Why a Mumbai court slapped ₹1.5 crore costs on Airports Authority of India

The Bombay City Civil Court recently imposed costs of ₹1 crore and ₹50 lakh as litigation expense on the Airports Authority of India (AAI) for unnecessarily involving Irish lessor company Aer Lingus in a lengthy legal battle concerning parking and landing fees related to East-West Airlines, the lessee. [AAI v Air Lingus].The costs must be paid to Aer Lingus along with an interest at the rate of 9% per annum.Additional Sessions Judge A S Kazi passed the order on January 3.“Now, the third claim made by defendant Nos. 1, 4, and 5 is towards exemplary costs of ₹1 Crore. As already discussed above, from the very own admissions given by PW-1 in para No.4 of his cross-examination it is apparent that, how without any cause, the present 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. I accordingly answer issue No.7 in the affirmative.”The suit originated in 1997 with AAI seeking to recover outstanding charges related to two aircraft—VT-EWH and VT-EWI—leased from Aer Lingus. The defendants included Aer Lingus as the lessor, East-West Travel & Trade Links Ltd., East West Airlines, the company's liquidator and two aircraft registered under Indian law. .AAI claimed over ₹2 crore in unpaid landing and parking fees for East-West Airlines’ operations at Mumbai Airport between January 1995 and March 1996.Throughout the litigation, AAI argued that it was entitled to recover these dues for services rendered at the airport jointly from all the defendants, while Aer Lingus contended that it should not be held liable, as it was the lessor and had no operational involvement in India.Aer Lingus maintained that the responsibility lay solely with East-West Airlines, the operator under a lease agreement signed in 1992.Judge Kazi noted that despite multiple rulings by the High Court clarifying that Aer Lingus was not liable for the charges, AAI continued to involve the lessor in the lawsuit.The Court found that AAI had acted without cause, dragging the defendants into the dispute for over 27 years. Judge Kazi ruled that the defendants including Aer Lingus were unnecessarily burdened by the case and in the interests of justice, awarded exemplary costs to the defendants.The Court also directed AAI to refund a ₹96.25 lakh bank guarantee that Aer Lingus had provided during earlier litigation.However, the Court decreed the suit partly in favour of the AAI. It ruled that East-West Travel & Trade Links Ltd. and its official liquidator and East West Airlines are jointly and severally liable to pay ₹2.71 crore to AAI.This amount, which includes the unpaid charges, must be paid within three months from the date of the decree, along with interest at the rate of 9% per annum from the date it became due until the full amount is realized..Advocate Santosh Singh along with advocate Shanti Parab appeared for the Airports Authority of India.Advocate Vinay Taliwal appeared for East-West Travel & Trade Links Ltd. and its official liquidator.Advocate Archana Deshmukh along with advocates Krishan Singhania and Anjana Devi instructed by Singhania and Co. appeared for Aer Lingus and two aircrafts..[Read Judgment]