Boarding Denied But Not Getting Refund

I had booked 3 tickets (2 adults and one 5 years old girl child) through an agency eDreams.com from Delhi to Toronto via Munich and Frankfurt in the Airline Lufthansa. I paid Canadian CAD 5888.66 (3.5 lacs). My final destination was Toronto and we are having Canadian PR. We were denied boarding at Delhi airport by Lufthansa saying that I can not fly from Munich to Frankfurt as flight will be domestic from there and so I can not board the flight for final destination, however they clearly told if you had one stop in Germany then we would have allowed to board. That means it's clearly not a visa issue and it's a wrong flight issue. They need to clearly show info on the website or if it's through an agency then they need to make sure the agency is showing the info. This is clearly hiding the information. They should clearly mention that from Munich to Frankfurt, it will be domestic and you need a transit visa as you have to cross the border. We have been going through immense pain.