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SUPREME COURT OF INDIA
ASHOK BHUSHAN, R. SUBHASH REDDY, M.R. SHAH, JJ.
Pravasi Legal Cell & Ors. – Petitioners
Versus
Union of India & Ors. – Respondents
Writ Petition (C) No. of 2020 [Diary No. 10966 of 2020] With Writ Petition (C) No. 570 of 2020; Writ Petition (C) No. 595 of 2020; And Writ Petition (C) No. 952 of 2020
Decided On : 01-10-2020
Corona Pandemic – Cancellation of flights – Public Interest Litigation seeking direction for full refund of amount of cancelled tickets of domestic and international flights – As per Civil Aviation Requirements (CAR) of May 2008 when 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 – If a passenger has booked a ticket during lockdown period (from 25th March, 2020 to 24th May, 2020) for travel during lockdown period and airline has received payment for booking of air ticket for travel during same period, for both domestic and international air travel and refund is sought by passenger against that booking being cancelled, airline shall refund full amount collected without any cancellation charges – Refund shall be made within a period of three weeks from date of cancellation – If tickets have been booked during lockdown period through a travel agent for a travel within lockdown period, in all such cases full refund shall be given by airlines immediately – On such refund, amount shall be passed on immediately by agent to passengers – Passengers who booked tickets at any period of time but for travel after 24th May, 2020 –refund of fares to passengers covered under this category shall be governed by provisions of Civil Aviation Requirements (CAR) – Even for international travel, when tickets have been booked on an Indian carrier and booking is ex-India, if tickets have been booked during lockdown period for travel within lockdown period, immediate refund shall be made – If tickets are booked for international travel on a foreign carrier and the booking is ex-India during lockdown period for travel within lockdown period, full refund shall be given by airlines and said amount shall be passed on immediately by agent to passengers, wherever such tickets are booked through agents – In all other cases airline shall refund collected amount to passenger within a period of three weeks – In all other cases, airlines shall make all endeavours to refund collected amount to passenger within 15 days from 1-10-2020 – If on account of financial distress, any airline / airlines are not able to do so, they shall provide credit shell, equal to amount of fare collected, in name of passenger when booking is done either directly by passenger or through travel agent so as to consume the same on or before 31st March, 2021 – It is open to passenger either to utilize such credit shell upto 31st March, 2021 on any route of his choice or passenger can transfer credit shell to any person including travel agent through whom he / she has booked the ticket and airlines shall honour such a transfer – Credit shell issued in name of passenger shall be transferable which can be utilized upto 31st March, 2021 and the concerned airline shall honour such a transfer by devising a mechanism to facilitate such a transfer – Such credit shell can be utilized by concerned agent through whom ticket is booked, for third party use – Even in cases where credit shell is transferred to third party, same is to be utilized only through agent who has booked ticket at first instance – In cases where passengers have purchased ticket through an agent, and credit shell is issued in name of passenger, such credit shell is to be utilized only through agent who has booked ticket – In cases where tickets are booked through agent, credit shell as issued in the name of passenger which is not utilized by 31st March, 2021, refund of fare collected shall be made to same account from which account amount was received by airline – In all cases where credit shell is issued there shall be an incentive to compensate passenger from date of cancellation upto 30th June, 2020 in which event credit shell shall be enhanced by 0.5% of face value (amount of fare collected) for every month or part thereof between date of cancellation and 30th June, 2020 – Thereafter value of credit shell shall be enhanced by 0.75% of face value per month upto 31st March, 2021 – Directorate shall ensure strict compliance of these directions by issuing necessary instructions to all concerned. [Constitution of India – Article 32] (Paras 11 and 19)
Facts of the case:
Present Writ Petition 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 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 COVID19 as arbitrary and in violation of Civil Aviation Requirements, issued by the Directorate General of Civil Aviation. A consequential relief is sought to direct the respondents to refund the full amount upon such cancellations. it is allegation of the petitioners that though it is obligatory on the part of the respondent-airlines, operating domestic as well as international flights, to refund 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.
Findings of Court:
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 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.
Result : Writ Petitions disposed of with directions.
JUDGMENT :
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 25th March 2020 to 14th 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 03rd 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 COVID-19 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 shape of Office Memorandum dated 16th April 2020. The advisory issued read as under:
“3. … … … …
(i) If a passenger has booked a ticket during the first lockdown period (from 25th 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 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 25th of March to 14th of April 2020) for travel during the second lockdown period (from 15th of April to 3rd 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 Aviation. 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 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 t
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