Paytm ordered to pay over Rs 21,000 after cancelled flight ticket refund failed to reach customer despite airline processing payment

Waiting for a refund after a cancelled flight can be frustrating, especially when the airline says the money has already been processed but it never appears in your account. That is exactly what happened to a customer in Himachal Pradesh, leading to a legal battle that has now ended with a consumer commission holding Paytm responsible for the delay. In a significant order, the Bilaspur District Consumer Disputes Redressal Commission ruled that once the airline transferred the refund to Paytm, it became the platform's duty to ensure the money reached the customer. The commission also observed that technical issues or expired refund links could not be used as an excuse to deny a consumer their rightful refund.

Why did the consumer approach the commission?

The dispute dates back to the COVID-19 lockdown in 2020. According to a report by The Times of India (TOI), the complainant had booked return flight tickets between Chandigarh and Srinagar through Paytm for himself and a friend. The return journey, scheduled for April 7, 2020, was cancelled because of the nationwide lockdown.

The customer told the commission that despite repeatedly emailing both the airline and Paytm, the refund never reached him. With no resolution in sight, he filed a complaint before the consumer commission, alleging deficiency in service.

What did the airline and Paytm argue?

During the proceedings, Go Airlines explained that it had introduced its "Protect Your PNR" scheme during the pandemic. Under the scheme, passengers could retain the value of their tickets and use it for future travel instead of taking an immediate refund.

The airline further stated that once the scheme expired, it processed the refund and transferred Rs 6,437 to Paytm, through which the booking had originally been made.

Paytm, on the other hand, maintained that it had attempted to return the money by sending refund links to the customer on two occasions. According to the company, the customer did not claim the refund before those links expired, preventing the payment from being completed.

Why did the commission hold Paytm responsible?

The bench, comprising President Purender Vaidya and members Manchali and Jagdish Thakur, was not convinced by Paytm's explanation. It observed that the company's own records confirmed it had received the refund amount from the airline.

The commission ruled that once the refund was credited to Paytm, the responsibility of ensuring the money reached the customer rested entirely with the platform. It rejected the argument that the complainant should bear the consequences simply because the refund links had expired.

The order also pointed out that Paytm could have easily sought the customer's bank account details and transferred the amount directly. Instead, even after the consumer complaint was filed, the company chose to contest the matter rather than complete the refund.

The commission also dismissed Paytm's claim that a technical glitch had prevented the refund from being processed, saying such issues do not absolve a service provider of its responsibility towards consumers.

What compensation has Paytm been asked to pay?

Holding that the complainant had been unnecessarily harassed and forced into litigation, the commission directed Paytm to make multiple payments.

It ordered the company to:

What happened to the complaint against Go Airlines?

The consumer commission dismissed the complaint against Go Airlines after finding that the airline had fulfilled its obligation by transferring the refund amount to Paytm.

The order makes it clear that once the intermediary receives the refund from the airline, it cannot avoid responsibility if the money fails to reach the customer.

Consumer commissions across India have repeatedly held that online booking platforms and payment intermediaries can be held accountable if they fail to deliver refunds after receiving money from airlines or other service providers. The ruling reinforces the principle that consumers should not suffer because of technical glitches or internal processes between companies.

According to the commission, the complainant was "unnecessarily harassed" and had to initiate legal proceedings to recover money that should have been refunded years ago, making the compensation and litigation costs justified. The case also serves as a reminder for digital platforms to ensure that refunds are completed promptly instead of leaving customers to chase their own money. (With inputs from TOI)