Airline paid AAI in dollars, not rupees: Delhi HC revives Rs 68 lakh refund suit killed over registry defects

Justice Neena Bansal Krishna set aside a district judge finding that the LTU Lufttransport suit, presented two days before limitation expired, was non est because of vakalatnama, court-fee and duplicate-set objections, held that curable registry defects relate back to the original presentation, and decreed Rs 68,24,653.71 with 6 per cent interest from July 2007 against Airports Authority of India.

A German airline that paid an Airports Authority of India overflying bill of 4,35,540 in US dollars instead of rupees, and then spent sixteen years chasing the balance of its refund, has finally won a decree. The Delhi High Court on 30 October 2026 decreed its suit for Rs 68,24,653.71 with 6 per cent interest from July 2007.

Justice Neena Bansal Krishna set aside a district judge's finding that the suit was time-barred because registry objections over the vakalatnama, court fee and duplicate set meant it was not duly instituted until eight days after limitation expired. Curable procedural defects, she held, relate back to the date of the original presentation.

The judge also dismissed AAI's cross-objections. She upheld the trial court's findings that the airline had proved its claim and that AAI had not proved the Western Region dues against which it said the money was adjusted.

A bill with no currency, paid in dollars

LTU Lufttransport Unternehmen GmbH, part of the Air Berlin group, flew scheduled and charter services on medium and long-haul routes. Each time its aircraft crossed Indian airspace, AAI raised route navigation facility charges under Section 22(1)(b) of the Airports Authority of India Act, 1994, and the airline paid.

On 22 February 2006 AAI raised an overfly bill for 4,35,540 without specifying the currency. On 4 April 2006 the airline remitted USD 4,35,540 by bank transfer. The bill was for rupees.

The airline asked for a refund on 12 June 2007. By e-mail of 5 July 2007, AAI said that after adjusting outstanding amounts and credits, Rs 1,46,33,653.71 stood to the airline's credit. AAI then paid Rs 78,09,000, which the airline says it received on 8 October 2007 and AAI says it remitted on 21 September 2007.

That left Rs 68,24,653.71. The airline wrote on 21 August 2009 asking for it, followed by nine reminders between October 2009 and July 2010. An AAI official replied on 22 October 2009 that the request had gone to the DGM (Finance), Northern Region. Nothing came.

After a demand notice of 30 September 2010 to AAI and the Ministry of Civil Aviation, the airline filed a summary suit under Order XXXVII CPC for Rs 94,94,682.61, being the principal plus Rs 26,70,028.90 in pre-suit interest at 12 per cent. The Ministry was later deleted from the array of parties.

AAI: the balance went to Western Region dues

AAI got leave to defend on 24 September 2013, the court observing that the rival computations needed evidence and the suit could not be decreed on the strength of one regional office's e-mail. Its written statement then raised two preliminary objections and a merits defence.

First, the plaint was signed by Shivam Vikram Singh under a power of attorney of 6 October 2010 that did not say who had executed it or in what capacity, and no board resolution was filed. Second, the cause of action arose on 5 July 2007 or at the latest on the refund date, so the suit was late.

On merits, AAI explained that Indian airspace was divided into five regions for billing. The 5 July 2007 e-mail came from the Northern Region. Outstanding dues of Rs 68,24,653 were later found in the Western Region's books and adjusted against the excess, after which nothing was refundable.

AAI's computation ran like this: the dollar payment equalled Rs 1,96,55,110, with a further credit of Rs 1,74,713. It adjusted Rs 37,73,953.29 and Rs 14,22,216 for Northern Region dues, then Rs 68,24,653.71 for Western Region dues, leaving the Rs 78,09,000 it refunded.

It went further. Bills carried interest at 1.5 per cent a month beyond 15 days, and as on 21 September 2007 interest of Rs 23.84 lakh (Northern), Rs 1.17 crore (Western) and Rs 45.94 lakh (Southern) was outstanding, plus Rs 25.49 lakh principal for the Southern Region.

In all, AAI said, Rs 2,12,44,102.60 was recoverable from the airline. It filed no counterclaim.

The airline accepted the Northern Region adjustments but denied the rest. Of the 21 Western Region invoices totalling Rs 68,24,653, it produced proof of payment for 18 worth Rs 61,44,545 and said the remaining three had never been delivered. AAI's ledger extract, it pointed out, differed from the Annexure D-3 later filed with the leave-to-defend application.

Trial court: claim proved, suit registered too late

Five issues were framed on 11 August 2014. The airline examined Friedrich Floto, Senior Vice President (Finance) at Air Berlin, and its attorney Shivam Vikram Singh. AAI examined Vijay Kumar, Joint GM (Finance).

The merger of LTU into Air Berlin PLC and Co. Luftverkehrs KG was brought on record in 2015, and the suit was transferred to the district court as CS No. 9195/2016.

In cross-examination, Vijay Kumar admitted that the Western and Southern Region figures differed between the written statement and his affidavit, that his charts showed no principal amount due, that no document showed how they were prepared, that no agreement provided for interest on route navigation charges, and that the statements did not show when payments were actually received.

The trial court held the plaint validly signed, found the 5 July 2007 admission neither denied nor explained, and found no basis for the adjustments or for unilateral interest. It held the airline had proved its entitlement to Rs 68,24,653.71.

But it dismissed the suit on limitation. Three years ran from the part payment of 8 October 2007 and expired on 8 October 2010. The plaint was presented on 6 October 2010 and returned the same day over the vakalatnama, duplicate set and caveat. Re-filed on 8 October, it drew six objections, removed only on 16 October 2010.

Relying on three Delhi High Court decisions rendered in arbitration proceedings, the district judge treated those defects as fundamental, the initial presentation as non est and 16 October 2010 as the date of institution. The judgment of 20 December 2021 dismissed the suit with no order as to costs.

Appeal and cross-objections

The airline's regular first appeal under Section 96 read with Order XLI CPC argued that a suit is instituted on presentation of the plaint under Section 26 and Order IV Rule 1 CPC, and that curable defects relate back. The High Court was closed from 9 October 2010, so the defects were removed on the first day it reopened.

It relied on Vidyawati Gupta v. Bhakti Hari Nayak, Alka Kasana v. Indian Institute of Technology and D.C. Sankhla v. Ashok Kumar Parmar, and in written submissions on the Full Bench ruling in Pragati Construction Consultants v. Union of India, 2025:DHC:717-FB. It also said AAI had never pleaded that the presentation was non est.

AAI's cross-objections under Order XLI Rule 22 attacked the findings on authority and on the merits. It said the airline had admitted receiving 18 of the 21 Western Region bills, so the burden of proving payment lay on the airline, which had never exhibited its payment documents at trial.

AAI also argued that LTU had merged into Air Berlin in 2001 and did not exist when the suit was filed, that the 2018 resolution of Air Berlin's insolvency administrator authorised only Floto and not Singh, and that the airline's e-mails lacked a certificate under Section 65B of the Evidence Act.

Vaibhav Kalra appeared for AAI. No appearance was recorded for the appellant in the judgment.

Who signed the plaint

Justice Bansal Krishna took the authority objection first. Singh had affirmed in his affidavit and in cross-examination on 28 November 2018 that he signed the plaint and replication under the 6 October 2010 power of attorney. Nothing in cross-examination discredited it, and AAI led no rebuttal evidence.

Under United Bank of India v. Naresh Kumar, (1996) 6 SCC 660, a company may authorise a person to sign pleadings by power of attorney without a board resolution, and may ratify the signing expressly or impliedly. Floto had deposed that the power of attorney was executed before a notary by Helmut Weixler, LTU's managing director.

The merger plea was contrary to the record. The commercial register showed LTU took over another company in 2001 and continued to exist; its own merger into Air Berlin took place only in 2011, as AAI's witness admitted.

A fresh power of attorney of 23 September 2014 followed the merger, and a separate power of attorney of 9 August 2018 from the insolvency administrator covered Singh. Consistent pursuit of the suit by the original plaintiff, its successor and the administrator would in any event amount to ratification. The finding on issue 1 stood.

No principal shown due, only unproved interest

The judge accepted that the 5 July 2007 e-mail, issued by Data Ram for the General Manager (F&A) of the Northern Region, pertained only to that region and did not stop AAI from proving Western Region dues. The question was whether AAI had proved them.

It had not. AAI relied on a ledger extract recording that on 21 September 2007 the Western Region applied a credit of Rs 68,24,653 received from the Northern Region against 21 bills dated between 5 February 1996 and 30 March 2003. The airline had listed payment dates for 18 of those bills and marked the other three as never provided.

Vijay Kumar, AAI's only witness, had no personal knowledge of the airline's accounts and could not explain the entries. He admitted that the charts showed no principal due, that no ledger or bank statement showing receipts was filed, and that no interest could have been charged after 4 April 2006.

He could not say what steps AAI had taken to recover amounts allegedly due since 1995. He also admitted that without the dollar payment AAI would have had nothing to adjust. In substance, the judge found, AAI's claim was confined to interest on delayed payments since 1996, for which no agreement existed and no notice had been sent.

Since AAI asserted the adjustment, the burden of proving a subsisting Western Region debt was on AAI. Acknowledging receipt of 18 bills was not an admission that anything remained due; the airline had consistently said they were paid.

As for the ledgers and statements AAI relied on, “none of them has been proved in accordance with the rules of evidence” (para 116). No certificate was annexed to any of them.

The trial court's finding that the airline had proved its entitlement to Rs 68,24,653.71 was upheld. On interest, no agreement existed, but AAI had acknowledged the excess on 5 July 2007 and its retention was unjustified. The judge fixed simple interest at 6 per cent a year from that date until realisation, covering the pre-suit, pendente lite and future periods.

Section 19 restarts the clock from part payment

Turning to what she called the most significant question, the judge held that limitation ran from the part payment of 8 October 2007 under Section 19 of the Limitation Act, 1963, which gives a fresh period from a payment on account of a debt. Three years therefore expired on 8 October 2010.

AAI's written statement had not disputed that the suit was filed on 6 October 2010; its limitation plea was pegged to 5 July 2007 as the cause of action. The non est argument surfaced only in final arguments.

But Section 3 of the Limitation Act requires a court to dismiss a time-barred suit even if limitation is not pleaded, so the point had to be examined on its merits. If the defects were curable, she said, the suit would be taken as instituted on the date of its original presentation. The short question was:

“whether the defects in the Plaint presented on 06.10.2010, were so fundamental that the presentation of plaint must be treated as non-est, or whether they were curable procedural defects” (para 126)

Registry objections are curable and relate back

Section 26(1) CPC says a suit is instituted by presenting a plaint. Order IV Rule 1 requires the plaint to comply with Orders VI and VII and says it is not duly instituted otherwise.

What those orders require, the judge said, is the parties' names and addresses, the facts constituting the cause of action, the facts showing jurisdiction, the relief claimed and the valuation for jurisdiction and court fee.

None of the six registry objections touched those essentials. They concerned the suit format and original documents, the duplicate set, the jurisdictional value and court fee, the caveat report, presentation for scrutiny and the vakalatnama. These were procedural requirements meant to speed disposal, not conditions of a valid plaint.

The judge drew on Vidyawati Gupta, (2006) 2 SCC 777, where the Supreme Court held the requirements of Section 26, Order IV and Order VI to be procedural and directory, with non-compliance a curable irregularity that dates back to presentation. Alka Kasana and D.C. Sankhla had applied the same rule in Delhi.

She then took the two defects the district judge had treated as fatal. A vakalatnama concerns counsel's authority to appear, not whether the party has presented its claim; Uday Shankar Triyar v. Ram Kalewar Prasad Singh, (2006) 1 SCC 75, holds its omission curable. The plaint itself was signed and verified by the airline's attorney.

Deficient court fee is governed by Section 149 CPC, which lets the court allow payment at any stage, after which the document has the same force as if the fee had been paid at the outset. A deficiency the law itself permits to be made good at any stage cannot make the original presentation non est.

In Mannan Lal v. Mst. Chhotaka Bibi, (1970) 1 SCC 769, a memorandum of appeal was treated as validly presented on its original date once the deficiency was made good under Section 149.

The Full Bench in Pragati Construction Consultants had held, under Section 34 of the Arbitration Act, that a defective vakalatnama, missing signature or verification, or deficient court fee do not individually make a filing non est. Only where the defects cumulatively show a filing made merely to stop limitation may a court say so.

The inquiry, the judge said, is into the character of the filing and the intention behind it, not a count of the registry's objections. The three arbitration decisions the district judge relied on themselves distinguished fundamental defects from formal ones.

The non est concept, she added, had evolved in commercial litigation, mostly under Sections 34 and 37 of the Arbitration Act. It could not be imported into an ordinary money suit filed in 2010, before the Commercial Courts Act, 2015 brought in its stringent procedure.

Vacation explains the eight days

Nothing suggested the plaint of 6 October 2010 lacked the cause of action, parties or relief, or that the plaint registered on 16 October differed from it in substance. No amendment was made on re-filing. The plaint was re-filed within two days of its return, still within limitation.

Section 4 of the Limitation Act, which allows filing on the reopening day when limitation expires during a closure, did not apply directly because limitation expired on 8 October, before the closure. But the vacation was relevant to explaining the time taken to remove objections, which was neither inordinate nor unexplained.

The district judge's remark that the airline, knowing limitation ended on 8 October, did not file a proper plaint was unsustainable; a party may sue on any day within limitation. Taken individually or cumulatively, the objections were curable procedural defects. The judge held:

“Their removal did not amount to the institution of a fresh Suit on 16.10.2010” (para 161)

The suit was instituted on 6 October 2010, within limitation, and the bar in Section 3 was not attracted. The finding on issue 2 was set aside.

Order

The appeal, RFA 277/2022, was allowed. The judgment and decree of 20 December 2021 was set aside insofar as it dismissed the suit as time-barred, and the suit was decreed against AAI for Rs 68,24,653.71 with simple interest at 6 per cent a year from 5 July 2007 until realisation.

The findings that the suit was instituted by duly authorised persons and that the airline had proved its claim were upheld. AAI's cross-objections, CM APPL. 46845/2022, were dismissed and pending applications disposed of. The judgment was reserved on 20 July 2026 and pronounced on 30 October 2026.