Case Note & Summary
The judgment arises from a batch of writ petitions filed in the Supreme Court of India challenging the refusal of airlines to refund the full amount for tickets cancelled due to the COVID-19 lockdown. The petitioners included Pravasi Legal Cell, Air Passengers Association of India, Travel Agents Federation of India, and individual passengers. The background is the nationwide lockdown imposed from 25 March 2020 to 3 May 2020, during which all domestic and international flights were suspended. The Ministry of Civil Aviation issued an Office Memorandum on 16 April 2020 directing airlines to refund full amounts only for tickets booked during the lockdown period, but for tickets booked earlier, airlines were offering credit shells valid for one year instead of refunds. The petitioners argued that this practice violated the Civil Aviation Requirements (CAR) of May 2008, which mandate that refunds must be made without cancellation charges when flights are cancelled by the airline, and that the option of a credit shell is the passenger's prerogative, not the airline's default. They also contended that the Office Memorandum was discriminatory as it left out passengers who had booked tickets before the lockdown. The legal issues were whether the airlines' refusal to refund full amounts was arbitrary and illegal, and whether the Office Memorandum was valid. The Court analyzed the CAR and found that when a flight is cancelled by the airline, the passenger is entitled to a full refund without any deduction. The Court held that the Office Memorandum, by limiting refunds to tickets booked during the lockdown, was discriminatory and contrary to the CAR. The Court directed all airlines to refund the full amount collected for tickets for flights cancelled due to the lockdown, irrespective of when the ticket was booked, within a specified period. The Court also held that the option of a credit shell is the passenger's choice, not the airline's. The decision favored the petitioners, ordering refunds and quashing the discriminatory part of the Office Memorandum.
Headnote
A) Civil Aviation - Refund of Airfare - COVID-19 Lockdown - Civil Aviation Requirements, 2008 - Office Memorandum dated 16.04.2020 - The petitioners challenged the practice of airlines issuing credit shells instead of refunding the full fare for flights cancelled due to the lockdown. The Court held that the Office Memorandum, which only mandated refunds for tickets booked during the lockdown period, was discriminatory and contrary to the CAR. The Court directed that all passengers whose flights were cancelled due to the lockdown are entitled to a full refund without any cancellation charges, irrespective of when the ticket was booked. (Paras 1-10) B) Civil Aviation - Credit Shell - Passenger's Prerogative - Civil Aviation Requirements, 2008 - The Court held that the option of holding the refund amount in a credit shell is the prerogative of the passenger and not a default practice of the airline. Airlines cannot unilaterally impose credit shells; they must refund the full amount if the passenger so requests. (Paras 4-5) C) Constitutional Law - Discrimination - Article 14 - Office Memorandum dated 16.04.2020 - The Court found that the Office Memorandum discriminated between passengers who booked tickets before the lockdown and those who booked during the lockdown, as it only mandated refunds for the latter. This classification was held to be arbitrary and violative of Article 14 of the Constitution. (Paras 6-8)
Issue of Consideration
Whether the airlines' practice of providing credit shells instead of refunding the full amount for cancelled flights during the COVID-19 lockdown is arbitrary and violative of Civil Aviation Requirements, and whether the Office Memorandum dated 16.04.2020 is discriminatory and illegal.
Final Decision
The Supreme Court allowed the writ petitions, directing all airlines to refund the full amount collected for tickets for flights cancelled due to the COVID-19 lockdown, irrespective of when the ticket was booked, within a period of three weeks from the date of the judgment. The Court held that the Office Memorandum dated 16.04.2020, to the extent it discriminates between passengers who booked tickets before and during the lockdown, is quashed. The option of credit shell is the passenger's prerogative, and airlines cannot impose it unilaterally.
Law Points
- Refund of airfare
- COVID-19 lockdown
- Civil Aviation Requirements
- Credit Shell
- Office Memorandum
- Discrimination
- Unjust enrichment
