PRAVASI LEGAL CELL & ORS. versus UNION OF INDIA & ORS. on 1 October 2020

1. If a passenger has booked a ticket during the lockdownperiod (from 25[th] March, 2020 to 24[th] May, 2020) for travelFduring lockdown period and the airline has receivedpayment for booking of air ticket for travel during the sameperiod, for both domestic and international air travel andthe refund is sought by the passenger against that bookingbeing cancelled, the airline shall refund the full amountcollected without any cancellation charges. The refund shallGbe made within a period of three weeks from the date ofcancellation.

2. If the tickets have been booked during the lockdownperiod through a travel agent for a travel within thelockdown period, in all such cases full refund shall be givenHby the airlines immediately. On such refund, the amount shall be passed on immediately by the agent to thepassengers.

3. Passengers who booked tickets at any period of timebut for travel after 24[th] May, 2020 – refund of fares to thepassengers covered under this category shall be governedby the provisions of Civil Aviation Requirements (CAR).

4. Even for international travel, when the tickets have beenbooked on an Indian carrier and the booking is ex-India, ifthe tickets have been booked during the lockdown periodfor travel within the lockdown period, immediate refundshall be made.

5. If the tickets are booked for international travel on aforeign carrier and the booking is ex-India during thelockdown period for travel within the lockdown period, fullrefund shall be given by the airlines and said amount shallbe passed on immediately by the agent to the passengers,wherever such tickets are booked through agents. In allother cases airline shall refund the collected amount to thepassenger within a period of three weeks.

6. In all other cases, the airlines shall make all endeavoursto refund the collected amount to the passenger within 15days from today. If on account of financial distress, anyairline / airlines are not able to do so, they shall providecredit shell, equal to the amount of fare collected, in thename of passenger when the booking is done either directlyby the passenger or through travel agent so as to consumethe same on or before 31[st] March, 2021. It is open to thepassenger either to utilize such credit shell upto 31[st] March,2021 on any route of his choice or the passenger cantransfer the credit shell to any person including the travelagent through whom he / she has booked the ticket andthe airlines shall honour such a transfer.

6.1. The credit shell issued in the name of the passengershall be transferable which can be utilized upto 31[st] March,2021 and the concerned airline shall honour such a transferby devising a mechanism to facilitate such a transfer. It isalso made clear that such credit shell can be utilized by the AB

C

D

E

F

G

H

Aconcerned agent through whom the ticket is booked, forthird party use. It is also made clear that even in caseswhere credit shell is transferred to third party, same is tobe utilized only through the agent who has booked the ticketat the first instance.

B7. In cases where passengers have purchased the ticketthrough an agent, and credit shell is issued in the name ofpassenger, such credit shell is to be utilized only throughthe agent who has booked the ticket. In cases where ticketsare booked through agent, credit shell as issued in the nameof the passenger which is not utilized by 31[st] March, 2021,Crefund of the fare collected shall be made to the sameaccount from which account amount was received by theairline.

8. In all cases where credit shell is issued there shall be anincentive to compensate the passenger from the date ofDcancellation upto 30[th] June, 2020 in which event the creditshell shall be enhanced by 0.5% of the face value (theamount of fare collected) for every month or part thereofbetween the date of cancellation and 30[th] June, 2020.Thereafter the value of the credit shell shall be enhancedEby 0.75% of the face value per month upto 31[st] March, 2021.

Further, the second respondent-Directorate, shall ensurestrict compliance of the directions referred above, by issuingnecessary instructions to the all concerned. [Para 19][124-E-H;125-A-H; 126-A-H; 127-A-C]FCIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No.1131 of 2020.

[Under Article 32 of the Constitution of India]

With

GW.P.(C) No. 570, 595 and 952 of 2020.

Tushar Mehta, SG, Sanjay Hegde, C.A. Sundaram, Arvind P. Datar,Pinaki Misra, Mukul Rohatgi, Huzefa Ahmadi, Pallav Shishodia, Sr. Advs,Jose Abraham, M.P. Srivignesh, Blessan Mathews, Ms. Liz Mathew,Ms. Sonal Jain, Zafar Inayat, Ms. Rohini Musa, Abhishek Gupta,HMs. Jaikriti S. Jadeja, Rohit Anil Rathi, Rajat Nair, Kanu Agrawal,

Ms. Swati Ghildiyal, Ashok Panigrahi, B.V. Balram Das, Rohan Kelkar,Prateek K Chadha, Ms. Neela Gokhale, Harshwardhan Bhende,Ms. Anannya Ghosh, Ms. Neetica Sharma, MV Kini & Associates, MohitSingh, Ms. Samridhi Hota, Ms. Kanika Singhal, Turab Ali Kazmi,Ms. Saloni Agarwal, Atul Sharma, Sanjay Gupta, Uday Gupta, AbhishekSharma, Ms. Shivani Lal, Ashly Cherian, Hiren Dasan, M.K. Tripathi,Ms. Harshita Agarwal, Vivek Singh, Amit Kumar Mishra, ShashankManish, Ms. Smriti Shah, Ms. Twinkle Kataria, Ms. Nidhi Sahay, MaheshAgarwal, Ankur Saigal, E.C. Agrawala, Kunal Cheema, Ms. Aditi Parkhi,Ms. Ankita Agarwal, Ms. Apeksha Rai, Ms. Akansha Rai, Ms. ShwetaYadav, Ms. Yashoda Katiyar, Nandlal Kumar Mishra, Sandeep Mishra,Dr. Ajay Kumar, Dr. Sanjay Gupta, Pramod Kumar, Rajendra SinghChouhan, Kaushal Yadav, Puneet Jain, Harsh Jain, Harshit Khanduja,Ms. Christi Jain, Shirish Deshpande, Ms. Pooja Joshi, Dr. Archana Sabnis,A. Karthik, Ms. Anushka Pardikar, Brijesh Saxena, Shail Kumar Dwivedi,Siddharth Krishna Dwivedi, Ms. Vibha Dwivedi, Ms. Anjana Gosain,Anant Agrawal, Ms. Shalini Nair, Ms. Sweta Rani, Advs. for theappearing parties.

The Judgment of the Court was delivered by

R. SUBHASH REDDY, J.

1. Background facts, and relief sought for, in this batch of cases issimilar, as such all these cases are heard together and are being disposedof by this common judgment.

2. The pandemic situation of COVID-19, has adversely affectedthe economy globally, in several sectors. Our country – India – and civilaviation sector is not an exception to the same. To contain the pandemicsituation of COVID-19, first lockdown was imposed by the Governmentof India, from 25[th] March 2020 to 14[th] April 2020. In view of suchlockdown, a ban on operation of all domestic and international flightswas imposed. The lockdown period was further extended upto 03[rd] May2020, with the ban continuing on operation of all domestic and internationalflights. There was an issue of refund of air fare during the lockdownperiod, when domestic and international flights’ operation was suspended.The Ministry of Civil Aviation (MoCA), while acknowledging the unusualsituation that has arisen due to the lockdown imposed, to contain furtherspread of COVID-19 and its consequential effect on the air passengersand airlines, by examining the grievances received from various quarters, AB

C

D

E

F

G

H

Aissued an advisory to all stake holders in civil aviation sector in the shapeof Office Memorandum dated 16[th] April 2020. The advisory issued readas under:

“3. … … … …

(i) If a passenger has booked a ticket during the first lockdownBperiod (from 25[th] of March to 14 of April, 2020) and theairline has received payment for booking of the air ticketduring the first lockdown period for travel during the sameperiod, for both domestic and international air travel andrefund is sought by the passenger against that booking beingCcancelled, the Airline shall refund the full amount collectedwithout levy of cancellation charge. The refund shall bemade within a period of three weeks from the date of requestof cancellation.

(ii) If a passenger has booked a ticket during the first lockdownDperiod and the airline has received the payment for bookingof air ticket during first lockdown period (from 25[th] of Marchto 14[th] of April 2020) for travel during the second lockdownperiod (from 15[th] of April to 3[rd] of May, 2020) for bothdomestic and international air travel and the passenger seeksrefund on cancellation of the ticket, the Airline shall refundEthe full amount collected without levy of cancellation charge.The refund shall be made within a period of three weeksfrom the date of request of cancellation.”

In the same Memorandum, Government has issued directions toDirectorate General of Civil Aviation to monitor the compliance of suchFadvisories referred above.

3. Writ Petition(C) being Diary No.10966 of 2020 is filed by asociety registered under Societies Registration Act, 1860 by way of publicinterest litigation, to declare the action on the part of the respondent-airlines, operating domestic as well as international flights in India, in notGrefunding the full amount collected for the tickets, due to the cancellationof flights in the wake of restrictions imposed by the Government of Indiato contain COVID-19 as arbitrary and in violation of Civil AviationRequirements, issued by the Directorate General of Civil Aviation. Aconsequential relief is sought to direct the respondents to refund the fullamount upon such cancellations.H

4. In this writ petition, it is the allegation of the petitioners thatthough it is obligatory on the part of the respondent-airlines, operatingdomestic as well as international flights, to refund the full amount collectedfor the tickets which are not utilised in view of the cancellation of flightsin the wake of restrictions imposed by Government of India to containCOVID-19, respondents are providing a credit shell with the validity ofone year, which is contrary to Civil Aviation Requirements (CAR) ofMay 2008. It is alleged that as per the CAR, the option of holding refundamount in credit shell by the airlines shall be prerogative of the passengerand not a default practice of the airline. While referring to O.M. dated16.04.2020 issued by the MoCA, it is alleged that the said Memorandumdeals only with the refund for the tickets that were booked during thelockdown period and leaves out the majority of passengers who hadbooked tickets before the flights were banned. It is the case of thepetitioners that by issuing O.M. dated 16.04.2020, the Government hasindirectly approved the practice of airlines for providing Credit Shell forthe tickets booked before the lockdown was declared and the same is inviolation of CAR. By further alleging that the time lines for refund asmentioned in the O.M. dated 16.04.2020 runs contrary to CAR, petitionershave sought relief by way of directions to the respondents to refund fullamount collected for the tickets booked, any time for travel.

5. W.P.(C)No.570 of 2020 is filed by Air Passengers Associationof India, which is also in the nature of public interest litigation underArticle 32 of the Constitution of India, seeking directions to various airlinesoperating both – domestic and international flights – to refund the ticketamounts collected from the passengers of the flights which are cancelledon account of lockdown, with a consequential direction to the respondentsto refund the same without levying any charges on account of cancellationetc. In this writ petition also, it is the allegation of the petitioner-Associationthat, the CARs have been issued in exercise of powers under provisionsof Aircrafts Act, 1934, to implement the Convention relating toInternational Civil Aviation standards and recommended practices butsame is not being followed to refund the fare amount in view of thecancellation of flights. By further detailing the dates of lockdown declaredby the Government, it is alleged that the action on the part of the airlinesin providing ‘Credit Shell’ instead of refunding the full amount collectedfor the tickets cancelled on account of cancellation of flights, is in clearviolation of CARs. The petitioner also alleges that the option of holdingthe refund amount in ‘Credit Shell’ by the airline shall be the prerogative AB

C

D

E

F

G

H

Aof passenger not a default practice of the airline. While referring to therepresentation filed by it on 24.05.2020, and various complaints receivedfrom the numerous passengers regarding the actions of the airlines innot refunding the amounts spent by them on air tickets, it is alleged thatthe action of the respondents in withholding the amounts spent by themon air tickets is illegal and contrary to CAR. In this writ petition it isBalleged that the several airlines are not acting as per the O.M. dated16.04.2020 in refunding the amounts as directed and issuing ‘Credit Shell’instead of refund. With the aforesaid allegations, petitioner also seeksdirections by way of declaration that the actions on the part of the airlines,which are operating domestic as well as international flights, in notCrefunding the full amount for the tickets due to cancellation of flights inthe wake of restrictions imposed by the Government of India to containCOVID-19 is arbitrary and illegal with a consequential direction to refundthe same.

6. W.P.(C)No.952 of 2020 is filed by Col. Ashok Prehar (Retd.)Dand another seeking quashing of O.M. dated 16.04.2020 issued by theMinistry of Civil Aviation and also seeking a declaration that the denialof refund by the third respondent – Air India Ltd. – for tickets bookedby them on 18.12.2019 to travel to United States of America on08.05.2020 with a return ticket to India on 05.06.2020, as illegal, arbitraryand contrary to CARs. They seek directions to refund the full amount ofERs.1,66,434/- collected by respondent no.3 for the tickets booked bythem on 18.12.2019. In this writ petition it is the case of the petitionersthat, petitioner no.1 is a senior citizen who has served in Indian Army for27 years and retired as a Colonel and the petitioner no.2 is his wife andon 18.12.2019 they have booked tickets to Air India Flight No.AI-173 toFtravel to San Francisco, United States of America from New Delhi on08.05.2020 with a return flight AI-102 from New York to New Delhi on05.06.2020 for an amount of Rs.1,66,434/-. While referring to the advisoryissued by the United States of America, by way of Advisory dated19.03.2020 recommending to avoid any travel and the proceedings issued by the Director General of Civil Aviation, Government of India for banningGflights during the lockdown period, it is alleged that in view of cancellationof flights they had no option but to cancel their tickets by seeking refundof the amount. In this writ petition it is the specific case of the petitionersthat 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 cancellationHcharges for the bookings made and payment received only, during the

lockdown period from 25.03.2020 to 03.05.2020, as illegal. It is allegedthat the said Memorandum leaves out a majority of passengers includingthe petitioners who had booked their tickets to travel to United States ofAmerica, much earlier to restrictions imposed to control the spread ofCORONA virus. Pleading discrimination for the passengers who hadbooked tickets during the lockdown period, and the passengers who hadbooked tickets earlier, petitioners seek quashing of O.M. dated 16.04.2020by further declaration that denial of legitimate refund to the petitionersby the airlines is patently unfair and also states that the action of thethird respondent in offering ‘Credit Shell’ instead of refund is unreasonableand unjustified. It is also pleaded that in view of their age and the pandemicsituation in the world, the travel for leisure is likely to remain restrictedin the foreseeable future. Petitioners, while pleading that giving ‘CreditShell’ vouchers without refunding the full fare to the petitioners, as soughtby them, runs contrary to CAR, allege that the denial of refund by thirdrespondent amounts to unjust enrichment at the expense of the petitionersand similarly placed persons. With the aforesaid allegations, petitionersseek quashing of O.M. dated 16.04.2020, with a consequential directionto refund the full amount of Rs.1,66,434/- collected by the third respondentfor the flights booked by them on 18.12.2019.

7. W.P.(C)No.595 of 2020 is filed by Travel Agents Federation ofIndia, a society registered under the Societies Registration Act, 1860seeking declaration that the action on the part of the airlines operatingdomestic as well as international flights in India, in refusing to refund thefull amount collected for tickets to travel during the period of ban on airtravel, as illegal and arbitrary with a consequential direction to therespondents to facilitate refunds of the amounts received by the airlinestowards the booking of tickets during the period of ban on air travel. Inthis writ petition, petitioner-Federation seeks directions against theMinistry of Civil Aviation and Directorate General of Civil Aviation, forissuance of appropriate directions to airlines for full refund on ticketsbooked for travel during the lockdown on account of their cancellation.It is the allegation of the petitioners that there are certain ambiguities inthe O.M. dated 16.04.2020 and 19.04.2020, which are being used by theairlines to avoid payment of refund, as sought by the passengers towardsthe cancellation of flights. In writ petition, it is stated that there aremany passengers who had booked their flights through travel agentswho are the members of the present petitioner. While stating that theflight booking process through travel agents is distinct from passengers AB

C

D

E

F

G

H

AB

C

D

E

F

G

H

Awho have booked the tickets directly from the airline. It is the allegationof the petitioner that instead of refunding the amount deposited by thetravel agents with the airlines they are compelling the travel agents/passengers to accept the facility of ‘Credit Shell’, which compels thebookings to be rescheduled instead of cancellation. While pleading thatthere is no certainty in rescheduling the travel plans, petitioner-FederationBhas questioned the action of the respondents in offering ‘Credit Shell’and seeks directions for refund of full amount in lieu of cancellation oftickets. In the writ petition, by giving details of various orders passed bythe Government and also the Directorate General of Civil Aviation banningthe flights during the lockdown period and ban imposed on operation ofCdomestic as well as international flights, it is the case of the petitionerthat non-refund of the amount by airlines for the tickets due tocancellation, is illegal and contrary to CAR. While referring to the CARsissued by DGCA and Rule 133A of the Aircraft Rules, it is alleged thatholding the refund amount in credit shell by the airlines is the prerogativeof the passenger and not a default practice of the airline. With referenceDto O.M. dated 16.04.2020 issued by the MoCA, it is the case of thepetitioner that the said Memorandum directs the airlines to refund valueof only those tickets that were booked during the lockdown period byleaving vast majority of passengers who had booked tickets before theflights were banned and also on the tickets which are booked by theEtravel agents. It is the case of the petitioner that as per the practice invogue there are several travel agents who have booked tickets topassengers even before receipt of fare amount from the passengers andif the refunds are not made to them, they will suffer undue hardship.While referring to the situation of pandemic COVID-19 globally, it isstated that tourism industry is suffering from great financial losses and itFis further unlikely that people will travel for leisure activities in nearfuture, until the spread of COVID-19 is contained fully. It is the case ofthe petitioner that where the tickets are booked by travel agents fromtheir account, refund should be made in the same manner and channelthrough which payments for tickets have been received by the airline. ItGis alleged that such directions would secure fair and expedient justice byavoiding locking up of funds of the passengers as well as the membersof the petitioner-Federation.

8. The first Writ Petition (C) being Diary No.10966 of 2020 isfiled by the Pravasi Legal Cell and other subsequent writ petitions areHalso tagged with the same. Pursuant to order of this Court, Airlines were impleaded as the party respondents, and some Airlines and others havefiled applications on their own for intervening in the matter which wereallowed by this Court. Common affidavit was filed on behalf ofrespondents nos.1 and 2 – Union of India and Directorate General ofCivil Aviation in the abovementioned writ petition. Individual affidavitswere filed by the impleaded respondents on behalf of the Airlines; TravelAgents Federation of India and others who are allowed to be impleadedas party respondents.

9. In the affidavit filed on behalf of respondent nos.1 and 2 whiledenying the various allegations made by the petitioners, they haveexplained the existing legal regime with respect to refund of fares andclarified the circumstances which led to issuance of O.M. dated16.04.2020. While referring to the meetings held by the Ministry of CivilAviation with the representatives of Airlines, the affidavit discloses theconcerns highlighted during such meetings and indicated the proposedworkable solutions keeping in view the interests of passengers as wellas the airlines. The Ministry of Civil Aviation after consulting all thestake holders arrived at certain formulations, which were referred to inthe affidavit and deals with various situations, such as, for domesticairlines where tickets were booked by the passengers directly with theairline; for domestic airlines when the ticket had been booked through atravel agent, by the passenger with the airlines; for international travelwhen the ticket had been booked on an Indian carrier, when the bookingis for ex-India; and for international travel when the tickets have beenbooked on a foreign carrier and the booking is ex-India. Thesupplementary affidavit filed on behalf of respondent nos.1 and 2 furtherclarified on categories of passengers who are proposed to be coveredand clarified the period of booking of tickets and also with regard to thecredit shell. Further additional affidavit is also filed on behalf of the saidrespondents further clarifying with regard to credit shell proposals asproposed by the Government which were referred to in the earlieraffidavits. Detailed affidavits are filed on behalf of the airlines and otherstake holders who are impleaded as party respondents.

10. We have heard Sri Sanjay Hegde, learned senior counselappearing for the petitioner-Pravasi Legal Cell in W.P.(C).DiaryNo.10966 of 2020; Sri C.A. Sundaram, learned senior counsel appearingfor the petitioner in W.P.(C)No.570 of 2020; Ms. Sonal Jain, learnedcounsel appearing for the petitioners in W.P.(C)No.952 of 2020 and Sri AB

C

D

E

F

G

H

AHarshwardhan Bhende, learned counsel appearing for the Travel AgentsFederation of India; Sri Tushar Mehta, learned Solicitor General appearingfor the Union of India; Sri Arvind P. Datar, learned senior counselappearing for Go Airlines (India) Ltd.; Sri Harish N. Salve, learned seniorcounsel appearing for Spicejet Ltd.; Sri Mukul Rohtagi, learned seniorcounsel appearing for Interglobe Aviation Ltd. (Indigo Airline); Sri PinakiBMisra, learned senior counsel appearing for Tata SIA Airlines Ltd. (VistaraAirlines) and Air Asia India Ltd. and Sri Pallav Shishodia, learned seniorcounsel appearing for the Indian Association of Tour Operators.

11. By considering the grievances amongst the airline passengerson the issue of refund of tickets by airlines, the Directorate General ofCCivil Aviation has issued Civil Aviation Requirements by proceedingsdated 22[nd] May 2008. As indicated in the said requirements when thetickets are purchased by means of credit card payments, refund shall bemade by airlines within seven days of cancellation; in case of cashtransactions refund shall be made immediately; in case of purchase ofDtickets through travel agents airline shall ensure that the refund processis completed within 30 working days. Further directions were issued tothe airlines to refund all statutory taxes and User Development Fee/Airport Development Fee/Passenger Service Fee to the passengers incase of cancellation/non-utilisation of tickets. Similar such Requirementsare also issued by proceedings dated 06.08.2010 which were revised onE27.02.2019 and clause 3.3 of the said Requirements deals with the issuerelating to ‘cancellation of flight’ and the obligations on the airliner eitherto offer an alternate flight or refund the ticket as acceptable to thepassenger. In ordinary course the said requirements are to be followedby the airliner whenever there is a cancellation of tickets.

F

12. In view of peculiar situation which has arisen on account ofpandemic COVID-19, to resolve the issues raised by the various stakeholders, while issuing notice this Court vide order dated 12.06.2020 haspassed the following order :

“… … … …

G

WRIT PETITION(CIVIL) .. Diary No.(s).10966/2020

Issue notice. Mr. Rajat Nair, learned counsel accepts noticeon behalf of the Union of India.

Let notice be issued to the other respondents.

H

PRAVASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.[R. SUBHASH REDDY, J.]

Mr. Tushar Mehta, learned Solicitor General appearing forthe Union of India may file counter affidavit to the writ petitionwithin two weeks from today.

A

Learned Solicitor General submits that a suggestion givenby Mr. Harish Salve, learned senior counsel that the Ministry ofAviation shall call for a meeting with the airlines and sort out allthe issues is a welcome suggestion and steps shall be taken by theMinistry of Aviation to do the needful.

B

Liberty is given to the airlines to file counter affidavit withinthree weeks.

C

… … … …”

13. In the affidavit filed on behalf of respondent nos.1 and 2 incompliance of order dated 12.06.2020, filed by Director General of CivilAviation it is stated that after the order dated 12.06.2020 passed by thisCourt, a meeting was held on 02.07.2020 at 17:00 Hrs. under theChairmanship of Secretary, Civil Aviation through video conferencing,Dto discuss issues relating to refund of air fares by airlines. As referred inthe affidavit, the meeting was attended by the following participants:

E

F

G

H

AA copy of the Minutes of the meeting dated 02.07.2020 is alsoplaced on record. Thereafter further follow-up meeting was held on08.07.2020. By referring to two more meetings held by the Ministry on11.07.2020 – one with Online Travel Agents and other with TAAI/TAFIrepresentatives, minutes of such meeting are also placed on record. Whileexplaining the existing legal regime relating to refund of fares, it is statedBthat same is governed by Civil Aviation Requirements, which recognisethe rights of air passengers to seek refund of their air tickets. Whilereferring to relevant provisions of the CARs of 22.05.2008 and06.08.2010 as revised on 27.02.2019, it is stated that for cancellation offlights due to force majeure (extraordinary circumstances beyond theCcontrol of airline), though airline is not obligated to pay any compensationbut it is obligated to refund the fare to the passengers. At the same timewhile referring to the meetings held by the respondent nos.1 and 2concerning the issues which are raised by the passengers as well as theairlines, and other stake holders it is stated if any enforcement action isinitiated by the DGCA for violations of CARs mentioned above, sameDmay result in reduction/suspension of approved schedule of airline, whohave already started operating their flights with limited capacity. It isstated that any such strict enforcement action against airline would furtherrestrict/reduce their operation and any such strict enforcement actionmay further jeopardise the possibility of generation of cash by the airlineEwhich can further adversely affect/delay the refund cycle. As suggestedby the respondents, the workable solutions keeping in view the interestsof both passengers as well as airlines the following formulations arearrived at to harmonise the interests of passengers and the viability ofairlines to an extent. The said formulations read as under:

F“Formulations based on the discussions with scheduled domesticairlines on refund of air fare

--------------------------------------------------------------------------

A. For domestic airlines when the ticket has been booked directlyby the passenger with the airline.

G

1. If the tickets have been booked during the first lockdownperiod, i.e. 25[th] of March, 2020 to 14[th] of April, 2020 for thejourneys to be undertaken in both first and second lockdownperiod i.e. from 25[th] of March, 2020 to 3[rd] of May, 2020, inall such cases, full refund shall be given by the airlines H

immediately (this is being mandated vide MoCA’s OM dated16[TH] April, 2020 as the airlines were not supposed to booksuch tickets).

2. For all other cases, the airlines shall make all endeavours torefund the collected amount to the passenger within 15 days.

3. If on account of financial distress, if the airlines are notable to do so they shall provide a credit shell equal to theamount of fare collected. This credit shell shall be issued inthe name of the passenger who has booked the ticket.

a. The passenger shall be able to consume the credit shellup to 31[st] March, 2021 on any route of his choice. If thepassenger wants to buy a ticket of value more than thecredit shell, then he can use cash to top it up. If hewants to buy a ticket of value less than the credit shell,he/she can do so and the balance amount of credit shellshall be available to him/her.

b. There shall be an incentive mechanism to compensatethe passenger if there is a delay in consuming the creditshell – from the date of cancellation upto 30[th] June, 2020the value of credit shell shall be enhanced by 0.5% ofthe face value (the amount of fare collected) for everymonth or part thereof between the date of cancellationand 30[th] June, 2020. Thereafter, the value of credit shellshall be enhanced by 0.75% of the face value per month,up to March 2021.

c. The credit shell shall be transferable. The passengercan transfer the credit shell to any person, and the airlinesshall honour such a transfer. The airlines shall devise amechanism to facilitate such a transfer.

d. By the end of March, 2021, the Airlines shall refundcash to the holder of the credit shell.

4. Notwithstanding what is stated above, the airlines shallrefund the full amount in case of travellers who have sinceexpired to the account of the passenger or to hisrepresentative.

A

B

C

D

E

F

G

AB. For domestic airlines when the ticket has been booked througha travel agent (including OTA) by the passenger with the airline.

1. If the tickets have been booked during the lockdown periodfor travel within the lockdown period, in all such cases fullrefund shall be given by the airlines immediately (this is beingBmandated vide MoCA’s OM dated 16[th] April, 2020 as the airlineswere not supposed to book such tickets). This amount shall bepassed on immediately by the Agent to the passengers.

2. For all other cases, the airlines shall make all endeavours torefund the collected amount within 15 days. This amount shallCbe passed on immediately by the Agent to the passengers.

3. If on account of financial distress, if the airlines are not able todo so they shall provide a credit shell equal to the amount offare collected. This credit shell shall be issued in the name ofthe passenger who has booked the ticket. The credit shell shallDbe transferred by the Agent to the passengers (if booking isthrough an agent).

a. The passenger shall be able to consume the credit shell upto 31[st] March, 2021 on any route of his choice. If thepassenger wants to buy a ticket of value more than theEcredit shell, then he can use cash to top it up. If he wants tobuy a ticket of value less than the credit shell, he/she cando so and the balance amount of credit shell shall be availableto him/her.

b. There shall be an incentive mechanism to compensate theFpassenger if there is a delay in consuming the credit shell –from the date of cancellation up to 30[th] June, 2020 the valueof credit shell shall be enhanced by 0.5% of the face value(the amount of fare collected) for every month or partthereof between the date of cancellation and 30[th] June,2020. Thereafter, the value of credit shell shall be enhancedGby 0.75% of the face value per month, up to March 2021.

c. The credit shell shall be transferable. The passenger cantransfer the credit shell to any person, and the airlines shallhonour such a transfer. The airlines shall devise amechanism to facilitate such a transfer.

H

d. By the end of March, 2021, the Airlines shall refund cashto the holder of the credit shell.

A

e. The travel agents shall be entitled for their usual fees/servicecharges/commission.

4. Notwithstanding what is stated above, the airlines shall refundthe full amount in case of persons who have since expired.This amount shall be passed on immediately by the Agent tothe passengers.

B

C. For international travel when the ticket has been booked on anIndian carrier and the booking is ex-India C

1. If the tickets have been booked during the lockdown periodfor travel within the lockdown period, in all such cases fullrefund shall be given by the airlines immediately (this is beingmandated vide MoCA’s OM dated 16[th] April, 2020 as the airlineswere not supposed to book such tickets). This amount shall bepassed on immediately by the Agent to the passengers, as theDcase may be.

2. For all other cases, the airlines shall make all endeavours torefund the collected amount within 15 days. This amount shallbe passed on immediately by the Agent to the passengers, asthe case may be.

E

3. If on account of financial distress, if the airlines are not able todo so they shall provide a credit shell equal to the amount offare collected. This credit shell shall be issued in the name ofthe passenger who has booked the ticket. The credit shell shallbe transferred by the Agent to the passengers (if booking isthrough an agent).

F

a. The passenger shall be able to consume the credit shell upto 31[st] March, 2021 on any route of his choice. If thepassenger wants to buy a ticket of value more than thecredit shell, then he can use cash to top it up. If he wants tobuy a ticket of value less than the credit shell, he/she cando so and the balance amount of credit shell shall be availableto him/her.

G

b. There shall be an incentive mechanism to compensate thepassenger if there is a delay in consuming the credit shell –

H

from the date of cancellation up to 30[th] June, 2020 the valueof credit shell shall be enhanced by 0.5% of the face value(the amount of fare collected) for every month or partthereof between the date of cancellation and 30[th] June,2020. Thereafter, the value of credit shell shall be enhancedby 0.75% of the face value per month, up to March 2021.

A

B

c. The credit shell shall be transferable. The passenger cantransfer the credit shell to any person, and the airlines shallhonour such a transfer. The airlines shall devise amechanism to facilitate such a transfer.

d. By the end of March, 2021, the Airlines shall refund cashto the holder of the credit shell.

C

e. Notwithstanding what is stated above, the airlines shallrefund the full amount in case of persons who have sinceexpired. This amount shall be passed on immediately byDthe Agent to the passenger’s representative.

D. For international travel when the ticket has been booked on aforeign carrier and the booking is ex-India

1. If the tickets have been booked during the lockdown periodfor travel within the lockdown period, in all such cases fullErefund shall be given by the airlines immediately (this is beingmandated vide MoCA’s OM dated 16[th] April, 2020 as the airlineswere not supposed to book such tickets). This amount shall bepassed on immediately by the Agent to the passengers, as thecase may be.

F2. For all other cases, the airlines shall refund the collected amountto the passenger within 15 days. This amount shall be passedon immediately by the Agent to the passengers. (If the bookingis through an agent).”

14. Further affidavit in the form of supplementary affidavit is filedGon behalf of respondent nos.1 and 2 which is more in the nature of aclarificatory one on certain doubts expressed by the learned counsel forthe petitioners. While clarifying the category of passengers who areproposed to be covered under the proposed formulations mentioned inthe earlier affidavit, it is clarified that the following categories are covered:

H

“(i)Passengers who had booked their tickets directly from theAdomestic airline for domestic travel;

(ii) Passengers who had booked their tickets through a travelagent (including OTA) for domestic airline for domestictravel; B

(iii) International travel passengers who had booked their ticketon an Indian carrier and the booking is ex-India;

(iv) International travel passengers who had booked their ticketon a foreign carrier and the booking is ex-India.

Though the term ex-India is not defined in the Aircraft Act, 1934and the Aircraft Rules, 1937, but in aviation industry this termdenotes the flights which are originating from India.”

C

Further clarification is also made on period of booking of tickets.It is stated that the formulations suggested will cover category of caseswhere passengers who have booked the tickets prior to lockdown fortravel upto 24[th] May 2020 and refund of fares to passengers coveredunder this category shall be governed by the proposed formulation relatingto credit shell and incentive scheme. Further, passengers who havebooked tickets during lockdown for travel during lockdown, such categoryof passengers are entitled for immediate refund of fares by the airline asthe airlines were not supposed to book such tickets. With regard topassengers who have booked tickets at any period of time but for travelafter 24[th] May 2020 it is stated that the passengers covered under thiscategory shall be governed by the provisions of CAR. While clarifyingthe issue raised by the tour operators with regard to credit shell, it isstated that in this category there are two types of purchase of ticket bythe agents. The first mode is that when initially passengers pay the moneyto agent and agent purchases ticket for the passenger and the secondmode is the one where agent purchases the ticket for the passengersthrough its advance deposit with the airline and the passengers pay themoney either at the time of consumption of ticket or may be even afterconsumption of ticket. In the affidavit it is made clear that even in caseswhere tickets are purchased by tour operator, who has paid the moneyto the airline for purchasing the ticket for the client but the client is yet topay that money to the agent, then on cancellation of ticket and convertingit into a credit shell, the ticket will remain in the name of passenger andin case passenger utilises the credit shell he will have to pay to the agent D

E

F

G

H

Aand not to the airline. However, in case the passenger does not utilisethe credit shell till 31[st] March 2021, then airline will have to refund theamount as per proposed formulation and money will go back to the sameaccount of the agent from which the ticket amount was paid to theairline. It is also clarified that in case passenger in whose name theticket is booked does not utilise the credit shell till 31[st] March 2021, thenBthe airline will have to refund with interest prescribed in the formulationto the agent from whose account the ticket was booked.

15. Referring to supplementary affidavit filed on behalf ofrespondent nos.1 and 2 learned counsel appearing for the agents havesubmitted that when the tickets are purchased by the agent for theCpassenger by paying their money which is yet to be received from thepassenger, there should not be any difficulty for giving the credit shell inthe name of the agent himself who has purchased the ticket. When itwas pointed out that as per the supplementary affidavit filed by therespondent nos.1 and 2 it was made clear that in cases where ticketsDwere purchased by agents for passengers, where credit shell is given inthe name of passenger, if it is not utilised before 31[st] March 2021 moneywill be returned to the account of agent from whose account moneywas paid to the airline, there should not be any difficulty in issuing creditshell in the name of agent, the learned Solicitor General obtainedinstructions in this regard and filed additional affidavit on 24[th] SeptemberE2020 on behalf of respondent nos.1 and 2. In this affidavit, it is statedthat the existing regulatory mechanism recognises the contract betweenthe passenger and the airlines only, for a ticket which is purchased andfor which a named passenger only can be accounted for in the ‘passengermanifest’ of a schedule flight which is to be maintained as per the bestFinternational practices and regulations. The travel agent, if any, involvedin the purchase of any ticket on behalf of any passenger remains only avia-media, leaving the principal contract between the airline and thepassenger 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 proposed to beGissued in the name of passengers only who have booked their ticketsthrough agents and it is not feasible to issue a credit shell in the name ofagent, as much as ticket was purchased in the name of passenger but atthe same time it is clearly stated that if such voucher is not used before31[st] March 2021 as per the formulation, money has to be paid back byHthe airliner through the same account from which they have receivedmoney.

16. In view of such formulations which are arrived at during thecourse of meetings held by the respondent nos.1 and 2 with other stakeholders, airlines etc., it is submitted that substantially their grievancesstand resolved but at the same time certain issues were raised duringthe course of hearing.

17. Sri Sanjay Hegde, learned senior advocate appearing for thePravasi Legal Cell has submitted that in view of the proposals asmentioned in the affidavit filed by the respondent nos.1 and 2, theirgrievances are substantially redressed but at the same time he hassubmitted that for the bookings made for foreign air travel through Indiancarriers outside the country, same formulation as proposed by therespondent nos.1 and 2 can be applied. Sri C.A. Sundaram, learnedsenior counsel appearing for the Air Passengers Association of Indiahas submitted that whatever the mode they have booked, all passengersare entitled for refund immediately. It is submitted that the problemsfaced by the airlines is no ground for not refunding the money which ispaid by the passengers. Sri Harshwardhan Bhende, learned counselappearing for the Travel Agents Federation of India has submitted thatwhen the tickets are booked by travel agents by investing their moneyon behalf of the passengers there is no reason for not issuing credit shellin the name of agents. Sri Pallav Shishodia, learned senior counselappearing for Indian Association of Tour Operators has contended that,when tickets are booked by agents, there is no reason for not issuingcredit shell in the name of agents. It is further submitted that in casecredit shell is not utilised by 31[st] of March 2021, refund has to comeback to the same account of the agent, from which account money ispaid for bookings.

18. Shri Harish Salve, learned senior counsel appearing for SpicejetLtd., 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 affidavitare by and large acceptable to his client. Sri Rohtagi, learned seniorcounsel appearing for Indigo Airlines, also has submitted that thesuggestions/ formulations as suggested in the affidavit filed on behalf ofrespondent nos.1 and 2 are acceptable. Shri Pinaki Misra, learned seniorcounsel appearing for Tata SIA Airlines Ltd. (Vistara Airlines) and AirAsia India Ltd. has submitted that the incentive mechanism suggestedfor enhancing the face value of the credit shell, in the affidavit filed byrespondent nos.1 and 2 itself is reasonable and no higher amount of A

BC

D

E

F

G

H

Ainterest may be considered on the refund. Sri Arvind Datar, learnedsenior counsel appearing for Go Airlines India Ltd. by drawing ourattention to the detailed affidavit filed on its behalf has submitted thatCOVID-19 is an existential threat to commerce generally, and to airlinesin particular. It is submitted that in developed countries airline industryhas been able to secure itself more broad-based State relief (whether byBbail-out or otherwise, including dispensations from refunds). However,no comparable measures have yet been introduced in India. By referringto facts and figures as mentioned in the affidavit, learned senior counselhas submitted that airlines is one of the worst affected sectors on accountof pandemic COVID-19. Learned counsel drew our attention to theCReport dated 09[th] June 2020, of IATA (the world-wide Aviation IndustryAssociation) on the economic performance of the airline industry. In itsreport, after predicting a world-wide US$ 434 billion drop in airline revenueand related indirect tax receipts and a 50.6% fall in passenger demand itfurther 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%Ddecline); 2020 will be the worst year in the history of airlines with netlosses of $84.3 billion; and 32 million jobs supported by aviation are atrisk etc. Referring to the severe liquidity crunch faced by airlines it issubmitted that if the credit shells are not utilised by 31[st] March 2021, it isnot possible to refund the money as ordered and learned counsel hasErequested to extend the time to encash credit shell at least upto31[st] March 2022 to balance the equities.

19. Though the various contentious issues are raised on both sidesand at the same time the suggestions/formulations as suggested byrespondent nos.1 and 2 in the affidavits filed before this Court are byFand large acceptable to the majority of stake holders. In ordinary coursemodalities and timelines for refund on cancellation of tickets are governedby, 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 saidRequirements are issued by the competent authority in exercise of powersunder the provisions of Aircrafts Act, 1934 and the Rules made thereunder.GBut at the same time we cannot lose sight of the present situation prevailingin the country and across the globe, i.e. the effect of pandemicCOVID-19. It cannot be disputed that the civil aviation sector, which isone of the important sectors, is seriously affected in view of the banimposed for operating flights. Added to the same, air passenger trafficHhas 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 furtherjeopardise the possibilities of generation of cash by airlines which canfurther adversely affect/delay the refund cycle. Strict enforcement ofCivil Aviation Requirements at this moment may not yield any meaningfulresult for any stake holder. In view of the suggestions and formulationsarrived at in the meetings held by respondent nos.1 and 2, which areacceptable to the majority of stake holders, have to be implemented inletter and spirit. We also feel that such formulations are workable solutionsin these peculiar circumstances which are prevailing in the country. Thegrievances which are raised on behalf of agents can be taken care bythis Court by issuing appropriate directions wherever bookings are madeby them, so as to see that their interest is safeguarded. Sri Arvind Datar,learned senior counsel, though has argued to extend the timelines forencashment of credit shell at least up to 31[st] March 2022 or any othershorter period but we are not inclined to accept the same, keeping inmind that the passengers who, with the hope of travel, have booked theirtickets by spending their own money. For these reasons we are notinclined to delve any further on any of the contentions and deem itappropriate 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 duringlockdown period and the airline has received payment for bookingof air ticket for travel during the same period, for both domesticand international air travel and the refund is sought by the passengeragainst that booking being cancelled, the airline shall refund thefull amount collected without any cancellation charges. The refundshall be made within a period of three weeks from the date ofcancellation.

2. If the tickets have been booked during the lockdown periodthrough a travel agent for a travel within the lockdown period, inall such cases full refund shall be given by the airlines immediately.On such refund, the amount shall be passed on immediately bythe agent to the passengers.

3. Passengers who booked tickets at any period of time but fortravel after 24[th] May, 2020 – refund of fares to the passengerscovered under this category shall be governed by the provisionsof Civil Aviation Requirements (CAR).

AB

C

D

E

F

G

H

A

4. Even for international travel, when the tickets have been bookedon an Indian carrier and the booking is ex-India, if the ticketshave been booked during the lockdown period for travel withinthe lockdown period, immediate refund shall be made.

5. If the tickets are booked for international travel on a foreigncarrier and the booking is ex-India during the lockdown period fortravel within the lockdown period, full refund shall be given by theairlines and said amount shall be passed on immediately by theagent to the passengers, wherever such tickets are booked throughagents. In all other cases airline shall refund the collected amountto the passenger within a period of three weeks.

B

C

6. In all other cases, the airlines shall make all endeavours torefund the collected amount to the passenger within 15 days fromtoday. If on account of financial distress, any airline / airlines arenot able to do so, they shall provide credit shell, equal to the amountof fare collected, in the name of passenger when the booking isDdone either directly by the passenger or through travel agent soas to consume the same on or before 31[st] March, 2021. It is opento the passenger either to utilize such credit shell upto 31[st] March,2021 on any route of his choice or the passenger can transfer thecredit shell to any person including the travel agent through whomEhe / she has booked the ticket and the airlines shall honour such atransfer.

D

D

6.1. The credit shell issued in the name of the passenger shall betransferable which can be utilized upto 31[st] March, 2021 and theconcerned airline shall honour such a transfer by devising amechanism to facilitate such a transfer. It is also made clear thatsuch credit shell can be utilized by the concerned agent throughwhom the ticket is booked, for third party use. It is also madeclear that even in cases where credit shell is transferred to thirdparty, same is to be utilized only through the agent who has bookedthe ticket at the first instance.

F

G

7. In cases where passengers have purchased the ticket throughan agent, and credit shell is issued in the name of passenger, suchcredit shell is to be utilized only through the agent who has bookedthe ticket. In cases where tickets are booked through agent, creditshell as issued in the name of the passenger which is not utilized H

PRAVASI LEGAL CELL & ORS. v. UNION OF INDIA & ORS.[R. SUBHASH REDDY, J.]

by 31[st] March, 2021, refund of the fare collected shall be made tothe same account from which account amount was received bythe airline.

8. In all cases where credit shell is issued there shall be an incentiveto compensate the passenger from the date of cancellation upto30[th] June, 2020 in which event the credit shell shall be enhancedby 0.5% of the face value (the amount of fare collected) for everymonth or part thereof between the date of cancellation and30[th] June, 2020. Thereafter the value of the credit shell shall beenhanced by 0.75% of the face value per month upto 31[st] March,2021.

Further, the second respondent-Directorate, shall ensure strictcompliance of the directions referred above, by issuing necessaryinstructions to the all concerned.

20. With the above directions, these writ petitions are disposed of.

Divya Pandey

Writ petitions disposed of.

A

B

C

D

E

F

G

H