Solicitor general Tushar Mehta informed a bench of Justices Ashok Bhushan, R S Reddy and M R Shah that the proposal submitted by the Directorate General of Civil Aviation to facilitate refund of tickets of cancelled flights during lockdown period could not be tweaked to issue credit shell to travel agents who had booked on behalf of passengers or corporate clients.
Mehta explained that the agreement between passengers and corporate clients with travel agents, who do bulk booking with Airlines, falls within the private domain contract and could not be regulated either by the ministry of DGCA. “It would neither be feasible nor advisable for the DGCA or the ministry to regulate and supervise such private arrangements between the airlines and the agents. For the same reason, the credit shell or the benefits contemplated under the proposed formulation cannot go to the travel agent as claimed by them,” the SG said.
The bench reserved verdict on a PIL filed by Pravasi Legal Cell, which had brought to the court’s notice the non-adherence of Airlines to Civil Aviation Rules (CAR) in refunding the money against tickets booked in cancelled flights and challenged the creation of credit shells. The Centre also clarified that its regulatory mechanism did not extend to tickets booked in foreign soil for cancelled flights of foreign airlines.
“As per the existing regulations, a ticket can only be issued once the payment is made by the passenger. Any other mode of issuance of ticket comes within a private arrangement between the airlines and the passenger or his agent. In terms of the said private arrangement, where the passenger has purchased a ticket from a travel agent and has already paid for it to the travel agent then either the credit shell or the tickets in lieu of credit shell goes to the passenger directly. However, in case the where the ticket is issued in the name of a passenger and the said passenger is yet to pay, then the said arrangement falls within the ambit if a private arrangement between the passenger and the travel agent as explained above, for which a travel agent cannot claim the benefits of credit shell as contemplated in a proposed formulation,” the ministry said.
However, DGCA had said, “If on account of financial distress the domestic airlines are not able to do so, then they shall provide a credit shell equal to the amount of fare collected. This credit shell shall be issued in the name of the passenger who has booked the ticket.” It allowed the passengers to use it themselves or transfer the credit shell, which will be valid till March 31, 2021, to anyone they wished for travel on any route. If a passenger did not use the credit shell by March 31, 2021, he would get a cash refund, it had said.