Summary
The Court prescribed a pandemic-specific framework for cancelled-flight refunds, distinguishing bookings and travel during lockdown from later travel and other cases. Financially distressed airlines could issue transferable, enhanced-value credit shells in the residual category, usable until 31 March 2021, with safeguards for agent bookings and refunds. The Court refused a longer credit-shell period and directed DGCA to secure compliance rather than deciding every broader contention.
Issues
- What refund and credit-shell arrangements should govern flight cancellations affected by the 2020 lockdown.
- How passengers’ refund rights and travel agents’ interests should be accommodated alongside airline financial distress.
Held
- Ordinary refunds are governed by Civil Aviation Requirements. Given the exceptional pandemic conditions and the likely effect of immediate strict enforcement on operations and cash generation, the Court adopted the broadly accepted workable formulations with operative modifications, declining to extend credit-shell validity to March 2022. (¶¶ 11, 19)
- For tickets booked during 25 March–24 May 2020 for travel during that period, full refund without cancellation charges was required within three weeks of cancellation. Agent-booked tickets in that category required immediate airline refund and immediate onward payment. Travel after 24 May remained governed by CAR irrespective of booking date. (¶ 19)
- For international ex-India bookings on Indian carriers during lockdown for lockdown travel, refund was immediate. Foreign-carrier ex-India lockdown bookings for lockdown travel likewise required full refund and immediate agent pass-through where applicable; the direction prescribed three weeks for the other foreign-carrier cases. (¶¶ 14, 19)
- In the residual category, airlines must endeavour to refund within 15 days of judgment; financial inability permitted a fare-equivalent credit shell in the passenger’s name, whether booked directly or through an agent. It could be used on a chosen route or transferred, including to the original agent, by 31 March 2021. Airlines had to facilitate and honour transfers. (¶ 19)
- An agent-booked ticket’s credit shell, including after third-party transfer, had to be used through the original agent. Unused shells after 31 March 2021 required refund to the original paying account. These safeguards protected agents without issuing shells in their own names in the first instance. (¶¶ 14, 15, 19)
- Credit-shell value was to increase by 0.5% of face value for each month or part from cancellation through 30 June 2020, then by 0.75% per month through 31 March 2021. DGCA was directed to issue instructions ensuring strict compliance. (¶ 19)
Result
Writ petitions disposed of with the specified refund, credit-shell, transfer and incentive directions and DGCA compliance supervision. The framework addressed the identified pandemic cancellations and did not establish a general replacement for ordinary CAR refunds.