Supreme Court Airline Refund Mandate on Credit Shell Prohibition
Parties: Pravasi Legal Cell & Ors. v. Union of India, DGCA & InterGlobe Aviation Ltd.
Airlines operating in India, including IndiGo, unilaterally locked hundreds of crores of passenger ticket fares into involuntary 'credit shells' or 'credit vouchers' following flight cancellations, refusing cash reversals to passenger bank accounts.
The Supreme Court declared that air carriers cannot unilaterally lock consumer funds into credit shells without passenger consent. Passengers maintain an unfettered legal right to a full cash refund to their source payment account. The bench directed that any unutilized credit shell must be refunded with statutory interest of 0.5% per month up to 31 March 2021 and 0.75% per month thereafter.