvency of airline cannot be saved at the expense of our insolvency."The Court then said,"Your interest is protected because if the voucher is not used then the money will be deposited in your account."However, Shishodia pointed out that they would have to wait till March 2021 for that..Appearing for GoAir, Senior Advocate Arvind Datar said that airlines were facing massive losses and that while having "frozen working capital", they were left to bear the burden of paying refunds.In response, Justice Bhushan said,"But that is your airline's problem, how can you hold up passengers' money?".Senior Advocate Aryama Sundaram added that whatever problems the airlines were having should not hamper the rights of the passengers. .Datar then said,"We are not saying we won't refund, but March 31, 2021 is an unrealistic deadline. We are only seeking some relaxation."He added that GoAir had a total liability of ₹300 crore in refunds, of which ₹40 crore was already refunded."From 100% flights I'm at 60% flights in operation as in September", he went on to say..After hearing the other counsel, the Court proceeded to reserve it verdict in the matter..The Court had earlier asked the Centre to file an additional affidavit clarifying how travel agents will make good the loss incurred by them if the refund of airline fare for tickets booked during the lockdown is made directly to passengers..This week, the Directorate General of Civil Aviation (DGCA) informed the Supreme Court that the credit shell facility for tickets booked during the lockdown period will only be applicable to passengers who could not avail flights and that no such credit shell would be given to the travel agents.The Centre has also informed the Court that the refund for air tickets will only be applicable for flights originating in India, both domestic and international. It has clarified that there cannot be any refund for flights originating out of India, irrespective of whether it is an Indian carrier or an international carrier coming into India..No Credit Shell for travel agents as it's a private contract, refund only for passengers: DGCA tells Supreme Court.In its fresh affidavit, the DGCA has stated in clear terms that when a passenger has a purchased ticket from a travel agent which has already been paid for by the passenger to the agent, then "either the credit shell or the tickets in lieu of Credit Shell goes to the passenger directly.".The Centre states that as per the extant regulations, this lump-sum payment of money by a travel agent or a corporate house on behalf of his client, either in advance or after availing the flight services, is not recognized as a contract of purchase of tickets under the Civil Aviation Rules (CAR). The same remains in the realm of private contract between the parties..The DGCA further said that the ambit of the regulatory mechanism of the DGCA does not cover international flights that originate from any foreign destination."... the said flights are governed by the regulatory mechanism of the country of origin, irrespective of the fact whether the carrier is Indian or not.".Earlier, the DGCA has categorised passengers into three categories:For those who made bookings prior to lockdown for a period up till May 24, the refund would be governed by the credit shell scheme and the incentives thereunder.For bookings made during lockdown for travelling during lockdown, refund shall be made by airlines immediately "as the airlines were not supposed to book such tickets."For bookings that were made for travelling on dates after May 24, the refund would be governed by the Civil Aviation Requirements (CAR).The threshold of May 24 is set for dividing the passengers in these categories since operation of domestic air travel had begun in a calibrated manner May 25 onwards..Refund for Tickets booked for Air Travel during lockdown: Who will be eligible for refunds? DGCA clarifies in affidavit before SC.The DGCA also elaborated on the credit shell scheme. It was stated in the initial affidavit,"...if the Tour operator has already paid the money to the airline for purchasing the ticket for the client but the client is yet to pay that money to the agents, then on cancellation of ticket and converting it in to credit shell, the ticket will remain in the name of passenger and in case passenger utilizes the credit shell he will pay to the agent and not to the airline.However, in case the passenger does not utilise the credit shell till 31st Mar 2021, then the airline will have to refund the amount as per proposed formulation and money will go back to same account of the agent from which the ticket amount was paid to the airline."