Bombay High Court Stays 'Unjustified' Cost Of ₹1.5 Crore Imposed On Airports Authority of India Based On Mere Claim

The Bombay High Court has stayed the exemplary cost of ₹1.5 crore imposed on Airports Authority of India by the City Civil Court, calling it 'unjustified'.

The Court was considering an Interim Application seeking stay on the interim order and judgement as the Appeal against the same is pending.

The Division Bench of Chief Justice Alok Aradhe and Justice MS Karnik observed, "So far as Clause 4 of the impugned judgment and decree dated 03.01.2025 is concerned, having given our anxious consideration to the observations of the Trial Court in para 48, prima facie, in our opinion, imposing exemplary costs and litigation costs on the appellant appears to be unjustified. It is not disputed that respondent No.1 had leased out its aircrafts to respondent Nos.2 and 3. Respondent Nos.2 and 3 defaulted in payment of the relevant charges for which the suit for recovery was filed. It may be the officials of the AAI have been over cautious in protecting the interest of the AAI and hence impleaded defendant No.1 which is admittedly the owner of the aircrafts. In such circumstances, merely because defendant No.1 is made a party to the suit and a claim is made against them is not sufficient to impose exemplary costs."

The Applicant was represented by Advocate Aseem Naphade, while the Respondent was represented by Advocate Archana Deshmukh.

Facts of the Case

The Trial Court, in the impugned order, had held that there is no privity of contract between the Plaintiff and Defendant No.1. (Aer Lingus). It was held that the Plaintiff failed to show that it is entitled to claim charges for services and facilities rendered and lending charges from Defendant No.1. It was held by the Trial Court that whatever charges are to be recovered for the use of the airport by aircrafts, needs to be recovered from Defendant No.2 and 3, if any, being in its possession as lessee at the relevant time. It was of the opinion that the Plaintiff-AAI is not entitled the claim charges for services and facilities rendered and lending charges from Defendant No.1 as it had leased its aircrafts to Defendant Nos. 2 and 3. The Trial Court, thus, held that it was Defendant Nos. 2 and 3 who were alone liable in respect of charges to the Plaintiff. As regards the issue whether the plaintiff colluded with Defendant Nos. 2 and 3 to claim the dues from Defendant No.1, the Trial Court answered the issue in the affirmative. The Trial Court was of the opinion that the plaintiff-AAI purported to exercise its right to recover dues as a result of such collusion from the Defendant No.1.

Reasoning Of Court

The Court stayed the impugned judgment and decree after due analysis.

"So far as Clause 3 of the operative portion of the impugned judgment and decree dated 03.01.2025 is concerned, we are inclined to stay the impugned judgment and decree subject to the appellant-AAI depositing the amounts directed to be ordered in terms of Clause 3 in this Court within the period of eight weeks from today. It is open for the respondent No.1 to apply for withdrawal of the said amount after the same is deposited," the Court said.

It was of the view that merely because Defendant No.1 is made a party to the suit and a claim is made against them is not sufficient to impose exemplary costs.

"The finding of collusion between officials of AAI and Respondent Nos.2 and 3, prima facie, is misconceived. There is also no basis for allowing the claim of Rs.50 Lakhs which defendant No.1 made towards litigation expenses and costs. There are hardly any materials to arrive at this figure. In such circumstances, though we are conscious that a money decree should not ordinarily be stayed unless the decreetal amount is deposited, in the facts and circumstances of the present case, we are inclined to stay the operation and effect of Clause 4 of the judgment and decree dated 03.01.2025," the Court observed.

The Application was accordingly disposed of.

Cause Title: Airport Authority of India vs. Aer Lingus Ltd. & Ors. (2025:BHC-AS:19509-DB)

Appearances:

Appellant- Advocate Aseem Naphade, Advocate Radha H. Bhandari, Advocate S. D. Shetty, Advocate

Respondent- Advocate Archana Deshmukh, Advocate Krishan Singhania, Advocate Srishti Singhania, Advocate Anjana Devi, Advocate Aayush Shah

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