Citing the health of the Aviation sector, Central government has sought to give airlines time till March 31, 2021 to make refunds of air tickets for flights cancelled during the lockdown. Submitting its affidavit in the Supreme Court, the government has favoured the airlines’ view of issuing credit shell for the time being which can be used by consumers till March 31, failing which the refunds shall be made to the passengers concerned.
These credit shells will be transferable and can be used by a passenger for travelling on any route with a top up facility as well, stated the affidavit filed by the Directorate General of Civil Aviation (DGCA), adding, “By the end of March, 2021, the airlines shall refund cash to the holder of the credit shell."
It also pointed out that as far as tickets booked by the airlines during the first lockdown period, i.e. from March 25t to April 14 is concerned, there is already a circular issued on April 16 to make immediate refunds since such booking were done in contravention of the DGCA’s directions.
In its affidavit, the government has admitted that non-refund of fares or creating involuntary credit shells by the airlines would be in violation of the regulatory framework, as envisaged under the Civil Aviation Requirements (CAR) and the Aircraft Rules.
Even as the government accepted that these violations may result in initiation of enforcement action against the airlines, it emphasized that such steps would adversely affect the health of the aviation sector.
“If any statutory step is taken by the answering respondent in exercise of its executive power then instead of resolving the issue the same may result into another deadlock which may lead to multiple litigations, thereby, triggering a very unhealthy situation for Indian Aviation," stated the affidavit.
DGCA said that while the airlines are already operating to their limited capacity, the enforcement action can result in further reduction or suspension of the approved schedule of the airlines.
“Therefore, any such enforcement action would further restrict/reduce their operations and thus any such enforcement action may further jeopardise the possibilities of generation of cash by the airline which can further adversely affect or delay the refund cycle. Under such complex circumstances initiating enforcement action against the airlines may not yield any meaningful result for any stakeholder rather may prove counterproductive for each stakeholder and thereby may be against the Indian Aviation as a whole," added the response filed in a PIL by NGO ‘Pravasi Legal Cell.’
Filed through advocate Jose Abraham and argued by senior advocate Sanjay Hegde, the petition had challenged the involuntary credit shell created by the airlines, and referred to the CAR to highlight that the airlines were obligated to make full refunds to the passengers.
The Supreme Court will examine the government’s response on September 9 when the matter is taken up next.
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