Buying Air Tickets Not A Commercial Transaction Under Commercial Courts Act: Delhi High Court
Passengers seeking a refund for cancelled ₹5.09 lakh tickets had their suit returned as non-commercial under the Commercial Courts Act.
Chief Justice Devendra Kumar Upadhyaya, Justice Tushar Rao Gedela, Delhi High Court
The Delhi High Court has ruled that simply purchasing an airline ticket does not constitute a "commercial transaction" under the Commercial Courts Act, 2015, and therefore, disputes arising from such purchases such as refund claims do not fall within the scope of "commercial disputes" under the Act.
A Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela emphasized that while purchasing an airline ticket does result in the formation of a contract of carriage between the passenger and the airline, the transaction in itself does not involve any element of trade, commerce, or business.
The Court said, “An agreement containing a provision for providing mere services on payment of certain charges cannot, in every case, be termed to be an agreement, dispute in respect of which can be said to be a commercial dispute. To constitute a dispute to be a commercial dispute arising out of an agreement which contains a provision of services, the agreement or transaction is to necessarily contain an element of commerce or trade or business.”
Background
The case arose from an appeal filed by two passengers who had purchased business-class tickets worth ₹5.09 lakh from British Airways for a Delhi–New York flight scheduled in June 2023. Due to a medical emergency, they had to cancel their travel plans and sought a full refund of the ticket amount. However, British Airways deducted over ₹3 lakh as cancellation charges and instead issued a future travel voucher for the remaining amount.
The passengers initially approached a Commercial Court, but their suit was returned, with the court holding that the dispute did not fall within its jurisdiction under the Commercial Courts Act.
Finding
On appeal, the High Court upheld the Commercial Court’s decision. It observed that although a contract had indeed been formed when the passengers purchased the tickets, this contract did not qualify as a commercial transaction. The obligation undertaken by the airline was simply to transport the passenger from one location to another in exchange for payment a service arrangement that, by itself, lacks the commercial or trading elements required under the Act.
The Court further emphasized the purpose and scope of the Commercial Courts Act, stating, “Commercial Courts Act has been enacted for a specific purpose of creating judicial forum to provide for speedy disposal of high value commercial dispute. The crucial aspect, thus, for instituting a suit under the Commercial Courts Act is commercial or business or trading activity and any suit of high valuation minus these elements cannot be instituted in the Commercial Courts Act.”
Accordingly, the appeal was dismissed.
Cause Title: Chand Mehra & Anr. v. British Airways PLC, [2025:DHC:8427-DB]
Appearance:
Appellants: Advocates Shaini Bhardwaj, Aditya Sharma, Avichal Mishra, Vedic Thukral, and Rukhsar.
Respondent: Advocate Ritu Singh Mann
