COVID-19: SC Accepts DGCA Recommendations On Refunds

Supreme Court SC - Aviatorsbuzz
Supreme Court of India. Source: Wikipedia

The Supreme Court on Thursday observed that strict enforcement of Civil Aviation Requirements (CAR) at the moment may not yield any meaningful results for any stake holder.

The top court said this while accepting all recommendations on refund of airfare to passengers by aviation safety regulator, the Directorate General of Civil Aviation (DGCA). The top court later pronounced its judgement on a Writ Petition filed by the Pravasi Legal Cell.

In its judgement, a three-member bench comprising Justice Ashok Bhushan, Justice  R Subhash Reddy and Justice M R Shah said: “At this moment any strict enforcement 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.”

The Supreme Court observed that in view of suggestions and formulations arrived at in the meetings held by the respondents, which are acceptable to the majority
of stake holders, they 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 care by this Court by issuing appropriate directions wherever bookings are made by them, so as to see that their interest is safeguarded,” the three-member bench said.

The Supreme Court clarified that tickets booked through travel agents will be refunded to them through, and not directly to the passengers. The top 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.

The court said that though senior counsel Arvind Datar, had argued to extend the timelines for encashment of credit shell at least up to March 31, 2022 or any other shorter period, the bench was not inclined to accept the same, keeping in mind that the passengers who,  with the hope of travel, have booked their tickets by spending their own money.

Supreme Court’s Seven Point Directions:

1. If a passenger has booked a ticket during the lockdown period (from 25th March, 2020 to 24th 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 date 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 24th May, 2020 – refund of fares to the passengers covered under this category shall be governed by the provisions of Civil Aviation Requirements (CAR).

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 endeavours 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 31st March, 2021. It is open to the passenger either to utilize such credit shell upto 31st 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 31st March, 2021 and the concerned airline shall honour such a transfer by devising 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 made clear that even in cases where credit shell is transferred to
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 through 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 by 31st 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 cancellation upto 30th 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 cancellation and 30th June, 2020. Thereafter the value of the credit shell shall be enhanced by 0.75% of the face value per month up to 31st March, 2021.

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Aditya Anand
Deputy Editor, AviatorsBuzz Aditya Anand in his nearly two decades of Journalism experience has tracked Aviation, Travel, and Hospitality closely and reported on it for major publications like The Hindu, Mumbai Mirror, and MIDDAY.

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