AAI Must Pay Airline ₹68.24 Lakh With 6% Interest After Delhi HC Finds Curable Filing Defects Didn’t Make Suit Late

The Appellant mistakenly remitted USD 4,35,540 against an AAI bill for ₹4,35,540. AAI later acknowledged a credit of ₹1,46,33,653.71, refunded ₹78,09,000, and retained the balance of ₹68,24,653.71, claiming it had been adjusted against Western Region dues.

The Appellant sued for the retained balance, with interest. The Trial Court found the claim established on the merits but dismissed the suit as time-barred, treating the suit as instituted only when filing defects were cured and it was registered on 16 October 2010.

The Appellant appealed; AAI filed cross-objections challenging findings on authority and entitlement to recovery.

Section 19 of the Limitation Act, 1963 provides for a fresh limitation period from a qualifying part-payment made before expiry of limitation; Section 3 requires dismissal of a suit filed out of time.

Under Sections 26(1) and Order IV Rule 1 CPC, a suit is instituted by presentation of a plaint, while Order IV Rule 1(3) requires compliance with the applicable pleading requirements; curable procedural defects do not necessarily make the original filing non est.

Section 149 CPC expressly permits deficient court fee to be made good, with the document then having the same force and effect as if the fee had been paid initially.

Vidyawati Gupta v. Bhakti Hari Nayak, (2006) 2 SCC 777, and Uday Shankar Triyar v. Ram Kalewar Prasad Singh, (2006) 1 SCC 75, support treating procedural defects in pleadings or vakalatnamas as curable; Mannan Lal v. Mst. Chhotaka Bibi, (1970) 1 SCC 769, applies the retrospective effect of curing a court-fee deficiency.

The Full Bench decision in Pragati Construction Consultants v. Union of India, 2025:DHC:717-FB, states that procedural defects must be assessed cumulatively and that a filing should be treated as non est only where the circumstances indicate it was not genuinely intended for adjudication.

United Bank of India v. Naresh Kumar, (1996) 6 SCC 660, recognises that a company may authorise a representative to sign pleadings and may ratify the act expressly or impliedly.

AAI, as the party asserting adjustment, had to prove the outstanding dues supporting it; interest could not be imposed unilaterally without an agreement.

The limitation period ran from the part-payment on 8 October 2007 and expired on 8 October 2010.

The plaint had been presented on 6 October 2010; the objections concerned matters such as the vakalatnama, court fee, duplicate set, caveat report and supporting documents, and did not alter the plaint’s substance or show an intention merely to arrest limitation. The Court therefore treated them as curable and the suit as instituted on the original presentation date.

The authority challenge failed because the powers of attorney and subsequent authorisations were proved, and the record established that the Plaintiff remained in existence when the suit was filed.

On adjustment, AAI’s witness could not establish any outstanding principal, the account statements were inadequately proved, and AAI produced no reliable record of payments or basis for the alleged dues. The Appellant’s admission that it received bills was not an admission that they remained unpaid. AAI therefore failed to prove its defence of adjustment.

The Court awarded 6% simple interest, finding no agreement supporting the higher rate claimed.

The appeal was allowed, the Trial Court’s dismissal on limitation was set aside, the suit was decreed for the principal sum with interest, and AAI’s cross-objections were dismissed.