The judgement was made by the District Consumer Disputes Redressal Commission in India's Hyderabad late last month, saying the carrier must be responsible for "mental agony and physical suffering" caused to the couple during their flight, India Today reported.
Ravi Gupta and his wife reportedly paid 66,750 rupees each for their business-class seats on the flight from Hyderabad to Singapore on May 23.
However, the seats' automatic recline feature wasn't working, leaving them awake during the entire flight.
According to Singapore Airlines' website, the seats in business class can recline automatically via electronic buttons.
The couple claimed they were treated as"economy-class passengers" despite having to pay for business-class tickets, reported the Deccan Chronicle.
Singapore Airlines initially offered them 10,000 frequent-flyer miles each, but they declined its offer, The Straits Times reported.
The airline then accepted the decision from the Indian authority and apologized to the couple for the inconvenience caused.
Singapore Airlines is one of the world's few five-star airlines, according to the Skytrax ranking. It was named the world's second-best business class airline last year after Qatar Airways.