The Delhi High Court on Tuesday dismissed an appeal filed by Chand Mehra and his co-appellant against British Airways, holding that their refund dispute over cancelled business class tickets did not fall within the ambit of “commercial disputes” under the Commercial Courts Act, 2015. The division bench led by Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela upheld the Saket Commercial Court’s earlier order returning the plaint for lack of jurisdiction.
Background
The appellants had booked two business class tickets worth ₹5.09 lakh for travel from New Delhi to New York in June 2023. Due to the sudden illness of appellant Mehra’s elderly mother, they cancelled the trip and requested a refund. According to the pleadings, British Airways initially offered only ₹2.04 lakh after deducting cancellation charges of over ₹3 lakh and then allegedly converted the entire ticket value into a future travel voucher without consent.
Frustrated by the airline’s stance, the appellants issued a legal notice, followed by a pre-institution mediation attempt at the Saket Legal Services Authority, which went nowhere. Finally, they filed a suit in the Commercial Court seeking full refund, interest, and punitive damages of over ₹10 lakh, arguing that the airline’s conduct amounted to unjust enrichment.
British Airways, through its counsel, countered that the matter was not commercial in nature, but merely a personal service dispute, and hence outside the Commercial Courts’ jurisdiction.
Court’s Observations
The High Court examined whether the case could be classified as a “commercial dispute” under Section 2(1)(c) of the Act. Counsel for the appellants stressed that buying an air ticket created a “contract of carriage” and thus constituted a service agreement falling under the commercial category. They also pointed to GST regulations and the airline’s tax filings to argue that the transaction was commercial.
British Airways’ lawyers strongly disagreed, citing Supreme Court precedent in Ambalal Sarabhai Enterprises v. K.S. Infraspace LLP (2020) where the top court had warned against stretching the definition of commercial disputes to cover every high-value contract.
The bench appeared unconvinced by the appellants’ expansive reading of the statute. “Merely because a passenger buys an air ticket and enters into a contract of carriage, it does not mean there is a commercial transaction,” the court said, noting that commerce, trade, or business elements were absent. The judges emphasised that commercial courts were designed to handle disputes between merchants, financiers, or traders, not individual grievances with service providers.
The bench also cited Delhi and Bombay High Court rulings which clarified that friendly loans or personal service contracts could not be labelled as commercial disputes.
In its concluding remarks, the court dismissed the appeal, agreeing with the Commercial Court’s finding that the suit lacked commercial character. “The crucial aspect for instituting a suit under the Commercial Courts Act is commercial or business activity. Any suit of high valuation without these elements cannot be brought under this Act,” the bench ruled.
Case Title:- Chand Mehra & Anr. v. British Airways PLC, FAO (COMM) 245/2024