Delhi HC Rules Air Ticket Refund Dispute Not a Commercial Case under Commercial Courts Act

The Delhi High Court has held that a refund dispute over airline tickets cannot be treated as a commercial dispute under the Commercial Courts Act, 2015. The Court said that although a contract of carriage arises when a passenger buys an air ticket, a simple service arrangement for personal travel does not carry the element of trade, business, or commerce necessary for the jurisdiction of commercial courts. The judgment makes clear that high value claims by individual consumers cannot be used to invoke the specialized mechanism of commercial courts unless the transaction itself bears a business or mercantile character.

A Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela, while dismissing the appeal, observed, “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.”

The Bench further noted that merely because a passenger enters into a contract of carriage by buying a ticket, it cannot be said that a commercial transaction took place.

The Court relied heavily on the Top Court's ruling in Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP & Anr., (2020) 15 SCC 585, which clarified that the Commercial Courts Act was enacted for the specific purpose of ensuring speedy disposal of high-value disputes involving business, trade, and commerce.

In that case, the Supreme Court had held that liberal interpretation of the Act would open the doors of commercial courts to all high value suits, including those lacking commercial flavour, thereby clogging the system and frustrating the intent of Parliament.

The Court also drew from its own decision in Meena Vohra v. Master Hosts Pvt. Ltd., 2025 SCC OnLine Del 1758, where it was emphasized that disputes supported only by private arrangements without mercantile documents cannot be categorized as commercial.

Reliance was further placed on Pushpshree Hospitals & Research Centre v. Kothari Chemist, 2024 SCC OnLine MP 9626, Bharat Huddanna Shetty v. Ahuja Properties & Developers, 2021 SCC OnLine Bom 13984, and Glasswood Realty Pvt. Ltd. v. Chandravilas Kailashkumar Kothari, 2021 SCC OnLine Bom 5032.

The said rulings collectively underscored that ordinary contracts, friendly loans, or consumer arrangements, even if they involve high sums, cannot be dragged into the framework of commercial litigation unless they are tied to trade or business activity.

The appellants argued that their case clearly fell within Section 2(1)(c)(xviii) of the Commercial Courts Act, which covers disputes arising out of agreements for the sale of goods or provision of services.

They submitted that the purchase of two business class tickets in June 2023 was an agreement for services, that the airline was registered under GST and filed returns, and that the General Conditions of Carriage expressly recognized the purchase of a ticket as a contract of carriage.

They further cited the Carriage by Air Act, 1972, to argue that the relationship was a legally recognized service contract and thus commercial in character. The airline, represented by counsel, countered that the Act required the presence of trade or business elements, and that a passenger’s personal travel arrangement could not be equated with mercantile transactions between merchants, traders, or financiers.

The High Court recorded both sets of submissions but concluded that the respondent’s position was consistent with the legislative intent behind the Act and the settled interpretation of higher courts.

The ruling ensures that commercial courts remain focused on trade and business related cases while passengers and individual consumers continue to seek remedies before civil courts or consumer forums, preventing misuse of specialized judicial forums and preserving faster resolution for genuine commercial litigation.

Brief Background

The dispute began when the appellants booked two business-class tickets with British Airways for travel from Delhi to New York on June 2, 2023, with return on July 5, 2023, for a total cost of Rs. 5,09,918.

Due to the hospitalization of appellant no. 1’s 80 year old mother, they canceled the trip and requested a refund by email on June 1, 2023, followed by reminders.

The airline informed them that cancellation charges of Rs. 3,05,042 would apply and later converted the full booking amount into a Future Travel Voucher.

A legal notice dated October 9, 2023, demanding refund with 18% interest went unanswered in substance, and pre-institution mediation at the Saket District Legal Services Authority failed when the airline did not respond.

The appellants then filed CS (COMM) 185/2024 before the Commercial Court seeking refund, damages, and interest.

On November 14, 2024, the Commercial Court returned the plaint under Order VII Rule 10 of the Code of Civil Procedure, holding that the dispute was not commercial. 

Case Title: Chand Mehra & Anr. v. British Airways PLC

Bench: Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela

Judgment Date: September 23, 2025