Delhi Court Orders Akasa Air Operator to Pay ₹1.08 Crore To Travel Agency Over Cancellation Of 2023–24 Festive Bookings

The Commercial Court at Saket, New Delhi, has decreed a suit filed by Delhi-based ABS Tour & Travels against SNV Aviation Pvt. Ltd., which operates Akasa Air, holding that the unilateral cancellation of bulk bookings for the Christmas–New Year 2023–24 travel period amounted to breach of contract.

Presiding Officer Lalit Kumar held that the cancellation deprived the agency of a real and foreseeable commercial opportunity to earn profits during the peak festive season and awarded Rs 1,08,80,000/- towards loss of profits.

“This Court is satisfied that the plaintiff has established, on a preponderance of probabilities as required under civil jurisprudence and the Commercial Courts Act, 2015, that the defendant's wrongful cancellation deprived the plaintiff of a real and foreseeable commercial opportunity to earn profit during the peak festive season and that the quantum claimed is supported by documentary evidence and reasonable commercial assessment,” the court held.

ABS Tour & Travels had sought Rs 1,08,80,000 towards loss of profits after eight group PNRs comprising 640 seats, booked for the Delhi–Goa and Goa–Delhi sectors for travel between December 23, 2023 and January 13, 2024, were cancelled.

The company had registered as an agent on the airline's portal and was granted login credentials enabling bulk bookings. It claimed that under the airline's standard 25%-75% payment structure, 25% of the total booking amount was required as advance for generation of PNRs, with the balance payable before departure.

In April 2023, the company booked eight PNRs comprising 80 seats each and paid ₹4,82,280/- as 25% advance, following which the PNRs were generated. On May 29, 2023, the bookings were cancelled without prior notice.

The agency contended that the bookings were made for the peak Christmas–New Year 2023–24 season, when fares rise sharply, and that the cancellation extinguished its opportunity to earn substantial profits. Although the advance amount was refunded on August 25, 2023, the agency issued a legal notice claiming damages of Rs 1,08,80,000/-.

SNV Aviation opposed the suit, arguing that the plaintiff had failed to demonstrate any actual loss and that under its Group Booking Terms and Conditions, bookings exceeding 70 seats required 50% advance payment. Since only 25% had been paid, the airline contended that the cancellation was justified.

Rejecting the defence, the court noted that no document had been placed on record to show that the alleged 50% advance condition was in force or applicable at the time of booking.

“If 50% advance payment was mandatory, the system would not have generated the PNRs upon payment of 25%. Further, no notice demanding the balance 25% was ever issued to the plaintiff prior to cancellation, nor was the amount forfeited in terms of the alleged clause,” the court observed.

On the question of damages, the court referred to Supreme Court precedents and observed that “law does not require mathematical precision in assessing damages for loss of profit.”

It held that the defendant's unilateral cancellation months before the scheduled travel dates deprived the plaintiff of the opportunity to sell seats during the peak season. The court further clarified that the refund of the advance amount did not absolve the defendant of liability for breach.

As regards the claim for interest at 18% per annum, the court found that no contractual stipulation supporting such a rate had been placed on record.

“Under Section 34 of the Code of Civil Procedure, 1908, the Court is vested with discretion to award interest on the principal sum adjudged. In commercial transactions, interest exceeding 6% per annum may be awarded, but such rate cannot exceed the contractual rate or the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions,” it said.

Holding that the plaintiff was not entitled to interest, the court decreed the suit for Rs 1,08,80,000 towards loss of profits.