In a significant ruling, the Bombay City Civil Court has imposed exemplary costs of ₹1 crore and ₹50 lakh as litigation expenses on the Airports Authority of India (AAI) for frivolously involving Aer Lingus, an Irish aircraft lessor, in a protracted 27-year legal dispute over parking and landing fees. The costs are to be paid to Aer Lingus along with 9% annual interest.
The order, passed by Additional Sessions Judge A.S. Kazi on January 3, noted that AAI had acted without cause, despite multiple High Court rulings affirming that Aer Lingus was not liable for the unpaid charges. The dispute originated in 1997 when AAI sought to recover ₹2.71 crore in unpaid dues related to two aircraft—VT-EWH and VT-EWI—leased from Aer Lingus and operated by East-West Airlines.
Judge Kazi highlighted AAI’s unwarranted actions, stating, “From the very own admissions given by PW-1 in para No.4 of his cross-examination, it is apparent how, without any cause, defendant Nos.1, 4, and 5 were frivolously, vexatiously, and maliciously dragged into the suit stretching to over 27 years. Hence, in my opinion, this is a fit case to award exemplary costs of ₹1 crore to the defendant Nos.1, 4, and 5 in the interests of justice.”
Key Developments in the Case
- AAI’s Claims: The dispute stemmed from over ₹2 crore in unpaid landing and parking fees for East-West Airlines’ operations at Mumbai Airport between January 1995 and March 1996.
- Aer Lingus’ Defense: Aer Lingus argued that as the lessor, it had no operational involvement in India and that the responsibility for the charges lay solely with East-West Airlines, the operator under a 1992 lease agreement.
- Court’s Findings: The court found AAI’s continued involvement of Aer Lingus in the litigation baseless and ordered the refund of a ₹96.25 lakh bank guarantee provided by the lessor during earlier proceedings.
Mixed Outcome for AAI
While the court ruled in favor of Aer Lingus on the issue of liability, it partially decreed the suit in favor of AAI. The court held East-West Travel & Trade Links Ltd., East West Airlines, and its official liquidator jointly and severally liable for the ₹2.71 crore dues, which are to be paid with 9% interest within three months.
Case: AAI vs Aer Lingus – Available on LAWFYI.IO
