Airline Gave You a Credit Shell Instead of Cash? Know When You Can Refuse

Following widespread flight cancellations, domestic and international airlines unilaterally locked passenger funds into non-refundable 'credit shells' or travel vouchers with short validity periods, refusing cash refunds. Pravasi Legal Cell and passenger collectives filed public interest petitions before the Supreme Court seeking immediate liquidation of ticket funds into cash.

The Supreme Court ruled that an airline cannot compel any passenger to accept a credit shell or voucher in lieu of a refund. Credit shells can only be maintained with the passenger's voluntary consent. The Court mandated that for cancelled flights, airlines must remit 100% refund immediately. Furthermore, any unutilized credit shell must be compulsorily refunded in cash to the passenger along with statutory interest (0.5% to 0.75% per month), holding that withholding passenger money constitutes an impermissible financial lock-in.

The complainant booked tickets for a family medical conference. Due to a schedule change of over 5 hours announced by the airline, the passenger declined the revised timing. IndiGo refused a cash refund and instead generated a credit shell with a 1-year expiry. When the passenger could not travel within the year due to health reasons, IndiGo forfeited the entire amount of ₹28,450, asserting that their 'Conditions of Carriage' permitted expiry.

The National Consumer Disputes Redressal Commission (NCDRC) upheld the State Commission's verdict against IndiGo. The Commission held that when travel disruption originates from the airline's schedule alteration, compelling the customer to accept a credit shell and subsequently forfeiting the principal constitutes a gross unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019. The Commission directed IndiGo to refund ₹28,450 with 9% annual interest, ₹25,000 compensation for mental harassment, and ₹10,000 litigation costs.

The complainant booked flight tickets on SpiceJet through MakeMyTrip. The flight was cancelled by SpiceJet. SpiceJet refunded the money to MakeMyTrip's B2B agent balance. However, MakeMyTrip refused to credit the passenger's HDFC credit card, instead loading ₹34,200 into 'MMT MyCash Wallet' with a 6-month validity restriction and no bank transfer option.

The State Commission dismissed the appeal filed by MakeMyTrip and SpiceJet, holding both entities jointly and severally liable. Under DGCA CAR Series M Part II (Clause 3.3.2) and CCPA Dark Patterns regulations, converting a cash refund into a closed proprietary wallet without express consent is an unfair trade practice. The Commission ordered MakeMyTrip and SpiceJet to credit ₹34,200 to the complainant's bank account with 12% interest, alongside ₹30,000 compensation and ₹15,000 legal fees.

The complainants booked two round-trip business class tickets from Kolkata to London. Air India rescheduled the flight by 8 hours, causing the passengers to miss connecting European rail links. The passengers cancelled the booking and demanded an immediate bank refund. Air India issued non-transferable credit vouchers instead and asserted that non-refundable fare rules applied.

The District Commission ruled that under DGCA CAR Section 3, Series M, Part IV, a schedule delay exceeding 4 hours grants the passenger an absolute right to elect a 100% cash refund. Air India's refusal to remit cash and thrusting vouchers was held to be a severe deficiency in service under Section 2(11) CPA 2019. The Commission ordered Air India to refund the entire fare of ₹1,82,400 with 10% interest from the cancellation date, plus ₹40,000 compensation and ₹15,000 legal expenses.