National Consumer Disputes Redressal Commission (NCDRC) bench, presided by Justice J M Malik, directed the airline to pay the money to Delhi resident Geetika Sachdeva, who was made to buy fresh tickets after borrowing money, noting that she was made to "pay through the nose".
"Air India cannot afford to harass and cause anger, anguish, frustration, sadness to its customers like this," it said.
The apex commission passed the order while dismissing Air India's appeal against the order of state commission, with a cost of Rs 25,000 saying the "incident highlights arrogance, highhandedness and despotic attitude of the opposite party (Air India)".
It added that it was "difficult to fathom, why should a helpless lady/consumer take a dallop of injustice when someone else is more powerful".
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"Instead of admitting that they have committed a mistake, the opposite party (OP) has wasted the precious time of the parties and fora for more than a decade in pursuing this hopeless case. The case of the complainant stands proved," it said, noting that Sachdeva was "dragged into litigation for about one-and-a-half decade."
The apex commission also denied Air India's contention that Sachdeva suffered because of the deeds of Air Canada, saying "there is always an arrangement between Air India and Air Canada for such like flights" and "if any omission or commission was committed by Canada Airlines, Air India could claim compensation from Air Canada".
On November 2, 2001, she informed Air India that she would travel from London to Delhi on December 7, 2001 and in turn she was told that her ticket was confirmed for that day.
Later while returning, she was denied boarding at London for Delhi on the pretext of expiry of her ticket's validity, she said, adding that she was forced to borrow money from another passenger for buying another ticket for Delhi.
The airline, however, had denied deficiency on its part.