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SC to consider Centre's suggestion of transferable refund vouchers for cancelled flight

The bench said that it would not go into the issue of foreign airlines as the government of India cannot order refund on those tickets.

September 25, 2020 / 08:44 PM IST
Representative Image

Representative Image

The Supreme Court on September 25 said it will consider the Centre's suggestion of making transferable the refund vouchers to be given to the passengers in lieu of the tickets booked for the flights which were cancelled due to the COVID-19 lockdown. The top court reserved its verdict on a batch of petitions including by NGOs and passengers associations seeking refund of ticket fare for the flights which were cancelled due to the Pandemic.

A bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah was told by Solicitor General Tushar Mehta, appearing for Centre and Director General of Civil Aviation (DGCA), that transferrable refund vouchers can be issued to the passengers, which can be used by the travel agents who had booked their tickets for the flights which were cancelled later. The bench said, If the travel agents can use the vouchers of the passengers then it is a fair enough suggestion.

At the outset, Mehta said that anybody can be a travel agent and the government does not have any control over them as it has no idea about who are registered or who are not registered. He explained modalities of refund to be given to the passengers and how it would work as asked by the top court on its last hearing.

The bench asked if the refund voucher is not used within the deadline then will the money go to the account of the travel agent? Mehta replied that the government does not know these travel agents or recognize them since there is no registration and an agent buys tickets in blocks as per the contract between him and the airline.

DGCA has nothing to do with it, he said, adding that it cannot control the inter se contractual obligations between agents and passengers. He added that the government has done its best to ensure that the passenger either gets the money back or gets the voucher which is transferable, as for the airlines going down or closing down will have a cascading impact on the economy.

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He contended that a passenger concerned may surrender the ticket and travel agents can sell the tickets to others but ordering the refund for all the passengers will not be good for the airlines. Mehta said that the travel plan can be changed and alternate tickets can be issued.

Senior advocate Pallav Sisodia, appearing for travel agents body, said that the airlines cannot be saved from insolvency at the cost of their insolvency and it would be better if the vouchers of the passengers are made transferrable. The bench said that it has taken note of Centre's suggestion and would also take into account the submission of travel agents' body.

Senior advocate Mukul Rohatgi, appearing for Indigo airline, said that he has no difficulty with the arrangement proposed by the government as the company has thousands of employees and the business has been impacted for the last so many months. Senior advocate Sanjay Hegde, appearing for NGO 'Pravasi Legal Cell,' raised the concern of refund of ticket booked from abroad.

The bench said that it would not go into the issue of foreign airlines as the government of India cannot order refund on those tickets. Hegde said the passenger should be allowed refund if the ticket has been booked from a destination like Dubai to a place in India on an Indian airline.

The bench told senior advocate Arvind Dattar, representing GoAir, that the government has given time till March next year to refund the money and if the airline wants more time then it needs to approach the government. Dattar said that the company has liability of Rs 260 Crore and some more time like six months or one year be given for making refund to the passengers.

The bench said it is reserving its verdict and would take the suggestions into account. On September 23, the top court had asked the Centre to clarify the modalities of refund of air tickets to be made to the passengers and travel agents in view of cancellation of flights during the COVID-19 induced lockdown period.

Mehta had earlier said that the government has taken a decision of refund keeping in mind the welfare of all and an appropriate solution has been worked out. On September 9, the top court had asked the Centre to clarify whether it is willing to give complete refund of air tickets booked for travel during the COVID-19 lockdown.

The DGCA, in its affidavit said that full refund shall be provided by airlines immediately for tickets booked during the COVID-19 lockdown for domestic or international travel within the lockdown period. It had said if airlines are not able to refund on account of financial distress, they shall provide a credit shell equal to the amount of fare collected and this shall be issued in the name of the passenger who has booked the ticket for domestic travel directly or through an agent including online platforms.

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first published: Sep 25, 2020 08:44 pm