A long-simmering legal storm over unpaid airport charges took a sharp turn when the Bombay High Court hit pause on a hefty ₹1.5 crore penalty imposed on the Airports Authority of India (AAI) by a trial court. The fine stemmed from AAI’s decision to haul Irish aircraft lessor Aer Lingus into a commercial suit that began back in 1997—a move the lower court had branded both malicious and vexatious.
But the High Court wasn’t ready to rubber-stamp that conclusion.
A Division Bench led by Chief Justice Alok Aradhe and Justice MS Karnik granted interim relief to AAI, questioning whether the punishment truly fit the procedural misstep. “Merely because a party is named in a suit doesn’t warrant exemplary costs,” the bench remarked, casting doubt on the lower court’s ₹1 crore in punitive damages and ₹50 lakh in litigation expenses ordered against AAI.
This decades-old saga traces back to AAI’s attempt to recover ₹2.71 crore in dues from East West Airlines for services rendered between 1995 and 1996. The twist? The planes—VT-EWH and VT-EWI—were leased from Aer Lingus, which AAI had dragged into the fray along with the now-defunct airline, its liquidator, and others.
Aer Lingus, however, stood firm. The company insisted it had no operational ties in India and had merely leased the aircraft to East West Airlines under a five-year deal. Once payments stopped and insurance lapsed, the lease was terminated. There was no contract, no duty, no dues—at least as far as Aer Lingus saw it.
The trial court had sided with the lessor, lambasting AAI for pursuing what it called a knowingly futile lawsuit—particularly given that AAI had already been told in earlier proceedings that Aer Lingus bore no liability. It even cited a scathing Comptroller and Auditor General (CAG) report that revealed AAI had let East West operate on a shoestring security deposit—₹1.75 lakh instead of the required ₹17.5 crore.
But the High Court wasn’t entirely convinced. It said AAI might have named Aer Lingus simply to protect its position, given that the lessor still owned the aircraft. As for the ₹50 lakh litigation bill? The court noted there was “hardly any material” to justify the figure.
Still, it didn’t let AAI off the hook entirely.
The High Court refused to interfere with one portion of the lower court’s order: the cancellation of a bank guarantee Aer Lingus had furnished in 1996. That, the judges said, should proceed. However, another order—directing AAI to refund ₹96.25 lakh in bank guarantee charges—was stayed, on the condition that the sum be deposited in court within eight weeks.
Once the funds are in, Aer Lingus will be free to apply for withdrawal.
The larger question—whether AAI overstepped in chasing Aer Lingus—now hangs in the balance as the appeal moves forward. But for now, the ₹1.5 crore burden has been lifted, if only temporarily, as the court decides whether this was a case of caution or calculated blame-shifting.
