The City Civil Court recently criticised the Airport Authority of India (AAI) and directed it to pay Rs 1 crore to Aer Lingus Ltd, an Irish company, as exemplary costs, along with Rs 50 lakh towards litigation expenses. The court's decision comes after the company was embroiled in a legal battle for over 27 years due to AAI's attempts to recover dues from the now-defunct East West Airlines. The Irish company was dragged into the legal battle as the defunct airlines had taken the company's aircraft on lease.

The court has also asked the AAI to pay Rs96.25 lakh which the Irish firm had to spend towards bank guarantee for release of its two aircraft, along with other bank charges which the firm had to pay with 9% interest, for unnecessarily dragging the firm into litigation.

The court further noted that an AAI official in his cross examination admitted when the suit was filed the airlines was already into liquidation and they knew that they would not be able to recover dues from the airlines, hence the Irish firm and the aircraft were added as parties to the suit.

It was claimed that the AAI had to recover Rs2.71 crore from the East West Travel and Trade Links Ltd (defendant No.2) which was responsible for operations of East West Airlines in respect of two leased aircraft VT GWH and VT GHI.

In the suit filed in 1996, the AAI claimed that it is entitled to detain the two aircraft till its dues are not cleared. Hence Aer Lingus was added to the case claiming that all the defendants are jointly liable to pay the dues. The AAI detained the aircraft till the firm gave equivalent bank guarantee towards its release.

The court, while dismissing the suit, has asked the AAI to recover the dues from the airlines. The court said, “The plaintiff (AAI) acted in breach of rules and to the detriment to the public and the present defendants. The Plaintiff allowed the defendant No 2 to operate the airlines in spite of continuous defaults on the part of the defendant No 2 for 1 and half years.”

Further the court noted that the officials of the plaintiff took only Rs1.75 lakh as security deposit from defendant No 2 and allowed them to operate their airlines, as against Rs17.58 crore. “This huge anomaly in the said amount gives rise to the inference that there was collusion between the officials of the plaintiff and the defendant No 2,” the court noted.