The Supreme Court on Friday reserved its order on a plea seeking a refund for airline tickets booked during the Covid-19 lockdown after the Centre submitted that as per the "proposed formulation", the credit shell has to go to the account of the passenger, in whose name the ticket was issued.

The credit shell cannot be a lump sum amount paid by the travel agents to the airlines, which is only for pre-blocking of tickets and does not amount to purchase of tickets, the Centre said in its affidavit.

Solicitor General Tushar Mehta, representing the Centre, submitted before a bench comprising Justices Ashok Bhushan, R. Subhash Reddy and M.R. Shah, that the credit shell facility cannot be availed by travel agents who booked tickets during the lockdown.

"So far as travel agents are concerned, we cannot regulate them. We don't have control over it," he said.

The Centre, in its additional affidavit, said: "The travel agent, if any, involved in the purchase of any ticket on behalf of any passenger remains only a via media, leaving the principal contract between the airlines and the passenger only, which is the only mode recognised under the regulatory mechanism of the answering respondent."

The bench queried Mehta, if the credit shell is not used till the deadline, will the money get transferred in the agent's account. To this, he replied the government cannot control contractual obligations between passengers and agents.

"The DGCA (the Directorate General of Civil Aviation) and MoCA (the Ministry of Civil Aviation) are neither privies to nor a party to such contracts. It is respectfully submitted that these aspects are also beyond the regulatory ambit of the DGCA/MoCA and accordingly, the answering respondent can neither supervise nor regulate these private arrangements between the various airlines, travel agents, tour operators etc," said the affidavit.

Mehta emphasised that the government has done its best to ensure that the passenger either gets the money back or gets the voucher (credit shell) which is transferable.

As the bench asked if the passenger surrenders the voucher to the agent, will it be refunded, he said that the government has no issue if the passengers get their money back by surrendering the voucher.

Senior advocate Pallav Shishodia, appearing for the travel agents, pointed out the passengers have paid the money to the agents, and not to the airline, and there are many cases where the agents have paid in advance to the airline to book tickets.

The bench said the interest of the travel agents is protected as if the voucher is not used, then the money will be deposited in their account.

Appearing for GoAir, Senior Advocate Arvind Datar said the airlines were facing massive losses and now they were to bear the burden of paying the refund to the passengers. To this, the bench replied: "But that is your airline's problem, how can you hold up passengers' money?"

Datar argued that from 100 per cent flights, the airline is at 60 per cent in operation in September. After a hearing on the matter, the bench reserved its order.