Supreme Court Orders COVID-19 Flight Ticket Refunds and Credit Shell Safeguards

Pravasi Legal Cell & Ors. Vs Union of India & Ors. (Supreme Court of India)

Summary: The Supreme Court disposed of a batch of public interest writ petitions concerning the refund of airline tickets for domestic and international flights cancelled amid COVID-19 travel restrictions. The petitions, led by Pravasi Legal Cell, challenged the airlines’ practice of issuing credit shells rather than returning money and argued that the Ministry of Civil Aviation’s Office Memorandum of 16 April 2020 protected only some passengers. The dispute arose after the nationwide lockdown beginning on 25 March 2020 and the successive extensions of flight restrictions.

The petitioners, including the Air Passengers Association of India, individual passengers and the Travel Agents Federation of India, sought refunds without cancellation charges. They relied on the Directorate General of Civil Aviation’s Civil Aviation Requirements governing refunds for cancelled or unused tickets. They maintained that placing amounts in a credit shell should depend upon the passenger’s choice rather than be imposed by airlines, especially where bookings preceded lockdown or were made through agents.

The Union of India and the Directorate General of Civil Aviation explained that the civil aviation industry faced severe financial distress and that immediate strict enforcement could further reduce the airlines’ ability to operate and generate cash to discharge refund obligations. Following consultations with domestic airlines, online travel agents and industry associations, the Government proposed differentiated arrangements based on the time of booking, intended travel dates, domestic or international routes, and whether bookings were made directly or through agents.