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Supreme Court accepted recommendations made by DGCA for Airfare Refund

On Thursday The Supreme Court in its verdict accepted all the recommendations made by Directorate General of Civil Aviation (DGCA) regarding for refund of airfare of tickets booked during the COVID-19 induced lockdown.

Today, a three judge bench comprising of Justices Ashok Bhushan, Justice Subhash Reddy and Justice MR Shah stated that the petitions shall stand disposed of in terms of the DGCA proposals and the vouchers for tickets issued by travel agents shall be utilized by travel agents only when refunds are effectuated. It means that tickets booked by passengers through travel agencies are reimbursed through travel agents and not by passengers directly.

On September 25, after hearing the arguments of all the concerned parties at length Supreme Court reserves the judgment in plea(s) pertaining to the refund of airfare for tickets booked for the period of lockdown due to Covid-19 outbreak.

Last week Solicitor General Tushar Mehta told the Court that “Credit Shell” facility could not be availed by travel agents who booked tickets during the period of Covid-19 pandemic lockdown.

"So far as travel agents are concerned, we cannot regulate them. We don't have control over it. But suggestion is that a passenger can use the credit shell only through the agent."
"We can recognise two agencies because they are recognisable - passengers and airlines. We have done our best to ensure that the passenger either gets the money back or gets the voucher which is transferable."

The bench questioned the process, how transferability of these vouchers will take effect?

"If the passenger surrenders the voucher before the agent and the same is refunded?"
We have no problem with that if the passenger gets their money back by surrendering the voucher which is surrendered before the agent." Mehta replied.

Senior Advocate Arvind Datar appearing for Go air seeks extension of time for payment of refunds to passengers by at least 6 months after the stipulated date of March 31.

"My Lords may kindly balance their equities. I have to repay 260 crores, I have already paid 40 crores. I am only seeking time to be extended to 31st March 2022 or at least till September, 2022. I have 6400 employees, all will lose their jobs,"
"We are not saying we won't refund, but March 31, 2021 is an unrealistic deadline. We are only seeking some relaxation." Datar stated.

The Directorate General of Civil Aviation (DGCA) had filed an affidavit in the Supreme Court earlier this week, in which it informed the court about the credit shells for tickets booked during the lockdown period would only be applicable to passengers and not to travel agents.

The DGCA in its affidavit has categorized the passengers in three categories:

· For those who made bookings prior to lockdown for a period up till May 24, the refund would be governed by the credit shell scheme and the incentives thereunder;

· For bookings made during lockdown for travelling during lockdown, refund shall be made by airlines immediately "as the airlines were not supposed to book such tickets";

· For bookings that were made for travelling in dates after May 24, the refund would be governed by the Civil Aviation Requirements (CAR).

The DGCA also clarifies the credit shell scheme in its affidavit:

...if the Tour operator has already paid the money to the airline for purchasing the ticket for the client but the client is yet to pay that money to the agents, then on cancellation of ticket and converting it in to credit shell, the ticket will remain in the name of passenger and in case passenger utilizes the credit shell he will pay to the agent and not to the airline.

However, in case the passenger does not utilise the credit shell till 31st Mar 2021, then the airline will have to refund the amount as per proposed formulation and money will go back to same account of the agent from which the ticket amount was paid to the airline."










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