Source: As worded by Indian Railways, Government of India
Yes, passengers traveling by air conditioned class can claim refund if the AC fails enroute. You can get a refund of difference of fare for the distance the AC was not functioning.
This refund should be claimed immediately at the end of the journey or within 20 hours of the arrival of the train at the destination, on production of the ticket and certificate issued by the Traveling Ticket Examiner.
